February 24, 2023
- Written By
Here's a not-so-easy pill to swallow: the ecommerce landscape has gotten a lot more challenging over the years. Inflation and supply chain problems will likely persist for the rest of 2023, and merchants need to be prepared.
These issues, coupled with consumers' rising expectations regarding shipping speed and costs, means brands must find ways to streamline their shipping practices. Doing so ensures they're fulfilling orders in the most efficient and cost-effective way possible.
Enter regional carriers.
When leveraged properly, regional carriers can help shippers be more competitive through lower rates and faster delivery times.
Regional carriers (aka regional parcel carriers) are shipping companies that only cover certain cities, states, or regions.
Regional carriers have denser, smaller networks and typically serve major metropolitan cities and suburbs around them. They're smaller, but since they have denser coverage, they can offer faster shipping services (usually 1-2 days) at lower rates.
The key difference between regional parcel carriers and national carriers is their shipping coverage. As mentioned above, regional carriers have smaller, denser networks and typically only deliver to specific cities and metropolitan areas. On the other hand, larger national carriers can ship packages from one end of the country to the other.
Because they focus on select areas, regionals may have a better understanding of the local market, which can be beneficial for businesses that want to target customers in specific regions.
In addition, regional carriers primarily offer fast ground services, while large national carriers also ship via air, which drives up their costs.
And because they have a smaller footprint, regionals usually have speedier delivery services. With a few exceptions, regional carriers ship and deliver in one to two days.
Because of this, it can be very beneficial to work with regional parcel carriers vs. national carriers. With their specialized services, regional parcel carriers can help businesses save time and money while ensuring their shipments arrive on time and in good condition.
Shippers have varying needs and requirements, so it's impossible to give a one size fits all guideline or percentage around the savings you'll see working with regional parcel carriers. Based on what we've seen, however, regionals are almost always more cost-effective than their larger counterparts.
Here's a hypothetical example showing the costs of shipping a package weighing 1lb from Los Angeles to San Francisco. These figures were retrieved from the shipping cost estimators of UPS, FedEx, USPS, and the regional carrier OnTrac.
As you can see, the regional parcel carrier OnTrac offers the most bang for your buck, as it can ship the item for $19.51 in 1 day. While USPS is technically cheaper at $17.10, the transit time is longer.
If you're intrigued by the idea of working with regional carriers, here are the signs your business is a good fit.
If you're implementing multi-node fulfillment with strategically-placed facilities, then working with regional carriers may give you an advantage when it comes to speed and costs.
You can assign each fulfillment center to the appropriate carrier and have that provider serve areas within that region. In doing so, you're able to reduce costs (because of lower transportation and shipping fees) and speed up deliveries because your carriers are focused on specific areas.
While UPS, FedEx, and USPS often offer volume discounts to shippers, not everyone qualifies for them. Regional carriers typically have lower minimums and eligibility criteria for volume discounts, so they're worth looking into if your current shipping volume doesn't meet national carriers' discount requirements.
One leg up that regional carriers have over national carriers is the former's ability to provide extra services.
Carriers like Lone Star, Lasership and Spee-Dee offer customized delivery and on-call services. Meanwhile, providers like CDL have retail home delivery and assembly. So if you ship items that require special handling and services, consider partnering with regional parcel carriers.
While regional carriers certainly offer several benefits, there are potential drawbacks to working with them.
One of the primary issues merchants may have about working with regionals is managing multiple carrier relationships. Rather than working with one primary carrier that ships everywhere (e.g., UPS), you'll coordinate with different parties depending on the area.
Naturally, this adds another layer of complexity to your shipping processes. And given that many companies are already strapped for time and resources, the idea of juggling multiple carrier relationships isn't very appealing.
How to overcome it:
You can overcome the complexity of regional carrier relationships by choosing a strategic logistics partner such as Tusk. Tusk Logistics enables you to work with multiple regional parcel carriers using just one platform. So rather than manually assigning orders to different carriers, you can use Tusk's technology to manage everything.
Tusk integrates with shipping solutions like ShipStation to make this process easy. Let's say you have multiple orders that need to be shipped to different states across the U.S. Instead of setting up different regional carriers for each location, you can use the Tusk to print all the necessary labels and ensure orders are routed correctly.
Regional carrier technologies may not be as advanced as those used by UPS, FedEx, and USPS. As such, when issues arise or shipments fall through the cracks, it may be more difficult to resolve them.
In addition, some regional carriers don't integrate with 3PLs and other shipping platforms, so it can be harder to manage orders handled by regionals.
How to overcome it:
Having a provider like Tusk helps ensure a smoother experience as you work with regional carriers. We offer proactive support by monitoring shipments and status updates to catch issues before they escalate.
For example, if a parcel hasn't moved in a certain amount of time, the Tusk team can quickly coordinate with the regional carrier to get to the bottom of the issue.
If you already have pre-negotiated rates and discounts with major carriers, then adding regionals to the mix may make you ineligible for those discounts. Since carriers typically require you to hit a set order volume threshold, diverting some of your shipments to regional providers could lead to lesser volume.
How to overcome it:
You can sidestep this issue by working with solution providers with pre-negotiated rates and relationships. Take, for example, ShipStation, which can extend exclusive rates to its shippers.
According to its website, ShipStation users can benefit from the following discounts:
And suppose you do decide to work with regional parcel carriers. In that case, Tusk has pre-negotiated pricing from top-tier regional carriers to help you reduce shipping spend and decrease transit time.
Interested in learning more about how Tusk Logistics can help you unlock cost savings and efficiencies through regional carriers? Get in touch today. Tusk integrates with leading platforms like ShipStation to simplify your order fulfillment processes and make shipping as streamlined and cost-effective as possible.