Breaking into the offshore shipping market is like facing a 20-foot swell without a flotation device. The venture may leave your business gasping and nursing its bruises on the rocky beach. However, with the right tools and skills, it is possible to surf that wave, just like it is possible to break into the offshore shipping market successfully.
The Surf: The Hard Facts
There are over 6.3 million people (2010 Census) currently residing outside the continental United States in Alaska, Hawaii, and U.S. territories, such as Puerto Rico, Guam, and the Virgin Islands. These potential customers of yours have the same needs and wants of every American consumer, yet they are often charged significantly larger amounts to ship goods to their remote addresses.
The customers who live in these areas represent a smaller percentage of overall sales for most companies, but these sales also represent the largest percentage of shipping cost per parcel in the United States. The cost of shipping parcels to these customers is so great that some companies either charge extra fees or opt out of servicing these difficult to reach locations.
Your Longboard: Creating Opportunities from Challenges
Shipping to areas like Anchorage, Waikiki, or San Juan is not exactly a piece of cake. These types of locations tend to have challenges around keeping low transit times and rates. Some carriers consistently impose accessorial charges on companies for delivering to these locations, and the extra charges are often passed on to their customers. Despite the extra cost, ground transit times continue to be longer than desired. It’s a frustrating situation for all involved.
One of the keys to understanding how to best service current or potential customers in these areas is to acknowledge all challenges as opportunities. This mindset can become a creative tool in pursuing offshore shipping. As Brian Adams mentioned in his book, How to Succeed, "Difficulties are opportunities to better things. They are stepping stones to greater experience." Breaking into the offshore shipping market could actually be what Adams called a "stepping [stone]" to growing and diversifying your company.
Being able to create opportunities from challenges is critical to ensure success in offshore shipping. By doing so, you are creating the longboard you need to surf that 20-foot wave. Nonetheless, without the necessary knowledge and skill in surfing, the waves may still end up smashing your business onto the shore.
Wax Your Board: Combating the Asterisk Syndrome
The six million people who live offshore often experience the Asterisk Syndrome where the fine print essentially says, "Where you live is going to cost you more" or "Sorry, but we don't ship to your address." This shipping exception is usually denoted by an asterisk at the bottom of the checkout page or is written under the delivery location address field. The challenge with the asterisk is two-fold.
Offshore locations have fewer physical stores and so customers frequently purchase products from online. For instance, Walmart has seemed to crop up all over the US within the last 20 years. You can find these stores in any state. However, you'll notice that on offshore locations, there are not as many Walmart stores when compared to onshore locations with similar populations and areas. As an example, we decided to compare Hawaii (offshore) and New Hampshire (onshore) because the states have almost equivalent populations and areas. We realize that New Hampshire in all actuality contains fewer people and less land than Hawaii, but this will only serve to further our point. (www.walmartstores.com/pressroom/StatebyState/State.aspx?st=AK).
For example:
Hawaii
Population: 1,366,862 (2010 Census)
Square Miles: 10,931
Number of Walmart Locations: 10
People per Walmart: 136,686
Walmarts per Square Mile: .000915
New Hampshire
Population: 1,321,445 (2010 Census)
Square Miles: 9,350
Number of Walmart Locations: 32
People per Walmart: 41,295
Walmarts per Square Mile: .00342
As you can see from this comparison, New Hampshire, the onshore state, has 320% more physical Walmart locations than Hawaii, even though Hawaii has about 1,500 more square miles than New Hampshire. At the same time, each Hawaii Walmart store possibly serves about 330% more people than New Hampshire stores. With that in mind, it's not hard to see why a customer in Hawaii would prefer to shop online rather than throw elbows at the local Walmart.
The Surf: The Hard Facts
There are over 6.3 million people (2010 Census) currently residing outside the continental United States in Alaska, Hawaii, and U.S. territories, such as Puerto Rico, Guam, and the Virgin Islands. These potential customers of yours have the same needs and wants of every American consumer, yet they are often charged significantly larger amounts to ship goods to their remote addresses.
The customers who live in these areas represent a smaller percentage of overall sales for most companies, but these sales also represent the largest percentage of shipping cost per parcel in the United States. The cost of shipping parcels to these customers is so great that some companies either charge extra fees or opt out of servicing these difficult to reach locations.
Your Longboard: Creating Opportunities from Challenges
Shipping to areas like Anchorage, Waikiki, or San Juan is not exactly a piece of cake. These types of locations tend to have challenges around keeping low transit times and rates. Some carriers consistently impose accessorial charges on companies for delivering to these locations, and the extra charges are often passed on to their customers. Despite the extra cost, ground transit times continue to be longer than desired. It’s a frustrating situation for all involved.
One of the keys to understanding how to best service current or potential customers in these areas is to acknowledge all challenges as opportunities. This mindset can become a creative tool in pursuing offshore shipping. As Brian Adams mentioned in his book, How to Succeed, "Difficulties are opportunities to better things. They are stepping stones to greater experience." Breaking into the offshore shipping market could actually be what Adams called a "stepping [stone]" to growing and diversifying your company.
