E-commerce shipping start-up EquaShip suspends service
US e-commerce shipping start-up EquaShip has temporarily suspended its services in order to restructure its network and change its primary transportation provider The Seattle-based company launched its services in the last quarter of 2011, aiming to provide an alternative, cheaper shipping option for smaller and medium-sized online retailers.
But the company said at the weekend that its initial transport partner, Minnesota-based Blue Package, Inc., was unable to provide the kind of delivery speeds now expected for e-commerce shipments, and was also constraining the geographic area in which collections would be available.
Rather than continue to struggle on, EquaShip’s management team has decided to suspend operations and rethink the entire network.
Ron Wiener, the EquaShip chief executive, told Post&Parcel the service suspension could last up to nine months or a year, but that his company would come back stronger, not only covering a wider area of the US, but also offering different levels of service including same-day and expedited options as well as international services.
“We were having problems with transit times,” he said, explaining that parcel consolidators like Blue Package were not used to dealing with a national service structure, and that there were difficulties in the first mile collection arrangements.
“In e-commerce if you can’t deliver something in five days, it can knock a retailer’s Amazon or eBay rating, and some of these guys win by being high in the listings,” said Wiener.
EquaShip had been building up a sales team over the winter as it became clear larger retailers than originally anticipated were interested in the offering of prices up to 80% below UPS and FedEx.
Wiener said his company had had to lay off the new salespeople, although the jobs would most likely be available later this year.
He said the original management team would remain in place, spending the next month studying possibilities for how to set up a new logistics network, and that taking on new software engineers to develop a new IT platform would mean headcount at EquaShip will remain around the same as it was.
Commenting on how a new network would look, he said it was too early to say for sure, but the company could use a mix of regional couriers and postal consolidators, along with USPS last mile delivery.
In the mean time, Wiener said EquaShip would continue working to integrate its offering into more e-commerce software systems, and said that existing e-commerce partners had reacted to the developments positively.
“We let everybody know at the weekend, and they’ve all been extremely supportive of our decision,” he said.
“They understand that if Blue Package ended up constraining us to 2,300 zip codes on the East Coast, the revenue opportunities are significantly reduced. This way we will be able to serve 70-80% of US zip codes, and also add service levels, and so they understand that, and that it’s just about waiting a few more months,” said the EquaShip CEO.
