Shutl, a third-party service that aggregates point-to-point capacity providers to offer same-hour shipping service in the United Kingdom, will make an initial push into the United States during the first quarter of 2013.
In a couple short months, consumers in New York and San Francisco will be able to order items from three major online retailers and have them delivered in no more than 90 minutes, with some items arriving at the consumer's door in less than 20 minutes.
The company has plans to expand its reach during a second phase to Atlanta, Boston, Chicago and seven other cities in the United States and Canada.
Shutl has operated in the United Kingdom for the past two and a half years and now reaches consumers in 55 towns and cities throughout the country. Tom Allason, the company’s founder and chief executive officer, said the service works by using a series of couriers routing from retailer distribution points that are positioned 10 miles or less from the consumer. The service is presented within the retailer’s existing shipping options, so
same-hour or same-day shipping simply appears as a new option for order
It’s point-to-point shipping using bicycle couriers and truckers (the U.S. rollout will include foot couriers in Manhattan), but Allason said Shutl takes this idea to a newer level, connecting unknown, regional couriers to a broader, sustainable network. Eschewing the hub-and-spoke philosophy championed by FedEx and UPS, Shutl can make this type of super-shipping available at the same price of standard delivery, which, in some cases, could even be free of charge, he said.
“The problem with the point-to-point market and the messenger market is that it’s highly fragmented. The entrants tend to be local rather than national,” he told American Shipper
. “Individually, these businesses aren’t big enough or national enough to serve e-commerce delivery markets. What we’ve done is we’ve created a platform that connects the capacity of all these courier companies together.”
For this service to work well, Allason needs to find cities where consumers live close enough to warehouses and retail stores. In the United Kingdom, Shutl is up to about 75 percent market penetration, and Allason said they could probably push that number even higher. But he doesn’t have any illusions of that type of market penetration in the United States. Population density is entirely different in America, he said, and a marketshare closer to 40 percent would be a success.
“This proposition will never be a rural proposition,” he said.
Shutl’s entrance into North America is the continuing evolution of a trend in online retail shipping set to explode in 2013. Amazon is losing its sales-tax advantage and so is moving its warehouses closer to densely populated cities in anticipation of a huge same-day service rollout. Other retailers are taking notice of this change, Allason said. Amazon will start offering faster shipping to its consumers, and the rest of the industry, he said, will need to be able to compete.
The U.S. Postal Service, with the introduction of its same-day Metro Post pilot program in San Francisco, is also seen as a competitor. Since Shutl actually works with retailers, Walmart, which has a same-day shipping model through UPS, is seen as an opportunity rather than another challenge to overcome.
"In the U.K., when we started doing this, we had to convince retail partners of the need to offer this service. There was nobody out there offering anything similar,” Allason said. “Everyone over here has already realized they need to do it. The question at the moment isn’t whether they do it, it’s how they do it. If we weren’t doing it, someone else would.”
Allason firmly believes that 2013 will be the year that control over shipping moves from the retailer to the consumer, with customers choosing when and where to receive a package. It’s shipping as instant gratification, and Shutl intends to lead the charge.
So what will success look like for Allason, once he has a hold of the U.S. market and his service is humming along smoothly?
“When people start referring to getting their orders Shutled rather than delivered,” he said, “that’s when we’ll know that we’ve done what we need to do.” - Jon Ross