Being able to create opportunities from challenges is critical to ensure success in offshore shipping. By doing so, you are creating the longboard you need to surf that 20-foot wave. Nonetheless, without the necessary knowledge and skill in surfing, the waves may still end up smashing your business onto the shore.
Wax Your Board: Combating the Asterisk Syndrome
The six million people who live offshore often experience the Asterisk Syndrome where the fine print essentially says, "Where you live is going to cost you more" or "Sorry, but we don't ship to your address." This shipping exception is usually denoted by an asterisk at the bottom of the checkout page or is written under the delivery location address field. The challenge with the asterisk is two-fold.
Offshore locations have fewer physical stores and so customers frequently purchase products from online. For instance, Walmart has seemed to crop up all over the US within the last 20 years. You can find these stores in any state. However, you'll notice that on offshore locations, there are not as many Walmart stores when compared to onshore locations with similar populations and areas. As an example, we decided to compare Hawaii (offshore) and New Hampshire (onshore) because the states have almost equivalent populations and areas. We realize that New Hampshire in all actuality contains fewer people and less land than Hawaii, but this will only serve to further our point. (www.walmartstores.com/pressroom/StatebyState/State.aspx?st=AK).
For example:
Hawaii
Population: 1,366,862 (2010 Census)
Square Miles: 10,931
Number of Walmart Locations: 10
People per Walmart: 136,686
Walmarts per Square Mile: .000915
New Hampshire
Population: 1,321,445 (2010 Census)
Square Miles: 9,350
Number of Walmart Locations: 32
People per Walmart: 41,295
Walmarts per Square Mile: .00342
As you can see from this comparison, New Hampshire, the onshore state, has 320% more physical Walmart locations than Hawaii, even though Hawaii has about 1,500 more square miles than New Hampshire. At the same time, each Hawaii Walmart store possibly serves about 330% more people than New Hampshire stores. With that in mind, it's not hard to see why a customer in Hawaii would prefer to shop online rather than throw elbows at the local Walmart.
The lack of physical stores in Hawaii, Alaska, and US territories provides a great opportunity for all Internet businesses with e-commerce capabilities, such as Amazon, Zappos, and QVC. These are just a few businesses that have chosen to implement an offshore shipping model. By doing so, they fulfill consumer wants that cannot be satisfied through the available physical stores. Remote customers are able to purchase products that are only available online and conveniently shop from the comfort of their homes. It's easy to understand why these types of e-commerce companies have quickly gained loyal clientele offshore.
2. So many e-commerce companies are still in the midst of Asterisk Syndrome. They either won't ship or only ship selected items to Alaska, Hawaii, Puerto Rico, and other US territories (for an added charge). Their challenge is obvious: the extra expense that shipping offshore requires does not fit into their current model. By combating the Asterisk Syndrome and choosing to sell goods to the six million customers offshore, these companies might be able to increase their volume significantly. They could apply wax to their longboard for a smoother ride into offshore parcel shipping.
Cross-Train: Balancing Cost vs. Speed
Balancing cost versus speed is a lot like cross-training. In cross-training, you focus on more than one type of fitness exercise (running, calisthenics, surfing, basketball, etc) in order to fully excel in your chosen sport. Like cross-training, working actively to increase the transit times and lower the cost of parcels is a great way to help your company succeed at breaking into the offshore market.
At this time, there are some businesses in the United States that decided to pull money needed to cover shipping costs from their customers' wallets. In the shipping world this is called a fuel surcharge. In other words, shipping is being paid for by the customers in some form or other.
Consumers living in distant locations deal with slow product deliveries at high cost to them all of the time. Their receipts carry a long list of surcharges before ending in a grand total. These include expenses for fuel, residential deliveries, and remote locations. To give an idea of how exorbitant these surcharges can be for these offshore locations, to deliver to Alaska, a resident must pay a remote surcharge upwards of $15 per package. This makes it challenging to gain additional offshore e-commerce business. It doesn't help that major integrated carriers own their own line haul and air. Often these vehicles and aircrafts aren't even close to being full of packages. Nevertheless, somebody has to cover these costs, and that somebody usually ends up being the customer.
In comparison to integrated carriers, regional carriers provide an “Already Going There Network.” They make use of extra space in vehicles that are already going to the same destination, allowing the carrier to drive down cost and eliminate any surcharges. Sometimes they can make partnerships with final mile delivery services, such as USPS, lowering the cost even more. Because these partnerships occur within the regional area, ground transit times are often quicker than those of integrated carriers, which will take an average of seven to nine business days to deliver the parcel to the customer. On the other hand, regional carriers can reduce the transit time to three to five days.
