A start-up US company, EquaShip, aims to take on UPS, FedEx and USPS by becoming the ‘4th USparcel carrier’ and win business from SMEs with discount prices.
Announcing its launch in summer 2011, EquaShip said it would undercut UPS and FedEx rates by upto 30%, thus “equalising” for low-volume small customers the discounts that it claimed the two USmarket leaders give to major shippers. Small businesses, it claimed, “often pay 2-4 times more thanbig shippers, get inferior customer service and must have all their parcels ready to go severalhours earlier than larger shippers do”.
The Seattle-based company said it would offer a nationwide drop-off network with latercollection times along with “superior service and better delivery performance” and without anyfees, contracts or volume commitments.
EquaShip said it will use ‘reliable carriers’ currently used by large shippers such as Amazonand “which have fundamentally lower costs than UPS or FedEx while providing superior deliveryperformance, especially in the fast-growing segment of B2C e-commerce shipments”. The company willconsolidate the parcel volumes of a large number of SMEs in order to secure capacity with theseregional and local parcel carriers and offer them “profitable incremental volume from customersthey otherwise would have no way of reaching”.
The company said it is also building an extensive nationwide network of drop-off locations withmajor-brand retail chains that would benefit from the additional store visitors generated throughits parcel service.
The EquaShip service will be available for shippers to use via its website www.EquaShip.com as well as inside popular electronicstorefront software and order management platforms used by e-tailers, including millions of smalle-Bay and Amazon stores. The company will handle all frontline customer service, payment processingand “first mile aggregation” of parcels.
The company is headed by CEO Ron Wiener, a well-known parcel industry entrepreneur whoseprevious ventures included Earth Class Mail and PrintBid.com. Chief Marketing Officer is JoshLeichtung, an experienced e-commerce and catalogue-selling industry manager, while the deliverynetwork will be managed by Doug Caldwell, a former USPS manager.
Wiener said: “25 years ago no shipper ever got a discount from FedEx or UPS. Those days aregone. Since then these behemoths have been in a race to the bottom giving away discounts of 75% ormore to win accounts like Amazon, while consistently raising prices for small shippers by 7% peryear to compensate. It is forcing many small e-tailers out of business.”
He added: “We saw the opportunity to build a new kind of parcel carrier focused primarily onsmall shippers, without taking on enterprise shippers that would have to be subsidised by thelittle guys. In researching the market demand for a 4th parcel carrier we heard a repeated cry fromhighly margin-sensitive e-commerce sellers in particular for equalising the disparity in theirshipping costs, and for real pricing transparency.”
