E-Tailers Are Changing the Rules on Shipping

Posted on Aug 31, 2011 10:45:00 AM

Remember when it used to take forever to get your online orders delivered? The rules are changing, as we’re seeing with Amazon’s newly acquired subsidiaries. Diapers.com, Soap.com, and Wag.com all offer free 2-day shipping with orders of $49 or more. How is this possible? Executive Vice President of Operations Scott Hilton talks about the technological advances in the video below. Another reason it’s affordable? They use OnTrac.

Diapers.com

OnTrac offers next-day shipping for exceptionally low rates in the Western seven states. In the case of these three companies, OnTrac can ship next day to a majority of its service area from their warehouse in Reno, NV.

Are you giving your customers the best you can?

Check out the interview with Scott Hilton on YouTube »

Click here for an article about Wag.com on Internet Retailer »

Topics: package delivery options, regional package delivery company, Internet Retailer, Soap.com, OnTrac Shipping, Diapers.com, Wag.com

Regional Carriers Can Boost Your Business in All the Right Places!

Posted on Jul 19, 2011 4:27:00 PM

Mark Magill, Director of Business Development at OnTrac, is interviewed by Russell Goodman of Supply Chain Brain. He offers a breakdown of the current status of the shipping industry, and why your shipping rates with national carriers are going up. Watch the video for a look at the current status of the shipping industry, and the change in focus from the national carriers that is leading to your shipping rates going up.

MMagillSCB

Click here to watch Mark’s full interview.

Topics: package delivery options, residential delivery, accessorial charges, Residential Delivery fee, regional package delivery company, yield management, Supply Chain Brain, Accessorial fees, OnTrac Shipping, OnTrac, ontrac.com, Residential Delivery Area Surcharge

Long Walk, Short Tier: The Price Tag of Shipping "Incentives"

Posted on May 26, 2010 9:08:00 AM

man falling into water

Everybody loves a good deal, or at least the perception of a good deal. We signup for the credit card with the most points, fly on a specific airline for the miles and keep a dedicated keychain for all the loyalty cards from retailers we hardly ever visit.

The result? Junk mail, spam, auto-renewing subscriptions, black-out dates and the realization that the fine print just extended the contract by another two years.

National carriers play the same game. They'll entice you with what appears to be an aggressive discount and then try to buy your allegiance with incentive tiers. All wrapped in a contract loaded with contingencies, and so complicated that it's practically responsible for the creation of an entire industry (Google "Freight Consultants").

What are incentive tiers? They're a scale that uses shipping revenue to determine a percentage reward. The more you ship, the more you get back. Just like all those loyalty cards in your wallet, incentive tiers were created to "motivate" you into using one shipping company instead of multiple carriers.

That sounds dandy, but consolidating carriers strictly because of incentive tiers or perceived discounts may not be in your company's best interest. National carriers offer these kinds of programs because they know there's competition and tier incentives are the best way to distract you from what other carriers have to offer.

That's where regional carriers come in. They are extremely flexible and aware of the capabilities within their service area. That knowledge allows them to not only push the limits on transit times, but also operating expenses. As a result, you get later pickups, faster transit times, fewer fees, earlier deliveries and rates much lower than national carriers. And, thanks to technology, regional carriers are well-equipped to provide the same features that you've come to expect from the other guys.

Not enough to change your mind? Well, before you leap off the tier-incentive cliff, be aware of a few things:

Fees & Surcharges Don't Count
Tier incentives are based strictly on package revenue. The fees that account for up to one-third of your bill with national carriers are not added.

Beware of the Little Details
According to a presentation by the Navigo Consulting Group, your tier status is most often calculated every 13 weeks as opposed to 26 or 52 weeks. In other words, if your business has "busy seasons" you'll likely wind up on a tier roller coaster.

Mind the Gaps
Know the range of your tier incentives and volume discounts. You may be able to benefit from other carriers without modifying your current rate and incentive structure.

Industry Trends
Thanks to technology, innovation and standardization, companies can easily incorporate multi-carrier software solutions to take full advantage of each shipping company's particular strengths.

In the end, all it takes is some number crunching and fact finding to learn that the incentive tiers and percentage discounts offered by national carriers may not benefit your shipping goals. What you may lose in incentives and discounts from one carrier pales in comparison to what you stand to gain from the rest. The tiers aren't worth the tears.

OnTrac offers free, detailed price comparisons. Interested? Email shippinganalysis@ontrac.com to get started.

Topics: regional package delivery company, carrier consolidation, shipping price comparison, tier incentives

5 Ways to Save Money with a Regional Package Delivery Company

Posted on Oct 1, 2009 4:28:00 PM

In the midst of the current economic climate, shippers are actively seeking to reduce their costs.  Shipping with a regional package delivery company can reduce a company's shipping spend by as much as 40%.

Just by eliminating the 85 plus accessorial charges that the national carriers levy, a company can save over 25% off their current shipping costs.

Below are 5 reasons, shippers should consider using a regional package delivery carrier:

1) Increased Productivity - Since regional package delivery companies use ground-based solutions to deliver their packages, they have much greater flexibility in offering their customers later pickup times.  They can offer pickup times as late as 8:00 pm and still provide next-day delivery.  For shipments staying in the local area, pickups can be made as late as midnight.

2) Faster Deliveries - Because regional package delivery companies are geographically based, they can provide guaranteed next-day delivery for ground shipments to Zone 4 destinations over 600 miles away from the pickup point.  And can often save a transit day compared to major national carriers.

 

 

3) Aggressive Pricing - Because regional package delivery companies have a specific market niche to fill, they offer rates as low as 40% less than national carriers.  Large companies typically have national contracts with discounted rates from the national carriers.  But now with the exit of DHL from the domestic market there is no "low price leader" to speak of.  As we have seen from the 2009 rate increases, even in challenging economic times, the national carriers will continue to add accessorial charges and raise their rates.  It would very much be in the shipper's best interest to find out where their shipping spend lies on the the national carriers discount tiers. They may be able to move a significant volume over to a regional package delivery company, maintain their national discount level and significantly reduce their costs. 

4) Accessorial Fees- The duopoly of national carriers have over 85 additional charges (accessorials) that can be added to the base price of you shipments.  These include delivery area surcharges, residential surcharges and additional handling fees.  They can add as much as 28% to your package rate.  Most regional carriers limit their additional charges to a handful of fees such as CODs, Saturday delivery and declared value.

5) Within the Region- The majority of packages shipped by companies stay withing their general geographic region.  According to a study done by The Colography Group, 70% of of packages remain within the Zone 4, 600 mile radius of the shipping origin.  And, for regional carriers like OnTrac who also service Zone 5, that percentage climbs to over 80%. 

Using a regional package delivery company can increase your company's productivity by providing later pickup times, give you a speed to market advantage over  your competitors through improved transit times and reduce your shipping expenses through lower rates and fewer accessorial charges. 

Topics: accessorial charges, regional package delivery company, Zone 4 deliveries, overnight shipping at ground rates, save a transit day, 40% less