Catch a Wave: Choosing the Right Shipping Model
When it comes to ground service, regional carriers are more capable of delivering packages less expensively and faster than integrated carriers. Through their Already Going There networks, they are better able to match the desired e-commerce transit times than integrated carriers. At a two to three day pace, integrated carriers can be a little quicker, but their prices are significantly higher.
In choosing the right shipping model, you are essentially trying to discover which wave to catch. You want to know which wave will take your business the farthest with the best results. If you choose a shipping model that allows you to deliver to offshore locations with decreased transit times and costs, then you are even closer to achieving your goal of breaking into the offshore parcel shipping market.
And You're Surfing!
Whether you’re shipping offshore now or just thinking about it, you can use these tools and skills to break into the offshore shipping market successfully. In other words, you're ready to hang ten! You’ve learned how to use your longboard to create awesome opportunities; you have chosen to combat the asterisk and give your board a nice slather of wax; you have cross-trained like no other and balanced your cost versus transit time. Now you're ready to catch a wave and surf the swells to pursuing offshore parcel shipping. Mahalo!
Kevin Unbedacht is President of International Bridge (DBA www.ParcelPool.com.) He has helped the company succeed in providing excellent shipping service to Alaska, Hawaii, Puerto Rico, US territories, APO/FPOs. Kevin can be contacted at Kevin.Unbedacht@MyIB.com. You can also visit International Bridge’s website at www.MyIB.com.
2. So many e-commerce companies are still in the midst of Asterisk Syndrome. They either won't ship or only ship selected items to Alaska, Hawaii, Puerto Rico, and other US territories (for an added charge). Their challenge is obvious: the extra expense that shipping offshore requires does not fit into their current model. By combating the Asterisk Syndrome and choosing to sell goods to the six million customers offshore, these companies might be able to increase their volume significantly. They could apply wax to their longboard for a smoother ride into offshore parcel shipping.
Cross-Train: Balancing Cost vs. Speed
Balancing cost versus speed is a lot like cross-training. In cross-training, you focus on more than one type of fitness exercise (running, calisthenics, surfing, basketball, etc) in order to fully excel in your chosen sport. Like cross-training, working actively to increase the transit times and lower the cost of parcels is a great way to help your company succeed at breaking into the offshore market.
At this time, there are some businesses in the United States that decided to pull money needed to cover shipping costs from their customers' wallets. In the shipping world this is called a fuel surcharge. In other words, shipping is being paid for by the customers in some form or other.
Consumers living in distant locations deal with slow product deliveries at high cost to them all of the time. Their receipts carry a long list of surcharges before ending in a grand total. These include expenses for fuel, residential deliveries, and remote locations. To give an idea of how exorbitant these surcharges can be for these offshore locations, to deliver to Alaska, a resident must pay a remote surcharge upwards of $15 per package. This makes it challenging to gain additional offshore e-commerce business. It doesn't help that major integrated carriers own their own line haul and air. Often these vehicles and aircrafts aren't even close to being full of packages. Nevertheless, somebody has to cover these costs, and that somebody usually ends up being the customer.
In comparison to integrated carriers, regional carriers provide an “Already Going There Network.” They make use of extra space in vehicles that are already going to the same destination, allowing the carrier to drive down cost and eliminate any surcharges. Sometimes they can make partnerships with final mile delivery services, such as USPS, lowering the cost even more. Because these partnerships occur within the regional area, ground transit times are often quicker than those of integrated carriers, which will take an average of seven to nine business days to deliver the parcel to the customer. On the other hand, regional carriers can reduce the transit time to three to five days.
Catch a Wave: Choosing the Right Shipping Model
When it comes to ground service, regional carriers are more capable of delivering packages less expensively and faster than integrated carriers. Through their Already Going There networks, they are better able to match the desired e-commerce transit times than integrated carriers. At a two to three day pace, integrated carriers can be a little quicker, but their prices are significantly higher.
In choosing the right shipping model, you are essentially trying to discover which wave to catch. You want to know which wave will take your business the farthest with the best results. If you choose a shipping model that allows you to deliver to offshore locations with decreased transit times and costs, then you are even closer to achieving your goal of breaking into the offshore parcel shipping market.
And You're Surfing!
Whether you’re shipping offshore now or just thinking about it, you can use these tools and skills to break into the offshore shipping market successfully. In other words, you're ready to hang ten! You’ve learned how to use your longboard to create awesome opportunities; you have chosen to combat the asterisk and give your board a nice slather of wax; you have cross-trained like no other and balanced your cost versus transit time. Now you're ready to catch a wave and surf the swells to pursuing offshore parcel shipping. Mahalo!
Kevin Unbedacht is President of International Bridge (DBA www.ParcelPool.com.) He has helped the company succeed in providing excellent shipping service to Alaska, Hawaii, Puerto Rico, US territories, APO/FPOs. Kevin can be contacted at Kevin.Unbedacht@MyIB.com. You can also visit International Bridge’s website at www.MyIB.com.
