[mike3fan]

What he is talking about(or trying) is uShip's new tiered pricing structure,it is having an impact on the way carriers are doing buisness over there.this was posted on the sites forum and will explain their side of it.

Thanks to everyone for their feedback on this subject – some of your comments have been very insightful and well thought out. I can assure you that we are reading them and taking all community feedback into consideration.



Obviously, it has come as no great surprise to us that there would be some pushback on the new tiered fee structure. Anytime, in any culture or community in which a change occurs that causes uncertainty, there will be those who would prefer for the status quo. In addition, we recognize that this change will affect those of you who specialize in smaller, lower value shipments such as small animals, small moves, etc. in a much different way than it will affect those of you who specialize in commercial freight, vehicles, or boats. Indeed, as these posts show, much of the pushback has been from this former segment of our TSP’s. Let me shed a little more insight on some of our reasons for this change and the factors that drove this. While I don’t expect that these reasons will instantly appease all TSP’s concerns , perhaps they will at least reassure some that we have considered the ramifications of this change and are taking all input seriously.



First, a little background on uShip’s marketing efforts to date. To some of you, this may be obvious, but I imagine that there may be others that may be a bit in the dark on how uShip actually operates. It would be terrific and wonderful thing if uShip’s website, once built and functional, simply attracted shippers and shipments, like bees to honey. Many posts have poked fun at some of the uShip founders for “rolling in money” or as being “ millionaires sitting on a beach”. As one of those founders, I can only wish that that some of those images were the least bit true! My beat up 11 year old Honda sure could use a replacement!



The fact is, IF the uShip website simply attracted shippers and shipments on its own, those images might be true. Unfortunately for me and my old Honda, this is far from how it works for uShip and in fact very, very few large websites simply attract traffic because they exist without huge marketing expense. While all of us at uShip love our jobs and think that shipping and moving is the coolest, sexiest industry on the planet (we really do!), it seems that for the average American consumer, shipping and moving is not as cool and sexy as say, buying and selling Pez dispensers online. Thus, while a site like eBay can rely more on “buzz” marketing, uShip, regrettably does have to pay up. In fact, we spend a mind blowing amount of money every day advertising on Google, Yahoo, MSN, and hundreds of other search engines and websites so you don’t have to. To date, uShip has spent millions more in marketing costs on these websites and through other marketing channels than we have recouped in all our combined fees from TSP’s - ever. This doesn’t even include the enormous amount of money that was spent upfront and continues to be spent building, maintaining, and scaling the website infrastructure so that it can handle the amount of traffic that we now receive and hope to in the future.



So, why do we do it then? Because we all believe in the uShip business model and the long term brand that we are building. In time, the 98% positive feedback that our TSP’s receive trickles out to the population as a whole – by happy shippers telling their friends and neighbors, positive press and news articles, and customers that come back again and again. These methods of getting shippers and shipments are all free – which we love! In time, uShip may not have to pay tens of thousands of dollars each day to attract shippers and shipments - and perhaps I will finally get to trade in my old Honda for a new one – but unfortunately, that day is not today nor in the immediate future.



Because of this reality, we have to be fiscally conscience and aware of how we spend our limited marketing dollars and what return we can expect to receive in the short run. We want uShip to be the ultimate one stop shop for shipping everything from a Chihuahua to a construction crane. Thus, we spend our marketing dollars attracting both Chihuahua shipments and crane shipments for you to bid on. Unfortunately, because of the dynamics and competitiveness of internet marketing, it costs us almost the same amount to get that Chihuahua shipment on the site as it does to get that crane shipment on the site. However, a Chihuahua might ship for $200 while a crane might ship for something like $2000 (though probably more!). Right now, uShip takes in a LOT less match revenue when the Chihuahua matches (~$14) that it does when that crane matches (~$158). But because our costs aren’t nearly that different, that means we LOSE quite a bit on that $200 Chihuahua shipment. Yet, we have provided a very similar service to Shippers and TSP’s in both matches – use of our website, servers, forums, customer service, etc. Hopefully, you see the dilemma here – we would like to continue to be the best place to ship Chihuahuas on the web – however at our current match fee rates, it just doesn’t make business sense. Meanwhile, the TSP who shipped the crane is paying a lot more in fees, for a very similar service from uShip (yes, the actual delivery of a Chihuahua and a crane require very different levels of effort and expertise and are paid so accordingly, but the service uShip offers for each – the matching process, use of the site, servers, customer service, etc – is essentially the same). In essence the TSP who shipped that crane is in indirectly paying for several TSP’s to ship a Chihuahua.



If you understand the above scenario and recognize that it is being played out all over the website in all different categories every day, then you can understand the options that uShip has – ditch or drastically de-emphasize things like Chihuahuas (and other pets, small moves, etc) or somewhat adjust the fee burden from the TSP who delivers cranes to the TSP who delivers Chihuahua. We have chosen the latter option.



