August 20, 2012 

 

IRNewsLink Sponsored Product Spotlight

A regional parcel carrier
aims for a larger share of the e-commerce pie

OnTrac steps up with faster deliveries and lower shipping costs.

Mark Magill, OnTrac

Navigating one's way through the forest of product information on the web, and then finding that perfect product at the perfect price, is hardly the end of an online shopper's experience. In fact, little of that shopping journey matters if an item fails to arrive in good condition, on time or at a reasonable cost—e-commerce realities that OnTrac is turning into opportunities.

OnTrac is a 20-year-old regional parcel carrier that delivers to 60 million consumers in the seven largest western states: California, Arizona, Nevada, Oregon, Washington, Utah and Colorado. OnTrac ships "next day at Ground rates for large e-retailers in Reno from the Canadian border all the way down to the border with Mexico, something no other delivery company is willing to do," says Mark Magill, the company's director of business development. OnTrac competes against the two remaining giants of shipping—United Parcel Service Inc. and FedEx Corp. Magill says DHL's pullout from the from domestic shipping market in 2009 (the carrier still handles international loads) presents an ongoing opportunity for OnTrac to step up and take a larger share of the e commerce market.

First, though, a bit about the landscape in which OnTrac operates. After all, retailers might not be receptive to the need for an alternative carrier were it not for the growth of e-commerce and the growing expectations of consumers that they'll get free shipping. In fact, 52% of fourth quarter online orders last year carried no shipping charge, according to web measurement firm comScore Inc. These are realities about which Magill is well aware.

Also consider these figures: U.S. e-commerce sales reached $194.3 billion in 2011, up 16.1% from 2010, according to the U.S. Commerce Department. The government agency says that 4.6% of total retail spending took place online during 2011, up from 4.3% in 2010. And in the first quarter of 2012, online retail sales increased year over year by 16.6% to nearly $44.3 billion, comScore says. Forrester Research, meanwhile, projects that U.S. online shoppers in the United States will spend $327 billion in 2016, up 45% from this year.

All that spending results in a rising flow of packages that have to be delivered to online shoppers. UPS said this summer its 3.5% year-over-year increase in package deliveries in the second quarter was mainly from online retail deliveries. The trend has hardly gone unnoticed at OnTrac, where half of all deliveries involve items sent from businesses to consumers, Magill says. That represents a steady shift from OnTrac's early days when it mostly handled business-to-business shipments.

 
 

OnTrac is the regional leader in overnight package delivery

We offer the highest quality of service at the most competitive rates. OnTrac delivers time-critical parcel service to California, Arizona and Nevada, Oregon, Washington, Utah and Colorado. With faster transit times that national carriers, OnTrac can increase your productivity.

For transit maps and times, call 800-334-5000.

 
 
 

Above and beyond

OnTrac does not expect to ride the e-commerce wave to emerge as a third national player behind UPS and FedEx, Magill says. He can't envision any private carrier taking that spot. Instead, the regional carrier is hustling to provide services to online retailers that its rivals do not offer, and to do so at affordable prices. "Since it's a duopoly out there these days, people need alternatives, companies that do things the big guys aren't willing to do," Magill says.

For one thing, that means handling the so-called "last mile" of the delivery process—that is, carrying the shipment to the consumer's house or other shipping location without handing the delivery off to another carrier. "We do it all ourselves," Magill says. "We deliver right to the end consumer."

Competing in an increasingly competitive e-commerce world also means working longer hours to help online retailers process more shipments per day, he adds. "We have to be more flexible in providing faster deliveries and later pick-up times," he says.

For example, Magill says OnTrac picks up parcels on Sunday for Monday delivery within its region—that is, deliveries from Reno, Nevada, to Los Angeles—for certain giant internet retailers that ship 2,000 packages or more a night. "These are the type of companies to whom we offer Sunday pick-up with Monday delivery in Zone 4 areas," he says. "We could only do that for huge shippers, obviously, but they are particularly attracted to OnTrac because of the faster time in transit we provide especially since so many Internet orders are placed over the weekend."

That doesn't mean OnTrac can't offer benefits to smaller e-retailers, as well, Magill says. According to OnTrac, the surcharges it assesses for such tasks as residential deliveries, remote area deliveries and for handling oversize packages run less than the fees charged by the national carriers. OnTrac does not charge for such services as e-mail return labels or collecting signatures. "The lower accessorial charges and other fees we offer is one of the key ways that OnTrac can be more cost-effective than the national carriers," he adds. "With us being less expensive, smaller retailers can be competitive."

And those retailers have to do more to survive, according to multiple surveys and reports about what online shoppers expect when it comes to deliveries. ComScore, for instance, released a study this spring that found that at least 42% of online shoppers have abandoned online shopping carts because of long estimated delivery times. The study also found that 48% of consumers are not willing to wait more than five days for packages to arrive.

With more consumers shopping online, and with more retailers having to meet shoppers' delivery demands, Magill says OnTrac is poised to step up for online retailers.

 
 
 

With fewer accessorial fees than the national delivery companies, OnTrac can boost your bottom line and save you money. At OnTrac, we are committed to providing the highest quality of service at the most competitive rates. We routinely go the extra mile to help get the job done for our customers.

For more information, visit www.ontrac.com.

 
 
 

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