US ecommerce shipper Equaship eyes early 2013 reboot
US e-commerce shipping alternative EquaShip is gearing up for a relaunch of its services this time next year, it revealed today. The Seattle-based company looking to challenge the likes of UPS and FedEx as America’s “fourth carrier”, but focusing on smaller and medium-sized online retailers rather than chasing volume-providing heavyweights, was forced to suspend its services in February after it ran into difficulties with primary transportation provider, Blue Package Inc.
Today, EquaShip revealed that it will be working with shipping software company Datatrac to build its own proprietary IT system over the next year, to link up a network of regional carriers and parcel consolidators without a middle-man like Blue Package being required.
The company is anticipating that its service could start up around March 2013 in beta, for a full launch around April 2013, with anticipation of nationwide coverage in the United States from launch, covering more than 80% of the US population.
EquaShip will be using regional carriers for pick-up and for the most part the US Postal Service for last mile delivery, although in some cases regional carriers will be providing last mile delivery as well. Services will all come with $100 worth of free “EquaSurance” insurance liability.
From launch, the company is planning a SuperEconomy 2-8 business day service and also a Premium 5-day service, potentially using air and ground transportation, which would be of interest for retailers like eBay merchants requiring faster shipping.
EquaShip is also planning an overnight service for intra-regional shipping, also looks set to offer international services from next year’s launch.
IT platform
“This will drive additional business to carriers while helping them better serve a broad range of online merchants”
Ron Wiener, the EquaShip chief executive, told Post&Parcel that his company had looked at various different shipping software options before deciding to sign up Atlanta-based Datatrac to provide a custom cloud-based IT platform.
He said existing shipping platforms could not handle the specific demands of the unique EquaShip proposition.
Wiener said: “We’re not using their existing off-the-shelf technology, but Datatrac impressed us a lot with their management team. They have a lot of expertise on the carrier side, and they have already been building systems for a lot of the carriers.”
The new carrier-agnostic platform will have API systems allowing the individual carriers in the EquaShip network to integrate with it, so that full visibility can be provided for EquaShip shipments, meeting the requirements of online marketplaces like eBay and Amazon Seller Central.
Henry Dixon, the Datatrac CEO, said: “Ultimately, this solution will create a platform that will drive additional business to hundreds of carriers while helping them to better serve the logistics needs for a broad range of online merchants.”
Lower costs for SMBs
Wiener said using the US Postal Service would still be the lowest cost option for the last mile in a “majority” of shipments, but observed that in an increasing number of cases, the regional carriers providing the pick-ups were able to compete on last mile delivery as well.
He said: “It is better to keep it with the Postal Service for most of our shipments, but for some of them it will be cheaper to keep it within the regional carrier’s system. Amazon has come along and taught a lot of them how to do it.”
The EquaShip CEO said that as was seen when the service initially launched last October, there would most likely be interest from some larger ecommerce merchants, but he said the company would focus on services for smaller and medium-sized businesses – particularly of the type finding it difficult to compete with the “free shipping” offered by larger online retailers.
Wiener said: “If you look at the statistics from ComScore in 2010 there was massive growth in ecommerce, of around 15%, but in 2011 there’s a big divergence in growth between those smaller guys who can’t provide free shipping, and the bigger guys. The larger sellers are growing at 2-3 times the rate because they can provide the volume to allow ‘free’ shipping.”
EquaShip’s model is not to provide large discounts for huge volumes provided by larger ecommerce shippers, so that smaller players have to pay comparatively higher rates. The company is basing its model on uniform pricing for all customers, and believes its rates will be between 10 and 50% cheaper than rival services like FedEx SmartPost or UPS SurePost for smaller ecommerce retailers.