Several TSP have asked if we polled TSP’s prior to the change – we didn’t officially poll them though however over the years we have received quite a lot of feedback from “Crane” TSP’s who were understandably upset about having to indirectly pay the fees for all the “Chihuahua” TSP’s out there. And we feel their pain. Our solution to make things somewhat more equitable is the new tiered rate structure. Several posts have addressed concerns that the new rates will cause shippers to no longer accept matches of small shipments because that $200 Chihuahua which once cost the shipper about $215 will now cost about $230 (note that the TSP is passing all of these fees on the customer and still makes the same amount - $200 -IF they were to use the “Amount to Me” calculator, which we HIGHLY recommend come May 1). Yes, this is a doubling of uShip fees for this type of shipment – however we have done a lot of polling, market research and benchmarking in this area regarding our final costs compared to other methods of shipping off of uShip that the shipper could choose. In the example above, our new fee structure only represents a 7% total shipping price increase to the shipper. As often times shippers in these lower priced categories are saving up to 50%, our research shows that for the average customer their end shipping process, inclusive of new fees, will still generally be much lower for these types of smaller shipments than most other methods of delivery and thus if you are a “Chihuahua” TSP, you should see little to no drop off in your match volume. On the other end, if you are a “crane” TSP, your match % may slightly increase, as your bids will be lower than previous to the new tiered system. In general our research showed that shippers on smaller, lower shipping value items were saving much more, on average, than those shipping large, more expensive shipping value items, as compared to alternative, non-uShip methods of shipping, while those TSP’s were paying much less in fees. Thus, while the rate change affects those shippers/TSP’s more, they were also receiving a substantially larger (and the “crane” TSP might even say unfair) amount more value and savings under the current fee structure.



I hope I was able to address some of your concerns and questions. Thank you for your time

[RostyC]

Rank, could you explain lines 7 and 8, I'm a little confused why they are in the calculation. Also, just for clarification that 1.48 is solely cost right? That counts no money for you at all at that rate is that correct? Thanks rank.

[rank]

Originally Posted by RostyC

Rank, could you explain lines 7 and 8, I'm a little confused why they are in the calculation.

I like to compare the net profit on the load to what it would cost me to deadhead home. Beleive it or not, sometimes it's cheaper to come home empty.

Also, just for clarification that 1.48 is solely cost right? That counts no money for you at all at that rate is that correct? Thanks rank.

Sadly, that's true. It includes driver pay so if I happen to be on that load I get paid to drive, but otherwise the compnay only makes money over and above the $1.48.

[new_guy1969]

I use to drive semi trucks. But as the company wouldnt get me home I got out of it and someone threw me this box truck. So figured put it to use. Now I was told by a company in Grand Rapids Mi area to calculate a bid I would need to do this.

Fuel Milage
Maintenance
.35-40 cents per mile salary
Insurance

After you get all that you should place somewhere roughly between 1.20-1.30 per mile. You mulitply that times the milage of the run. That should set your minimum bid to accept.

I was told to start high and not to drop below the final number.

Like say I was taking a load from Grand Rapids Mi to Monroe Mi 179 x 1.20 = 214.80 to bill the customer.

Now would that be right?

[mike3fan]

Originally Posted by new_guy1969

Like say I was taking a load from Grand Rapids Mi to Monroe Mi 179 x 1.20 = 214.80 to bill the customer.

Now would that be right?

Not if it was me,there is pretty slim chance you would be able to find a back haul to GR,I would bill it as a round trip,or atleast a trip minimum of $400-500,figure it as a per day amount,straight truck rates should be billed different than TT.

[BanditsCousin]

I agree. You should have a short haul minimum, otherwise, there will be a better paying load elsewhere. I laugh at rates on Uship....3 bdrm house moving 500 miles, target pice 600 :P

[new_guy1969]

Ty so for straight trucks double what i figured. Now once i get my dot and mc numbers do the same thing even if crossing state lines?

[new_guy1969]

That you know of.

[GMAN]

I have a minimum haul rate, regardless of mileage. I suggest you come up with a minimum charge as well. Before you can realistically come up with a minimum rate, you may want to do two things. First, find out what your actual break even or costs run. Second, I would check around to see what others are charging for the same service. There are expedited companies who do this type of running. You will need to be competitive with others who are offering the same service. It sounds like you plan on dealing more with individuals rather than companies. Companies will have a more consistent need for your services. There is a small expedited company in my home town who regularly do runs within a 2-300 mile radius. They have several vans and seem to stay busy. I think they do a lot in the medical field.

[new_guy1969]

There is a company like that up here called same day delivery. But they wont use indpendants they use their own trucks and dont pay worth a hill of beans. 7.00 an hour is their pay. I approached them with using my truck they said no.