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Entrepreneurs And Their Secrets
The OC Metro Cover Story by Kevin O'Leary.
| For eight years Rob Ukropina, founder and CEO of Overnite Express, has heard the same question: "When are you going to do all of California?"
On May 1, the nation's No. 1 regional delivery service will expand from its Southern California base and begin offering delivery and pickup services to all of California.
On May 1, the nation's No. 1 regional delivery service will expand from its Southern California base and begin offering deliver and pickup services across all of California.
"We will get a ton more business from our current customers as well as picking up new clients." say Ukropina, a wiry, energetic man who has started three businesses -- succeeding with two and failing with one.
"We will get a ton more business from our current customers as well as picking up new clients." say Ukropina, a wiry, energetic man who has started three businesses -- succeeding with two and failing with one.
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Overnite Express has been able to compete successfully against the giants of the delivery business - UPS and Federal Express - because it offers a high level of service - and later pickups for next-day delivery."We specialize in serving small entrepreneurial clients, law offices, architects, graphic designers. Often these professionals really benefit from later pickups. Now we even offer Sunday night boxes. You can work through the weekend on a project, drop it off by 9 p.m. and we can get it to Sacramento or San Francisco by 9 a.m. the next day." The last pickup for most overnight services is usually about 7 p.m. But because Overnite Express operates on the ground and does not fly planes to a national hub in the Midwest, it can both pick up packages later and get them there sooner. "Most FedEx packages are guaranteed by 10:30. For a few zip codes they guarantee by 8 a.m. We guarantee delivery by 9 a.m. for all of our packages. And if for some reason the
package is going to miss that deadline we have an e-mail system to alert the receiver that the package is on its way. No national carrier has that system."
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Another competitive advantage is made possible by the company's regional focus. "We can guarantee delivery to a degree unmatched by the national carriers. If a package was misrouted to San Diego instead of San Bernardino we will messenger it to the destination. About 2 to 3 percent of FedEx packages have address or delivery problems and end up being delivered a day late."
To service Northern California, Overnite Express will send packages collected the night before on the 6 a.m. commercial flights out of Ontario to San Jose and Sacramento and from LAX to San Francisco and Oakland.
In making the decision to cover the entire state, Ukropina and his team asked their largest 150 customers to see their usage records for shipping via FedEx, UPS and Overnite Express. It turned out that 60 percent of the packages going to Northern California go to four cities, San Francisco, Sacramento, Pleasanton and San Jose. This concentration made it worth the effort to expand and the management team also realized that by offering statewide service Overnite Express could become the primary carrier for many clients.
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"Many of our customers ship most of their packages inside California. By expanding we have made it easier for the customer. If it is easier for the customer it is a good business decision. Now they do not have to think, 'does Overnite Express go to Bakersfield?" Or, 'since I have one package going to San Diego and another going to San Jose I guess I'll use FedEx for both.' Now they can use us for both. Now it's simple - if you are shipping inside California, use Overnite Express.
"We can expect to get 28 percent more business by moving into Northern California and at the same time expand our Southern California business by 30 percent.
"Today, we are approaching $10 million in revenue.
"Currently, we do 3,000 shipments a day. That's peanuts when you consider that the new UPS facility in Aliso Viejo sorts 50,000 packages an hour. We plan to stay humble and continue to operate below the radar screen of UPS and FedEx. We have no interest in expanding outside of California. Our niche is regional. And the reality is that we have to offer better service here in California in order to compete with FedEx and UPS."
Ukropina began his career in the printing business and then decided at 36 to go out on his own and started a leasing company and a magazine. The three-year venture did not succeed. Ukropina says that he learned that building a network of suppliers and customers takes a long time. In starting Overnite Express he went back to his roots and got started by going to friends and business partners who knew him from the printing business and were willing to give him a chance.
"Service is what drives our company," he says.
By Kevin O'Leary OC Metro April 20, 2000
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