Goldilocks & the Three Bills of Lading — Part I (Papa Bear)
Finding a Shipping Carrier that is JUST RIGHT 👌🏼 for Your Company
In this three-part series, we will explore the typical shipping requirements of companies L, M, and S, and how AxleHire may better address some of these needs than other nationwide or regional carriers. This first installment is about LARGE shippers. (The second installment is here and the third is forthcoming.)
AxleHire’s Shipper Size Chart (by domestic U.S. deliveries)
LARGE: > 25,000 DELIVERIES / WEEK
Medium: 1,000 to 25,000 deliveries / week
Small: < 1,000 deliveries / week
For our purposes, large shippers are those that make 25,000+ domestic deliveries each week. These companies range from the ginormous (e.g. Walmart, FY2018 revenue $500.34B) to the more modest (think $500.34 but with an “M” instead). Once a business gets to a certain size, its operations will invariably increase in complexity to support top-line growth (e.g. via omni-channel sales) and cost control (by more hands-on management of each aspect of the supply chain). A large shipper tends to have a full slate of logistical needs, which we have identified as follows ~
As you can see, AxleHire has the capability to do all of the above for large shippers, so that logistics managers won’t need to coordinate with a dozen different services — unless they want to! (We’re quite confident that we offer the best value for what we do, so we welcome comparison shopping.)
Each national or regional carrier will have its own comparative advantage in its respective market(s), and it is a tall order to compete well on all fronts, but that is exactly the kind of challenge that we have taken upon ourselves. What a shipper should look for is a carrier that has the competence and flexibility to meet its needs. Sam Kozhebrodsky, who heads up business development for AxleHire, puts it this way: “We can do same-day and next-day for Walmart and all our other customers large and small, and are incredibly flexible with their teams — offering technology integration, a full menu of services, and price points that regionals like OnTrac and point-to-point services like Deliv cannot match. For these carriers, if you do not fit into their last-mile models, they don’t want you. For AxleHire, we always come into a partnership with a ‘we can do this’ mentality, assuming it doesn’t come as a loss for us.”
WHAT do some of the largest shippers use us for, and why?
SAME-DAY & NEXT-DAY DELIVERIES
😎 Because We Can
Walmart uses us for same-day deliveries, and some of our other big customers use us for both same-day and next-day deliveries along both coasts. (We’ve got great coverage in the Florida market and the entire West Coast.) While most carriers offer next-day service, including OnTrac, a large regional competitor, this level of service is no longer adequate for companies trying to reach or exceed the high bar set by Amazon’s Prime Now and AmazonFresh. Same-day service is one of AxleHire’s core competencies since Day One, not an afterthought that was put together to recapture market share. We get hired for this. Sure, you can get same-day service from UPS, but no one is going to activate something called “UPS Express Critical” to get a box of diapers dropped off from across town. (AxleHire is authorized to ship medication too, so if there’s anything truly critical, like saving lives, we can help.)
📱Technology Integration
We have a highly skilled engineering team dedicated solely to creating seamless integrations between our routing and recipient-facing applications and a customer’s proprietary or off-the-shelf POS, inventory, and logistics software. Our innovative technology is 100% focused on the recipient’s experience, from delivery window selection to parcel tracking to real-time notifications to dispute-free proof of delivery. By tasking AxleHire to tackle the most costly and challenging “last mile” portion of the delivery route, companies essentially engage us as a white label carrier to work expertly yet unobtrusively in the background, such that a Walmart customer would always get the Walmart delivery experience. AxleHire’s fully integratable technology and high recipient satisfaction ratings help our largest customers build or reinforce their brands while simultaneously saving money, which brings us to the next (and perhaps most important) point.
💵 Cost Savings
High-volume shippers already have significant bargaining power and routinely extract rate concessions from established carriers to the tune of 30–40% off for ground shipping. Even then, many choose to work with us because AxleHire runs on a lower overall cost structure thanks to our smarter algorithms and efficient operations, and we are able — and fully willing — to pass along these cost savings.
For example, consider a next-day shipment of a 15 lb. parcel from Orange County, CA to Seattle, WA. All of the following are true:
- Our unit rate is cheaper than the unit rate of our regional competitor (OnTrac) as well as UPS, FedEx, and USPS.
- Our unit rate is still cheaper than the other carriers even if the customer is getting a volume discount of up to 30%.
