Discount shipping goes mobile with uShip

uShip is a transport marketplace for people who need to move large items; from boats to horses, heavy machinery to household items. Users list items they want to move, and transport companies with spare capacity offer quotes at up to 50% discount on the normal shipping rates. Today, uShip launched its first mobile application for iPhone, Android and WebOS smartphones.

Transport is a mobile, real-time business, and this makes a mobile application more important than in other industries. Delivery drivers mostly use their cell phones for arranging deliveries (78%) and asking or answering questions (63%). uShip’s mobile app sends push notifications to drivers when a bid is accepted/declined or when users have queries, and it provides navigation features like verification of delivery addresses. For consumers, the mobile app keeps track of activity around their listing, such as questions from transporters, bids and delivery times.

Currently the mobile application is only available in the U.S., but it will be extended to Europe by the end of the year. 10% of uShip’s business is already done outside the U.S., and uShip sees international expansion as the next frontier for the business. In 2009, uShip launched localized web sites for users in Canada, the UK, the EU, and Australia. And this year the company established a European headquarters in Amsterdam. uShip had previously acquired a UK courier exchange business in the UK called BoxBee.

People in European countries tend to use transport companies more often than in the U.S. but across significantly shorter distances. This greater usage may be due to higher fuel costs or smaller cars. The transaction fees charged by uShip also vary widely between countries. Fees in the UK are 3.9% to 6.9%, while in the U.S. uShip charges 0.9% to 12.9%. The transaction fee depends on the item and the distance it is being moved.

I talked to uShip’s VP of Global Business, Shawn Bose, about the expansion into Europe. He says one of the main things uShip brings to the European market from the U.S. operation is a suite of tools built up over the years. One example is the shipping price estimator that calculates an average of what customers have paid for similar shipments (as opposed to the standard rates offered by a transport company). This is similar to seeing what customers actually paid for a standard room in a particular hotel rather than only seeing the rack rate.

Bose sees the rating and review system as another cornerstone of the business. A large transport marketplace (uShip has more than 1 million customers) contains a huge pool of aggregated knowledge about transport companies. After each transaction, customers are asked if they want to give feedback, and 60-70% of customers do. This means that transport companies that do not perform are quickly weeded out.

In the European market, uShip has competitors in the form of other transport marketplaces such as Shiply which we previously profiled. More generally, uShip sees competition in traditional methods of finding a transport company like the Yellow Pages or eMove as well as alternative means of shipping large goods like moving pods. For owner-operators who use traditional brokerage services, using uShip enables them to deal directly with the end customer, which typically means a higher margin on their services. uShip can also provide them with a new source of moving jobs.

uShip was founded in 2003 in Austin, Texas, has 65 employees and has received $5 million in VC funding.

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