What About New Scanners?
FedEx Ground has been trialing new Star V scanners at a few select terminals around the country for nearly a year (my terminal was one of them). Now with the trials officially over, FedEx started offering contractors the ability to purchase the new scanners starting on July 29th, 2019 for certain terminals.
The purpose of the roll out is two-fold. First, this is an opportunity for FedEx to replace its existing scanners with a more Smartphone like scanner in terms of size, operating system and functionality. Lets face it, the old ones were slow, clunky and way past their prime. The second, and more significant change, is FedEx is stepping away from the scanner business altogether. FedEx, on a go-forward basis, will have 3-party vendors offer the devices to purchase or lease. This means FedEx will no longer bill you directly for scanners that you lease through FedEx. Instead, you will be billed through the 3rd party provider.
Big picture, this is just one more step where FedEx is reducing its direct service contact with ISPs.
Where Can I Get Them?
Initially, ISPs will be able to purchase or lease new scanners from two different service providers:
Peak-Ryzek (https://myfxground.peak-ryzex.com/)
Vector Solutions (https://shop-fxg.velsol.com/)
What Are the Options?
At the moment, both Peak and Vector provide the same couple of options. The two scanners currently offered are:
Panasonic FZ-N1
Zebra TC77
The two major differences between the two scanners are 1) brand name vs. non brand name and 2) where the scanner function is located on the device. Both scanners have been put through the paces by FedEx. As such, both will perform to minimum FedEx requirements. For what it is worth, we have trialed the Panasonic scanners for a year and have had no major issues.
Lease Vs. Buy
Leasing will always be more expensive over the long-term vs. purchasing. However, one needs to understand opportunity costs. Using Vector’s pricing as an example, it will cost $1,059 to purchase the Panasonic “Driver” package. A 3 year lease it will run you $33.85/month. $33.85 x 36 months = $1,219. A 15% premium to the initial purchase price. On the surface, yes, you should just purchase the scanners because you will save 15% over the next 3 years (5% per annum). However, instead of paying all the money upfront to purchase a scanner, could you instead invest that capital elsewhere and make a return greater than 5% per annum? The short answer is a resounding yes! Save your money and deploy your capital by expanding your routes! The return your generate on purchasing a new route will blow away the measly 5% hurdle rate you need to generate to break even on your lease option.
If you have additional questions regarding scanners, buying FedEx routes or selling FedEx routes, or how to maximize your investment in FedEx contact us now!