By Stephanie Martin
KEY FACTORS TO MULTIPLE SOURCING WITH REGIONAL CARRIERS
any things have changed in the past year, but one thing that is constant has been rising shipping costs. With today’s current market, the addition of more peak surcharges, decreased delivery performance, and new capacity limits, the environment seems to favor the major carriers. With that being said, we are seeing more shippers who are looking for options to level the playing field and showing more interest in utilizing regional carriers. When implemented correctly, using multiple sourcing between major and regional carriers can allow shippers to gain greater control of their shipping strategies, increase package volume flexibility, improve transit times, and lower shipping
expenditures. On page 20, we discussed how to decide whether or not a multi-carrier strategy was right for you, and this article will continue the conversation by showing how to successfully integrate regional carriers into your carrier base if that is the direction you decided to go. Getting Started There are a number of key considerations, including geographical reach, delivery coverage, transit times, delivery performance, and pickups that must meet your company’s requirements. Additionally, you will want to check for shipment limitations that the major carriers may not have, such as weight limits of 50 pounds, dimensions over a certain size, prohibited items, and oversize or non-machinable packages.
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The next step is to dive into shipping rates, both base rates and surcharges. Regional carriers may offer competitive shipment rates with fewer and lower surcharges than the major carriers. Unlike the major carriers, some of the regional carriers do not have fees for commercial signature confirmation, daily pickup fees, and audit fees. Regional carriers typically also offer lower surcharges in commonly used areas like residential surcharge, additional handling, declared value, and delivery area surcharges. Secondly, they may also have better transit times within their unique network and may be able to deliver your shipments faster and at a lower cost. There are additional benefits offered with regionals, such as late ground pickups, better DIM divisors, expanded next-day ground deliveries, service flexibility, and more personalized customer service (just to name a few). A final consideration is to see how incorporating a regional carrier is going to impact the overall spend with your primary carrier. Begin by reviewing your existing agreement for volume commitments and potential penalties. Look to see if your current discounts are up front or if they are linked to your portfolio tier/earned discounts. As a matter of practice, most
PARCEL September/October 2021