With UPS Ground transit times reduced in Houston, Nectron International Inc. solves a key distribution challenge.
Houston has a lot to like – the Space Center, the Astros and Rice University, to name a few. But if you're a small business owner based near Houston, its southern Texas location can pose a challenge. That's because ground transit times to the northeastern and northwestern United States and to Canada can stretch to four or five days, making it difficult to compete with businesses distributing closer to those areas.
Shaving one to two days off ground transit times helped Nectron expand into new markets and grow sales by 10 percent.
So when UPS shaved one to two days from its ground shipping transit times from Houston, Nectron International Inc. grabbed the opportunity to expand. The small business distributes imaging supplies, such as printer ink and toner cartridges, and sends out several hundred pieces per day to resellers and consumers.
"Transit time is everything," says Mark Kardoush, Nectron's owner. "We can earn or lose business on transit time. When it was taking four or five days to reach Los Angeles, San Francisco and the entire Northeast, we had difficulties doing business there. So when UPS offered improved time in transit, we jumped on it fast."
Faster to both coasts
The locations benefiting from the improved transit times include San Francisco and New York City, now reachable in three days, and Chicago and Orlando, now reachable in two.
"We can be almost anywhere within one to three days," Kardoush says. "Specifically in the West Coast and the far Northeast Coast, we can earn a lot of extra business. We also do some business in Canada, and that extra day [saved in transit time] earned us some business there."
Kardoush saw positive results almost right away. "We've seen 10 percent growth," he says.
Jim Pariseau, UPS area sales manager, expects that growth to continue. "They [Nectron] can leverage the faster transit time as they look to grow their e-commerce business. Time in transit is one of the factors that's important in the e-commerce space," he says.
Improved transit time has also helped Nectron build its fulfillment business, where the company ships orders directly for its wholesale customers.
"Just-in-time inventory is so critical today," Kardoush says. "The faster shipping times have earned us business because dealers can stock less and we do their fulfillment for them."
Nectron gained time-savings when UPS integrated WorldShip® technology with Nectron's in-house systems. The integration can make sure that a product is delivered within the appropriate transit time and that the users don't have to make choices. Pariseau estimates that this automation saves Nectron almost 300 hours annually.
Plus, customers automatically get their tracking numbers as soon as their packages ship, cutting down on customer service calls. They receive their invoice at the same time, streamlining billing.
The integrated system can select the appropriate service level for packages up to 9 pounds. "The system determines the most effective way to ship to maximize the savings," Pariseau says. Nectron has seen savings of $72,439 with this integration. In addition, the system checks to see whether less-than-truckload (LTL) shipments can be shipped more efficiently as small packages.
UPS schedules multiple daily pickups at Nectron, adjusting the schedule during the year to meet Nectron's business needs. Typically, the pickups are scheduled three times a day, at 2, 5 and 7 p.m. That last pickup allows Nectron to guarantee same-day shipping on orders placed by 6 p.m. "That extra hour is big for us and for our customers," Kardoush says.