The Rise of Regional Carriers
Within the ecommerce and DTC shipping space, a quiet revolution is afoot. While many brands rely on major national carriers—UPS, FedEx, USPS and, more recently, Amazon—a new wave of regional carriers is disrupting the status quo. Given the potential benefits, this development could result in a fundamental transformation, reshaping how ecommerce brands approach their shipping strategies.
A Brief History of Regional Shipping Carriers
Historically, the major national carriers have controlled the movement of consumer-bound packages across the country. As Amazon delivery trucks took over the roadways, a new (potentially faster and more cost-effective) option was available to brands. The next step in the evolution involves a growing network of regional carriers set to deliver more competitive pricing, faster local delivery times and enhanced flexibility. Some smaller carriers serving only a specific region of the US have shown significant growth in recent years:
- OnTrac is a West-Coast regional carrier that claims to offer a 1.9-day reduction in delivery time to customers; 10-35% savings over national carriers; and 98%+ average on-time service performance.
- CDL Last Mile Solutions has served the East Coast for nearly 75 years as a trucking and messenger service but has recently evolved into a “premier regional carrier from the Northeast to the Mid-Atlantic.”
- United Delivery Service is a Midwest regional parcel carrier that offers guarantees on same-day and next-day shipping services.
- Lone Star Overnight touts itself as “the South’s premier regional parcel carrier” that “combines the speed of a courier, the discipline of a carrier and the service of a true partner.”
The success of these carriers is evident. OnTrac, for example, was purchased by LaserShip (another regional parcel delivery company) in a deal worth $1.3 billion.
Europe, logistics experts say, may be the blueprint for regional carrier success: In the UK, for instance, carriers offer faster delivery times at significantly lower costs (sometimes half) thanks to a heavier reliance on regional carriers.
The Economics of Regional Shipping: Complementing Your Carrier Mix
One of the most compelling arguments for incorporating regional carriers lies in their potential for cost optimization. Regional carriers can save ecommerce brands as much as 40% over national carriers in some instances. Especially for brands that are growing and experiencing higher shipping volume, this can have a huge impact on the bottom line.
But the benefits go far beyond just cost:
Speed
Regional carriers close to fulfillment centers can get packages to consumers faster by sheer nimbleness and proximity. They also have a deeper understanding of local areas, which can result in more efficient coverage within that region. Regional carriers are more likely to stand behind guarantees of same-day and next-day delivery, a key in reducing logistics-related frustration for both brands and consumers.
Value-added Service
Many regional carriers provide specialized services that larger carriers may not, such as premium handling for high-value items. The customer service may have an edge, too—since many of these regional carriers are independent businesses with a track record of gold-star service. With smaller customer bases and more focused operations, regional carriers often provide more personalized service and faster response times.
Building a Comprehensive Multi-Carrier Approach
The emergence of viable regional carriers has opened new possibilities for DTC brands to create sophisticated shipping strategies. Rather than relying on a single carrier relationship, forward-thinking brands are building diverse carrier portfolios that leverage the unique strengths of different providers.
Integrating Regional Carriers Into Your Shipping Mix
Are regional carriers right for your brand? Keep these considerations in mind:
- The right partner can help you leverage regional carriers. Before integrating regional carriers, you’ll want to have an expert logistics partner in your corner. Good 3PLs are instrumental in helping you find—and maintain—the right mix of regional and national carriers to optimize costs and customer experience. They can also make it much easier to get connected to and integrated with regional carriers to eliminate the complexity that comes with multiple carrier accounts.
- Keep shipping trends in mind. As mentioned, there is a right mix of carriers for you. If you do a large volume of shipping within a certain zone and want faster and cheaper rates, regional carriers may be the way to go. But keep in mind that regional carriers may not cover all areas, or might not make sense based on how far you’re shipping. In that case, you’ll likely need to supplement with national carriers.
- Consider your must-haves. If offering same-day shipping to customers is important, regional carriers can make it happen. Consider the shipping needs of your brand and assess carriers accordingly.
- Vet regional carriers. Like national carriers, regional carriers aren’t immune to mistakes and service slip-ups. Unlike the big four, however, some new regional carriers are more of a gamble in terms of longevity. This is where a trusted 3PL comes in—they can help point you in the direction of the most reliable regionals.
Looking Ahead: The Future of Regional Shipping
The trend toward regional carriers is expected to accelerate—giving shippers a more diverse range of reliable options. Brands that thoughtfully integrate regional carriers into their shipping strategy will find themselves better positioned to compete in an increasingly crowded ecommerce landscape.
But as with anything in the complex logistics landscape, regional carriers are not a silver bullet for savings and customer satisfaction. You’ll need the right carrier mix, and the right partners—perfectly personalized to your brand’s unique shipping profile.
ShipTrac—and our network of leading 3PL partners—can help. We’ll complete a free shipping assessment to determine how much you could save with the right mix of regional and national carriers. Then, we connect you with the country’s best 3PLs—owner-operators who go above and beyond to help you succeed. Contact us today to learn more!
