March 24, 2023
- Written By
Despite the growth of ecommerce and consumers increasingly preferring to shop online, most online merchants aren't exactly swimming in cash.
Industry data shows that while online retailers have a decent gross margin of 41.5%, their average net margin sits at around 7.3%.
Profits are tight in the realm of ecommerce, which is why it's crucial to continually find ways to be more cost-effective.
One way to do this is to evaluate key business vendors, such as your shipping carriers. You likely spend a significant amount fulfilling and shipping orders, so it makes sense to take a closer look at your providers and see if you can reduce costs.
Regional parcel carriers typically offer lower fees than national carriers (as often as 40% lower in many cases), and they have a smaller coverage area, which can lead to faster and more reliable delivery times.
That said, finding the right regional parcel carriers to work with can take time and effort, and there are a number of factors to consider, including:
In this article, we'll explore these factors in detail and provide action steps on how to select suitable regional parcel carriers for your ecommerce business.
Specifically, we'll cover the following steps:
While regional carriers may offer faster and cheaper services than national carriers, they have limited coverage in certain regions. Some providers, for example, only ship to residential or urban areas. Others have a specific list of zip codes that they serve.
Another consideration is the carrier's network of distribution centers. You'll want to work with a vendor with a robust distribution hub network, as this can help ensure faster delivery times and more reliable service.
So, before selecting a regional carrier, look into their service areas and see to it that they can deliver to all the locations where you have customers.
Gaining the coverage list from a carrier—i.e., a list of zip codes they ship to—is critical because you can match that up with your own data of where you're already shipping orders.
Getting your hands on that information can be as easy as looking at the regional parcel carrier's website. GLS, for example, has a section on its website showing the areas it ships to. You can also contact the carrier directly to get the info you need.
Another option is to work with a provider like Tusk Logistics, which has a shipping network of regional carriers. Just give us your shipping destinations, and we'll cross-reference our network to identify which regions we serve. This enables you to tap into multiple regional carriers and centralize everything on our platform.
While regional carriers generally offer lower fees than national carriers, rates can vary significantly between vendors. You need to compare pricing carefully to maximize your savings. Consider all of the fees and surcharges associated with the carrier's services—including fuel surcharges, residential delivery fees, and dimensional weight charges, among others.
To get a clear picture of their rates, request a quote from the carrier, then compare their rates to the prices you're paying.
This process will vary, depending on your order fulfillment processes and the platforms you're using. Some shippers, for example, compile their data into a spreadsheet and conduct their own analysis.
Tusk makes this task a lot easier. When you provide your parcel data, we can break it down in a transparent and easy to consume report that shows the areas we can help cover and how much you can save.
You only want to work with regional carriers with a successful track record, so always ask for their performance data. These can include metrics like:
All that data can help you gauge a carrier's reliability and efficiency. If their delivery rate is subpar, you likely wouldn't want to work with them.
As for how to access that information? Some companies have their metrics on their website. CDL, for instance, displays its on-time performance rating of 98% on its services page.
If you can't find the info on their public-facing assets, call or email the providers you're considering and ask them for their most recent performance data.
And to cover all your bases, it's a good idea to research the carrier's reputation and customer reviews. This can provide valuable insights into the vendor's overall performance and any potential issues or concerns to be aware of. Websites like G2 and Yelp are great places to start.
While lower rates and faster delivery times are essential, they don't mean much if you can't get the help you need when issues arise.
Good customer support should be available when you need it, whether it's to track a package, resolve a delivery issue, or address any other concerns.
In an ideal world, the carriers you're using all offer multiple channels for customer support, including phone, email, and chat.
In reality, however, customer support offerings can vary widely, depending on the carrier.
There are a lot of carrier-specific processes, and you may need to contact different people depending on your issue. Some companies may prefer to communicate via email, while others can do it via Slack.
So, if you're working with multiple regional carriers, take note of their support channels and processes. Doing so will help ensure you can contact the right people and resolve your issues quickly.
That being said, you can also choose to work with Tusk Logistics, which centralizes all those carrier relationships for you. One of the things we do best at Tusk is removing the complexity so that shippers like you have one point of contact for multiple carriers.
See to it that your regional parcel carriers "play nice" with your existing systems and tools. This can include your ecommerce software (like Shopify) and fulfillment platform (like Deposco).
Also, remember that not all integrations are created equal. Some carriers may offer basic integrations and sync a limited number of data points, while others are more advanced and enable you to print labels and track packages.
Again, each carrier is different, so have those detailed conversations with your vendors to determine the level and quality of their integrations. Do they have a direct API? How do you connect to their platform? These are just some of the questions you should be asking.
Pro tip: It's easier to stay on top of multiple carrier integrations with a solution like Tusk, which keeps everything on one user-friendly platform—no new software or coding required. Tusk streamlines your workflows and eliminates manual work by integrating with leading shipping software like ShipStation, Deposco, and ShipEngine.
Some carriers have additional services or features such as white glove delivery, assembly, or specialized packaging.
While these things aren't necessarily "make or break" factors when choosing a regional carrier, they're certainly nice to have, especially if you're selling specialized items.
White glove service isn't an expected feature, but it's good to know if a carrier offers it. If you’re selling furniture, for instance, you’d want to know which carriers offer installation versus those that don't.
By selecting a regional parcel carrier that offers additional offerings, you can provide a better customer experience and improve the overall efficiency and effectiveness of your shipping and delivery processes.
Pro tip: Tusk doesn’t just consolidate your carrier relationships; we also offer proactive support to catch issues early or prevent them altogether. We actively monitor your shipments and preemptively connect with carriers if we spot potential issues. In doing so, we help prevent delays and ensure prompt and smooth deliveries.
Regional parcel carriers often offer more shipper-friendly rates that allow you to lower costs and ultimately improve your bottom line. The main drawback, however, is the tedious task of working with multiple carriers.
Since regionals have limited coverage, you'd need to work with multiple providers in order to ship nationwide.
This is where Tusk Logistics comes in.
Tusk gives you the unique advantage of working with multiple regional parcel carriers through one streamlined platform, eliminating the need for manual order assignments. Our platform seamlessly integrates with solutions like ShipStation, ShipEngine, and Deposco, making the process of printing labels and routing orders to different states across the U.S. an effortless one.
By utilizing Tusk's features, you can consolidate and streamline your shipping operations so that all orders are accurately routed and delivered on time.
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