It’s been a long, somewhat strange trip for regional parcel-delivery carrier LaserShip Inc.
LaserShip was launched in 1986 as a document-delivery company. The dot-com boom of the late 1990s eventually pushed the Vienna, Virginia-based concern into the parcel-delivery world. Since then, it has assembled an impressive geographic footprint for a self-styled regional carrier.
Privately held LaserShip’s ground-delivery network spans 23 states in the East and Midwest, as well as the District of Columbia. It operates 54 distribution centers and four sortation centers. LaserShip blankets the East Coast from Maine to Miami, serves markets as far west as Indianapolis, and offered seven-day-a-week deliveries long before it was mainstream. Its addressable market is believed to be about 107 million American consumers. It is exclusively a business-to-consumer (B2C) provider, with typically a one- to two-day delivery window. It does not use airfreight. It generated $715 million in 2020 revenue, according to SJ Consulting Group, a consultancy.
Late last month, LaserShip added Tennessee to its network with service to Memphis, Nashville and Knoxville. The Tennessee service will increase LaserShip’s overall delivery coverage by 18%, the company said.
In the wake of COVID-19, regional parcel-delivery firms like LaserShip have been in huge demand as retailers inundated with e-commerce orders look for delivery capacity anywhere they can find it. LaserShip’s customer base has exploded by 400% over the same period in 2020, according to Josh Dinneen, the company’s chief commercial officer. The growth has come from companies that have been onboarded so far this year, Dinneen said.
In a recent phone interview, Dinneen said the story in 2021 has revolved around shippers looking to “deleverage” from the national carriers FedEx Corp. (NYSE:FDX) and UPS Inc. (NYSE:UPS). Dinneen said FedEx and UPS shippers, tired of living with inconsistent service and capacity curbs while paying higher rates and add-on surcharges, are looking for long-term alternatives. In contrast, last year’s narrative centered on unprecedented demand spikes that “raised the water level” for LaserShip and everyone else.
Regional carriers stopped accepting new 2020 business during the late summer and early fall because they felt it would compromise service to their existing customers during the peak holiday shipping season. Retailers began sending holiday forecasts to LaserShip in April, the earliest that’s ever happened, Dinneen said.
Though regional carriers are adding capacity, availability will remain tight as e-commerce inexorably gains retail share, according to Dinneen. The supply-demand imbalance is “not a 2021 problem,” he said. “This is a permanent shift.”
LaserShip will remain aggressive in its geographic expansion, according to Dinneen. It will eventually be in Chicago, and it is “looking very hard” at Texas, he said. The carrier will also deepen its coverage in the states it’s already in, he said.
The bad with the good
LaserShip’s growth trajectory has not come without its potholes, however. Over the past three years, 547 complaints against the company were lodged with the Better Business Bureau; many of the complaints were detailed and, in one case, explicit language.
LaserShip has also been embroiled in legal and regulatory conflicts over the past seven years, according to various published reports. In 2014, the company reached an $800,000 settlement with drivers in Massachusetts who accused it of misclassifying them as independent contractors. In 2019, it was ordered by the U.S. Department of Labor to pay nearly $600,000 to New Jersey drivers who were also the alleged victims of worker misclassification.
In September 2014, LaserShip reached a $5 million settlement with the city of New York for allegedly delivering more than 120,000 cartons of untaxed cigarettes between 2011 and 2013. The suit, which was prosecuted under the Racketeer Influenced and Corrupt Organizations (RICO) Act, charged LaserShip with breaking federal and state laws, leading to the loss of nearly $2 million in uncollected taxes.
The litany of customer complaints culminated in a September 2017 article in New York Magazine with a headline wondering if LaserShip “might be the most hated company on the Internet.” The story referred to LaserShip as the poster child of “parasitic companies popping up” to capitalize on what was then Amazon.com’s (NASDAQ:AMZN) burgeoning need for cheap parcel deliveries.
Since then, Amazon has made tremendous strides in building out its own delivery network. Amazon, which has long used LaserShip for same-day deliveries services, remains a partner. LaserShip has never publicly commented on the story. Dinneen did say that the February 2020 hiring of Brent Bissell, a former top executive at third-party logistics giant Ceva Logistics, as CEO was not in response to any fallout from the New York Magazine article.
According to two parcel experts, LaserShip has acquitted itself well in the marketplace. “Our experience with LaserShip is limited, but it has been great,” said Rob Martinez, founder and co-CEO of Shipware LLC, a parcel consultancy. “We’ve received excellent pricing for a few very large shippers, and from what I hear, service has been good.” Martinez’s sole complaint is that the pandemic-induced volume deluge forced LaserShip to be more selective in adding accounts. As a result, it hasn’t participated in as many of Shipware’s parcel bids to the degree that Martinez would have liked, he said.
The other expert, an executive at another regional carrier who sought anonymity, said the two firms essentially serve the same customers or different customers but with similar parcel-delivery profiles. While LaserShip may be sought after for its capacity, it would likely not retain the business of these demanding shippers if it didn’t perform adequately, the executive said.
From a publicity standpoint, LaserShip remains below the radar. In May, it was sold to private equity firm American Securities by fellow PE outfit Greenbriar Equity Group LP, which had owned it since 2018. The transaction was not disclosed to the transportation media; FreightWaves was told that the news was circulated only within a close-knit group of financiers. As of this writing, American Securities’ website had no announcement of the transaction, though it listed LaserShip as one of its assets. Greenbriar continues to list LaserShip as an active asset on its website.
LaserShip wouldn’t comment other than to confirm that the company had changed hands. An American Securities spokesperson and a Greenbriar official did not respond to a request for comment.