- By extension, after applying AxleHire’s own volume discounts, the rates are even lower.
- Our discounts are given based on the current week actual deliveries scheduled, not on an annual spend calculus based on a 52-week rolling average (e.g. UPS and FedEx) or on the preceding four quarters’ total spend (e.g. USPS Commercial Plus). AxleHire’s volume discounts don’t have to be “earned.” Any company can start shipping 25,000 boxes with us and enjoy that level’s discount — you don’t need to have been a customer for a year to realize the savings. (Don’t worry if you’re a smaller shipper—our first tier for volume discounts starts at 500 packages per week.)
On top of that, AXLEHIRE DOES NOT IMPOSE ANY SURCHARGE OR ACCESSORIAL FEES. That needed to be said in ALL CAPS, BOLDED.
Our job is to transport a customer’s package from Point A to Point B—that’s what we get paid to do, regardless of whether Point B is a commercial or residential address, whether it’s during the slow summer months or the High Holidays. If you’ve ever experienced the atrocity of airline fees—pay extra to sit with your kids!—or worse still, having to pay to dry your hair after forking out $$$ for a color job, you know how infuriating and dishonest so-called “base rates” are. In contrast, AxleHire is like the Southwest Airlines of shipping carriers. Southwest has rightly earned its reputation for being an affordable, reliable airline with a cult-like following. It allows two checked bags for free, and has $0 change fee — “an airline that doesn’t jack you around for making basic changes” — unlike, say, United, which charges $200 for itinerary changes. Likewise, AxleHire doesn’t charge extra to get the basic job done.
Here, let us help you with your comparison shopping! Check out the surcharges for package delivery by FedEx and UPS (pages 120–123 of the linked document), as well as UPS’ 2019 accessorial fee hike announcement. When you tire of it, visit us at www.axlehire.com, where you’ll find nothing of that nature. Your money is not mere nickels and dimes for others to pilfer; choose to keep it and invest in the continued growth and success of your business instead.
SAME-DAY ICE-CREAM DELIVERY
It gives us more joy than anything else to announce that we now deliver Häagen-Dazs ice-cream in San Francisco direct from their facility to your doorstep—no Instacart required. We’re super proud that the world’s largest food company, Nestle (parent of Häagen-Dazs), has chosen to work with us in the Bay Area market. Nestle’s promise to its customers is delicious ice-cream “in as little as 1 hour,” and delivery is FREE if you order three items or more (otherwise it’s $7).
How is Nestle able to offer this near instant gratification of your ice-cream craving? First and foremost, AxleHire has the flexibility to source an entire delivery system for Häagen-Dazs, with freezer vans that also double as temporary storage units, at a very good price point. Secondly, our technology is fully integrated with theirs, so the ice-cream customer is getting the Häagen-Dazs Direct experience. Orders are accepted from noon to 1 AM (PST) seven days a week, so yes, AxleHire will deliver your fix even if it’s in the middle of the night. Your order will even arrive with a free spoon — what are you waiting for? 😋
Even though large shippers have the resources to experiment with different logistics arrangements, from investing in technology partners to outsourcing to local providers to taking it all in-house, this may well end up becoming a distraction from running their core businesses. Walmart ambitiously tried to get store associates in New Jersey and Arkansas to deliver packages on their way home after a full shift on the sales floor. As reported by Reuters, this plan, which was announced in June 2017 but was quietly shuttered by January 2018, failed to gain traction with skeptical employees who only earned $2 per package plus overtime pay for one hour max when most routes took more than two hours to complete. Last June, Uber also killed its UberRUSH program, for which Walmart was the largest retail partner. Ride-hailing companies came to realize that it’s not so simple to carry people in the backseat and groceries in the trunk. “It is incredibly hard to deliver people and packages together,” Reuters quoted a delivery company representative who worked with Walmart as saying. “They are two completely different business models.” A similar pilot between Walmart and Lyft also failed to take off.
The thing is, we encourage experimentation and believe the whole logistics space is better off when carriers and shippers alike put on their thinking caps to creatively solve the last-mile problem. But, not everything works out, and if you have to fail, fail fast. If you get lost and falter, please knock on our doors. Come on in, and AxleHire will be sure to serve you a big bowl of porridge that hits all the right spots.
Cecilia Tom
Cecilia is passionate about building efficient and resilient systems for the greater good. She is the lead storyteller for AxleHire.
