Ultimately it’s about finding the right blend of shipping and delivery options that fit your customers’ needs.
Shippers fight a constant battle of finding the right carrier that will deliver packages to customers as efficiently and as cost effectively as possible. This becomes even more difficult as there are hundreds of viable carrier options. This increases the time it takes to identify the right carrier for every order, forcing many shippers to overlook the vast network of regional carriers available for the simplicity that comes with opting for a national carrier.
But what exactly classifies a carrier as regional? The main difference between a national and a regional carrier boils down to territories covered. Look at national carriers, such as FedEx, UPS or USPS – each has shipping routes that last up to a week long and can deliver anywhere within the continental United States. On the other hand, a regional carrier, like SpeeDee, OnTrac and LaserShip, will deliver across a state or small region of states at a typically lower cost. While there are five major regional carriers in the U.S., this group of carriers only covers 85% of the country, making national carriers vital.
Service levels are also a key differentiator between national and regional carriers. While national carriers offer many different shipping options, most regional carriers offer select service levels, such as “next day” delivery windows at lower costs and some economy services with longer delivery times. [Worksheet: Developing a Successful Last Mile Strategy]
Ultimately, it’s about finding the right blend of shipping and delivery options that fit your customers’ needs. Shippers that utilize both regional and national carriers are better able to meet customer demands and lower shipping costs. But before shippers begin using regional carriers, they must understand the pros and cons.
Regional carriers provide competitive pricing
Regional carriers generally have better rates than their national competitors for the areas they service.
Speed of service
Regional carriers work best for shippers with multiple distribution centers and a high concentration of customers within a geographical market. They also typically have wider time schedules for pick-up and delivery and often provide next-day deliveries.
Provide Lane-Level Redundancy to national carriers
During peak shipping season, national carriers may have particular lanes that are overloaded and unavailable. Shippers that already have contracts with regional carriers that service those lanes can have their shipping volume shifted and customers’ expectations can still be met.
There are many destinations in the West and the Midwest that are not covered by any regional carrier. Remember that even with a regional carrier strategy, you must be backed up by a national carrier.
Variety of services
Many regional carriers can have lower shipping costs by limiting the number of services they offer, often cutting down early AM services and postal last-mile solutions.
More relationships for your logistics managers to maintain
By adding more carriers, shippers are adding more relationships, more sets of rates to negotiate and another set of contracts to finalize. Make sure you have the resources and the right software to help manage this.
When it comes to shipping, meeting customer demands and saving on shipping costs are priorities. In order to do both, shippers must readjust their existing carrier networks accordingly. Adding both regional and national carriers to a shipper’s network can be the driving factor for success.
This article was published in the May/June 2019 issue of PARCEL on page 33. View the original.
Also in this PARCEL issue…
Shipping Software: A Roadmap to Success
The term “shipping software” can encompass so many things, and some shippers (especially those new to the industry) may find themselves overwhelmed with the options as they attempt to evaluate which products would help them optimize their small-parcel operation. From multi-carrier systems to labeling and documentation software, the options are endless – and valuable. Many articles in this issue have demonstrated how the right shipping software can take your shipping operation to the next level, but choosing the wrong software for your business could create significant roadblocks. Take a look at some of these solution providers listed here and reach out; they can get you on the right path.