Isle shipping company expands to Alaska
SHIPTOHAWAII.COM founder Andrew Riehemann has expanded his low-cost shipping business to Alaska -- and yes, it's called ShipToAlaska.com.
The spinoff came about after Riehemann found an article online about "how terrible shipping was in Alaska," he said. ShipToAlaska.com began service July 1 and had more than 100 members before the end of the month.
It struck a chord.
His ShipToHawaii business was born in late 2004 out of repeated frustration that many e-commerce sites ship for free or at very low cost, to the contiguous 48 states, but charge an arm and a leg to ship to the islands -- if delivery is offered at all.
Individual online shoppers and small and large businesses pay membership fees starting at $20 -- and save money on shipping through Riehemann's freight consolidation deals with companies in Alaska and California.
Members have sellers ship purchases to the consolidators, to benefit from free or cheap shipping, then pay a reduced rate to get parcels the rest of the way.
A large business that ships in tires probably has a "great freight contract with somebody else," but could save money by using his company for small-package service, Riehemann said.
"If you need your package by second-day air, I'm not your best choice, but most companies could save 50 percent if they'd be willing to wait three to five days," he said.
ShipToHawaii.com initially used Lynden Air Freight
and its Phoenix warehouse, but as the business grew, Riehemann wanted to offer ocean shipping to the islands in addition to air freight. "What we found out is we could do a much better job of that in California," so he struck a deal with Blue Water Consolidators Inc.
The Alaska consolidator is Seattle-based Alaska Air Forwarding Inc. It has a warehouse in Anchorage, from where ShipToAlaska customers can pick up parcels. Members in outlying areas can have purchases mailed the rest of the way.
Alaska Air Forwarding is primarily a commercial, industrial air-freight forwarder serving Alaska, said Jeff Dornes, co-owner. Its customers include Alaska's fishing, timber, mining and construction industries.
UPS and FedEx began offering ground transportation to Alaska within the last six months, Dornes said, "but very few of our customers are using ground (transportation)."
He knew exactly what Riehemann was trying to do. "We had a discussion and we pretty well thought along the same lines," Dornes said.
Dornes has seen others try to offer this type of service before, say, about 20 years ago after UPS employees went on strike and the company shut down Alaska service.
"What Andrew is able to do is, make it work from a data-entry standpoint ... there's a fair amount of programming and detail work that has to go into the system to keep the costs down and keep the material flowing up to Alaska and for the customers to be able to track it," Dornes said.
Riehemann's ShipToHawaii LLC, the parent company, is still a startup, "but we've certainly not been losing any money," he said.
Without divulging figures, he had enough budget to hire the Honolulu office of Wall-to-Wall Studios Inc. for rebranding and marketing work. A television commercial debuted last month that includes the new logo, a flying humpback whale.
Hawaii and Alaska have the humpback whale in common, said Bernard Uy, Wall-to-Wall president. The whale in the logo is flying, but whales also swim, representing the ocean shipping the company also offers.
Riehemann has noticed increasing orders arriving in Hawaii from IKEA, a furniture and home-accessory company that does not deliver to Hawaii or Alaska. He believes casual conversations with IKEA employees have generated referrals, but his next step will be to formalize such relationships. Deals like that could build his business and add service to his members, while opening the Hawaii and Alaska markets to retailers that currently ice out the last two states in the union.
is a reporter with the Star-Bulletin. Call 529-4747, fax 529-4750 or write to Erika Engle, Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210, Honolulu, HI 96813. She can also be reached at: email@example.com