UPS and FedEx have made it clear with their general rate increases for 2022, that they don’t want all package volume. If your service needs don’t fit “nicely” into their networks, then you’re not the ideal shipper they want to work with.
Carriers are looking for perfectly shaped boxes (small and compact – think t-shirt or small jewelry) that are shipped to regions outside of residential areas.
Sound like you?
If not, then it’s time to start getting serious about all your carrier options.
You can’t just rely on national carriers to get your shipments to customers’ doors anymore. You may need a regional carrier, even if as a complementary solution.
But that doesn’t mean you can use these carriers as a last resort – they have their own limits and shipper capacity that you’ll want to get ahead of.
So it’s time to get serious! Fast.
What Are Regional Carriers?
The difference between a national carrier and a regional carrier is the geographical areas they service. National carriers are the big transportation companies in the country, like UPS and FedEx. (Shipping to 48 states)
Regional carriers cater to a more localized area – most offering services within 500 miles and even up to 1200 miles for second-day delivery service. They can also offer less-than-truckload (LTL) services for bulkier shipping. Some examples of these carriers are OnTrac and LaserShip.
Benefits of Regional Carriers
- Regional carriers have the advantage of a smaller geographic area, providing more custom solutions and direct routes that meet customers’ unique needs.
- Smaller delivery areas allow for extended pickup windows for customers later into the evening (sometimes up to 10 PM) – as well as overnight options.
Faster Delivery Times
- If you have clusters of customers within a specific geographic area, regional carriers could offer faster transit times to service them.
- Regional carriers are ideally suited for same-day delivery and eCommerce but can also provide a full profile of day-definite guaranteed services for shippers.
Less Complex Network and Enhanced Service Offering
- Unlike national carriers, regional service providers are not required to standardize their offerings. Allowing for a more personalized approach to your service needs.
- Regional carriers are not restricted to going through centralized hubs, making earlier availability for deliveries, and reducing weather-related delays.
- There are significantly fewer surcharges for regional carriers vs. national carriers.
- Regional carriers can offer lower minimums and rates.
- Using regional carriers to service large client clusters within a specific region reduces shipping spend for a bulk of shipments.
Improved Negotiating Power
- When you’re not dependent on national carriers to get all your shipments out, you can use them strategically and in a way that benefits both parties. Using regional carriers gives you more negotiating power in your carrier agreement.
Cons of Regional Carriers
You won’t be able to use regional carriers for all of your shipping needs. These carriers are there to help your shipping within specific geographic areas – they can’t service outside of it. They simply lack the capability and resources to provide service beyond their immediate area. Plus, many destinations in the west and midwest, are not covered by any regional carriers.
When to Use Regional Carriers
In comparison, national carriers have all the resources they need to service (most) customers. They have more drivers, a larger coverage area, advanced technology, and you guessed it – greater overhead. Making their costs much higher than that of regional carriers
When should you consider using a regional carrier over a national carrier? If you answer yes to any of these questions:
- Does your business have a small area of operation?
- Does your customer shipping data show that you have clusters within the same region?
- Do you have small order volumes that won’t benefit from wholesale discounts from national carriers?
- Are you looking for more personalized/luxury delivery options for your customers?
- Is your business seeking next and same-day delivery capabilities over small distances?
When should you use national carriers over regional carriers?
- Does your business have an extended market base that requires complex solutions?
- Do your required shipping routes cover large spans of the country?
Is There a Benefit to Using Both Carriers?
We call this the sweet spot of shipping. There are many advantages to using both types of carriers. In fact, regional carriers should be seen as complements to national carriers.
You can determine the right mix of carrier services for your business by using your data!
Your data holds information about where your customers are getting their shipments, which service mix best suits your needs (same-day, two-day delivery), and which line items to negotiate when signing a carrier agreement.
Sifted Logistics Intelligence
The good news is that you don’t have to go searching through your excel sheets to find these complex answers. Sifted is here to take the guesswork out and find you the shipping solutions you need.
Our logistics intelligence software provides you with a 360 view of your shipping profile to showcase what areas need improvement, identify new savings areas through historical and predictive analysis, and gain visibility into your transportation costs.
Let us help you determine the best carrier mix for your business – sign up for a free demo today!