Upstart to Challenge FedEx

It will enter a market where only B2C shipments are growing thanks to the Internet and where the pressure is on the rankings of SMBs to offer free delivery in other words also fast.

Most small and medium-sized businesses, it figures, pay full retail prices for parcel delivery giants FedEx and UPS - and ultimately their artificially delayed last-mile trudger USPS - to handle their goods. That means they are paying two-four times more than the chi-chi large shippers for what degenerates into inferior customer service. They as well have to have their parcels ready to go several non-competitive hours sooner than the larger shippers.

The start-up

The start-up, which says it won't do business with the enterprise, is building out a nationwide network of major retail chains where SMBs and the evenly put-upon consumer can drop off their parcels. The chains, conversely, see the new carrier driving significant foot traffic through their doors.

It will employ many of the same carriers that mega-shippers like Amazon use in their hyper-efficient transportation networks, beginning with Blue Package, the largest parcel consolidator afterwards FedEx SmartPost and UPS Basic, which will manage all of its carrier interfaces as so then as operate its first-mile network.

Wiener says, "For decades, mail order catalogers - and in more recent times, e-commerce sellers - used to be able to rely on the markup they made on shipping fees to create their entire net profit for the year. Twenty-five years ago no shipper ever got a discount from FedEx or UPS. Those days are gone. Since JC Penny got its first discount these giants have been in a race to the bottom giving away discounts of 75% or more to win accounts like Amazon, during consistently raising prices for SMB shippers by 7% a year to compensate. It's forcing many small retailers out of business. We saw the possibility to build a new kind of parcel carrier focused primarily on SMB shippers, without taking on enterprise shippers that would have to be subsidized by the little guys."

The most read research reporter for the past 20 years

Maureen O'Gara the most read research reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected research reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara