Why is OnTrac Still in Business? [Know This FIRST!]

In a perfect world, you would expect OnTrac to be out of business right now after their slew of service failures. Unfortunately, perfect is a hyperbole. 

From the multiple reviews on independent sites and Social, you can easily nod that OnTrac leads in terms of the worst last-mile package delivery companies in the world. 

But why is OnTrac still in business? It’s a query we receive every other day here at Package Corner. 

From what we have gathered having used OnTrac, read on as we share our latest findings. 

Reasons Why OnTrac Is Still In Business Despite Their Service Failures 

Low Rates

OnTrac is currently the cheapest last-mile package delivery company and online retailers favor them to keep the shipping costs considerably low.

This has seen them grow so much as more and more huge and small brands alike keep coming to them. 

Their competitive pricing is the leading reason why they attract individual and e-commerce businesses to use them, making them stay afloat. 

Contracts and Partnerships with Major Brands

Surprisingly, huge brands such as Walmart, Shein, Nike, Adidas, Best Buy, Chewy, and Fashion Nova have started using OnTrac for packages heading to the Western side of the US. 

With many customers ordering from those companies and having their shipments sent via OnTrac, you can now see how they made an annual revenue of $400M.

Geographical Focus

OnTrac majorly serves the Western United States (36 states now and Washington DC). 

With this Geographical focus, they avoid direct competition that can be posed by major global package delivery companies such as UPS, FedEx, and USPS. 

Again, since they are a stronghold in these states, major brands prefer to work with them for a more tailored shipping experience. 

Low Operational Costs

Drivers keep on complaining on the OnTrac subreddit about how they were paid poorly until they had to resign and work elsewhere. 

According to Coding Questions 101, “ The job didn’t pay hourly but rather paid me $1.40 for every stop I did. I also had to pay for my own gas and drive an old beat-down white kidnapper van that the company provided. In the end, I was only making like $13 an hour after everything was said and done.”

Again, most of their drivers work as contractors, and this means there are no more benefits to get paid to them. 

With such poor pay, OnTrac keeps most of the profits, giving them the money to stay afloat. 

Also Read: Why Is OnTrac Delivery Company So Bad?

Epic Cooperation With Shippers

While OnTrac is in bad books with most of the recipients as reviews show, they have done their level best to stay in a contract with businesses. 

Let’s take the example of Tom expecting a package from Shein. When Tom looks at the tracking page, he might see OnTrac saying that the package was delivered even when it’s not there. 

Again, OnTrac might have even provided a photo proof with a scribbled signature as proof. 

Now, if Tom reaches out to OnTrac and tells them that he has no package, OnTrac will send him a photo as proof and the signature proof and refer him to Shein. 

That very time, OnTrac will send that proof to Shein and update them that they successfully delivered Tom’s package. 

As Tom reaches out to Shein, they will tell him that they have proof from OnTrac that his package was delivered and he signed for it. 

Basically, when the recipient has a complaint, OnTrac does its level best to clear their name with the companies they are contracted to. 

OnTrac’s cooperation with their contracted partners has made them stay in their good books, making their delivery business thrive. 

Also Read: OnTrac Says Delivered But There is No Package

KEY TAKEAWAYS

The main reasons why OnTrac is still in business are:

  • OnTrac offers the most affordable shipping rates, giving them a huge pool of customers
  • They make their operational costs low, leaving them with high profits 
  • They are strategically positioned, which makes them avoid direct competition from major package delivery companies 
  • They cooperate with their partners well, making them easy to work with from a client’s perspective
  • They are in active contracts with huge brands, leaving them with sufficient revenue to keep running.