Save money, save time, and ensure delivery: multiple shipping carriers are essential in 2021.
When you purchase something online, what’s the first thing you do after you place the order? You track the package. Even though it can’t possibly be in transit to your home mere minutes after you click “buy,” excitement builds, and you probably memorize the estimated delivery date and time.
With the date and time in mind, you anxiously await your package’s arrival, which could manifest in three ways:
- Your package is early, and you’re elated. You make a note in your head to buy from the retailer again when you need fast shipping.
- Your package is on time, and you’re satisfied.
- Your package is late, and you’re frustrated.
Companies that sell online are probably hoping for outcomes one and two. But shipping delays can occur for any number of reasons, be it a global pandemic or a carrier strike, and that delay can turn what started as a great buying experience into a lost customer.
Adding to the threat: eCommerce sales accounted for more than 20% of total retail in 2020, up from 15% in 2019, which means many large carriers are now at capacity and turning away shipments from smaller retailers with very little notice.
Thankfully, there’s a solution. Multi-carrier shipping software makes it easy to leverage regional and last-mile carriers and choose the service that makes the most sense for each shipment, based on origin-destination, delivery timeframe, and any applicable business rules.
Three big reasons to invest in a multi-carrier solution are:
- To save money with regional carriers
- To save time with last-mile carriers
- To ensure on-time delivery when strikes, overcapacity, and peak seasons occur
By broadening your carrier network, packages are delivered on time, satisfying your customers and building brand loyalty.
Save Money with Regional Carriers
Partnering with regional carriers is a great way to save some extra money in shipping. Unlike giants in the industry, regional carriers don’t have to pay for the extras that come with being a nationwide or global company.
Some of these costs include:
- Truck fleet
- Global footprint
- Marketing initiatives
While you may not see these line items in your shipping costs, your rates may be higher because you’re funding a larger business.
In contrast, regional carriers are smaller businesses and local, which means they have fewer “extras.” For instance, regional carriers can usually offer next-day ground delivery within 400 miles of a shipment’s origin – often at a lower rate and with fewer surcharges than national carriers. In comparison, the next-day footprint of most national carriers’ ground service is only 200 miles. Other advantages include:
- Lower freight rates: Most regional carriers transport packages via truck hubs, which can be operated at a much lower cost than airfreight operations. As a result, regional carriers can often save customers 10% to 40% vs. UPS and FedEx pricing.
- Fewer surcharges: Many regional carriers do not assess the same delivery surcharges and fees charged by national carriers. Regional carriers may not charge for rural deliveries, for example, while national carrier charges can vary based on rural ZIP codes. Other regional carriers may not add a surcharge for weekend deliveries. Calculated over a year’s worth of shipments, the elimination of such surcharges can add up to thousands of dollars in savings.
- Improved negotiating power: Adding regional carriers to the mix places shippers in a better position to negotiate more competitive contracts with their national carriers. Regional carriers are likely to be more flexible to compete with the massive volume of business that national carriers draw from the market. Whether the volume of packages shipped is low or high, rates can still be negotiated, as some carriers seek to fill capacity in specific lanes and regions. Data on a shipper’s historical volumes will provide the carrier an idea of annual or seasonal volume, and rates can be adjusted accordingly.Similarly, fuel surcharges, general rate increase (GRI) caps, accessorial charges, and other fees can all be up for negotiation. In some cases, utilizing regional carriers can easily save large companies 30% on shipments.
Save Time with Last-Mile Carriers
Since COVID-19, it’s become evident that anything can be done online, including shipping most items to your doorstep. Companies are capitalizing on this e-commerce trend by presenting same-day or next-day delivery options for products such as groceries, toiletries, and other household items, along with their larger product offerings. Not surprising, large carriers on the receiving end of this surge are struggling to keep up, and shipments are delayed.
Fortunately, last-mile carriers can save the day (literally!) when it comes to on-time shipping, often delivering in a day what might take a national carrier two or more. This can be a huge advantage for shippers with many customers in certain geographic regions. For example, an online retailer in California with a high density of customers in metropolitan New York can save time and cut costs by using a less-than-truckload (LTL) carrier or airline to deliver its orders to a NY-based regional carrier – who then makes the last leg of customer deliveries. Efficiencies like this can help companies grow revenues by wooing new customers away from their competitors.
The good news is that with a multi-carrier solution, you can leverage both national and last-mile carriers, and the solution will advise you on when it’s more efficient to use each.
Ensure Delivery Even When Supply Chain Disruptions Occur
By this point, you may be realizing that relying on one shipping carrier isn’t the best way to streamline your processes. When you’re only using a single carrier, labor strikes, staffing shortages, and capacity challenges can all jeopardize your on-time shipping KPIs – not to mention the impact of peak seasons such as the holidays and back-to-school shopping.
When supply chain disruptions occur, a multi-carrier solution is a lifeline to logistics professionals seeking to rapidly increase their available shipping options to manage any issues that arise and deliver products to customers on time. The use of an advanced multi-carrier solution will increase agility and transcend supply chain boundaries during a supply chain disruption by providing shippers with the ability to quickly onboard, leverage, and optimize multiple carrier services, including regional and last mile providers, while producing the data and analytics necessary to understand where logistics performance is sub-par and uncover opportunities to increase savings and on-time delivery performance.
Multi-Carrier Shipping is Here to Stay
With customers’ need and want for convenience, the most important thing about the shipping process is timeliness. Fortunately, you can improve shipping efficiency and create delivery consistency by implementing a multi-carrier solution.
If you’re looking to learn more on how you can use multi-carrier shipping to increase efficiency, download our eCommerce Checklist for Peak Season.