Monday, April 30, 2007

How Alaskans Can Avoid Exorbitant Shipping Costs Levied By Lower 48 Companies; Visit The "Ship To Alaska" Website

Update May 25th, 2010: The business profiled in this story, Ship To Alaska, still exists as of the current date.

While searching the Web for other information, I found a story which originally aired back on June 28th, 2006 by KTUU Channel 2 (link no longer exists) about shipping costs to Alaska. Because Alaska is both distant and has a relatively small customer base, many Lower 48 retailers either won't ship to Alaska, or charge absolutely exorbitant shipping costs. In some cases, the shipping costs can be as much as twice the cost of the item itself.

However, the KTUU story focused upon Andrew Riehemann, an enterpreneur who founded a company designed to mitigate this problem while making himself a reasonable profit. This is a classic example on how the free market frequently works better to solve problems than government intervention, which is often bureaucratic and disproportionately victimizes the working class.

Riehemann decided there had to be a better way to save himself and other consumers money while making money, so he started a new business, Ship to Alaska, which is a partnership with Alaska Air Forwarding provding customer savings through consolidation.

"Basically, with our service, we have a membership service and as all members begin shipping their items, it basically creates volume and we take that volume and pass on the savings directly to the consumer," said Riehemann.

Their Web site shows just how much you can save, anywhere from 30 up to 70 percent. At the time this story aired, the company charged a flat rate of $1.20 a pound. At $20 a year, residential members can send up to 600 pounds. Small businesses pay $75 per year with a 1,200 pound annual limit and unlimited shipping for $150.

From the price comparison page of the Ship to Alaska website comes more specific information (assuming a basic package of 20 lbs with dimensions of 10" X 8" X 5"):

ShipToAlaska Air Freight - $24.00
FedEx 2nd Day Air: 2-3 days - $82.02
FedEx Ground: 4-7 days - $56.87
DHL 2nd Day Air: 2-3 days - $71.10
UPS 2nd Day Air: 2-3 days - $72.27
UPS Ground: 4-7 days - $54.61

Anchorage residents can pick up their order on a will-call basis at Alaska Air Forwarding. Consumers outside of Anchorage will have their item sent priority mail from Anchorage, still avoiding the higher shipping costs tagged on by the retailer when it's sent directly to Alaska. This will be particularly useful to residents of Bush Alaska, who are about to be hit with significant but unavoidable hikes in bypass mail shipping costs levied by the U.S. Postal Service.

Andrew Riehemann lives in Hawaii. He started a similar business there called Ship to Hawaii in 2004 after ordering a fan and found out the shipping charge from Massachusetts would be $140. Instead, he had it sent to his uncle in Utah. That shipping fee was just $8. And then the uncle took it along with him in checked baggage to Hawaii. That's where Andrew got his idea.

Some customer feedback on the Hawaii operation is posted on the Hawaii Threads Discussion Forum.

Commentary: This is a classic example of the free market providing a tailored solution to a persistent problem. There are limitations - only on-line orders are accepted, overnight delivery is not offered, the customer must do some preliminary spade work, and the customer must pick up the parcel. However, many people might consider the savings realized to be worth the extra effort.

Now, imagine how government would have solved this problem. They would have passed a law imposing ceilings on shipping costs to Alaska, with the subsequent enforcement bureaucracy and loss of profitability motivating many more companies to STOP SHIPPING TO ALASKA ALTOGETHER. The cure would have been worse than the disease, as endless government tinkering with our health care and public education systems has shown. Look how No Child Left Behind has politicized public education and transformed our schools into academic sweatshops where testing and reporting take precedence over teaching. Got vouchers???

There is a role for government. It is to provide basic protection to the country, and to ensure a bare-bones social safety net to be stretched beneath every deserving American citizen to ensure basic survival. But, as Alaska Governor Sarah Palin explained during her State of the State Address, it's not government's responsibility to make you happy, healthy, or wise, but merely to ensure the tools are available so that one can use them if one chooses. In other words, it's not government's responsibility to wipe your ass and tuck you into bed each night. Government needs to quit telling us what to eat, what to smoke, what to wear, what to say, which minority group's ass to kiss, whether or not stores can use plastic bags, and start restricting itself to its organic functions once again.

Kiehlmann's business is proof the free market can still solve most problems better than government.

1 comment:

  1. I don't know about your commentary there, Carl! It seems you want a government that tells people what to do and what "white" person's ass to kiss.
    I guess it just depends on what mole hill you happen to be standing on, huh?