Relying on Regional Parcel & Gig Economy Delivery Providers for Extra Capacity

When considering the numerous options that are available for shipping, two questions likely come to mind immediately: Why would a shipper use a regional carrier and how does one know when to make the switch? Comparing national to regional parcel shipping becomes more valuable considering peak season shipping 2021 is approaching rapidly. During peak season for shipping, the main objective on a customer's mind starts with, "how quickly can the package get here?" One of the worst alerts a customer can receive is a notification that a shipment or essential package en route with a national carrier has been delayed and the arrival time has been postponed by an infinite duration. By utilizing regional parcel service providers, these obstacles can become less troublesome and customers can remain satisfied and happy. In doing so, it's important to recognize the value of regional parcel and gig economy drivers, how they add value through providing more capacity, and why your strategy depends on this vital group of transportation service providers.

What Are Regional Parcel and Gig Economy Delivery Providers

Regional parcel and gig economy delivery providers have been gaining in popularity with shippers, despite being a smaller or lesser-known brand than established carriers. Rather than FedEx or UPS, which most customers use to meet their shipping needs, companies such as UDS and OnTrac have begun gaining a strong reputation for reliability, faster delivery times, and earlier or later pickup times. Their business models are designed with flexibility in mind, and they rely on a crowdsourced view of transportation. With regional and gig economies coming to parcel delivery, these shipping methods can provide the flexibility for same-day and even same-hour delivery in some cases, while national shipping companies cannot or would at least have trouble achieving those goals. Very well-known examples of gig economy delivery service providers include Postmates, Uber, DoorDash, and Shipt, all of which can be beneficial for delivering food and meals to customers. But the use of such companies to fulfill e-commerce package deliveries creates new challenges, including new data streams that need unification, new data to normalize and correct, and more high-quality information to make informed decisions.

How Do Regionals Work to Add Capacity?

Regionals add capacity by combining together into national strings of moves. As reported by The Wall Street Journal, "Regional parcel carriers are expanding their reach as surging e-commerce demand fills up capacity at the national carriers, and retailers seek fast, cheaper ways to ship packages to customers' homes." As regional parcel delivery services become more and more popular in the shipping industry, many regional carriers have started focusing on route optimization to maximize the density and minimize empty miles. With more than enough parcel volume to go around for national and regional shippers, and the growing number of packages traversing the U.S. every day, companies will continue to use regional services—provided those carriers meet established service levels and pricing remains manageable Of course, those advancements do little to help shippers if shippers cannot visualize and apply the data. That's why it's important to work with a business intelligence resource that can aggregate data from these companies as they grow and evolve, bringing everything into focus for shippers.

What Are the Benefits of Using Regional Parcel Carriers?

Thanks to a demonstrated ability to deliver consistently on a solid delivery promise, regional parcel shipping continues to gain favor. Another reason for the rising popularity: costs are becoming lower than national carriers, ranging anywhere from 10-40% less expensive. With the sound delivery promise from regional carriers, customizable pickup times and faster delivery often become offered due to higher concentration in such areas of expertise. Along with these benefits, regional carriers often have fewer touchpoints, typically meaning fewer damages, and the regionality of the routes also means fewer weather delays for shipments. Overall, regional parcel infrastructures are best built for one-day delivery, which can be beneficial during peak season, back to school, and the continued economic surge of fall/winter 2021.

When Should Shippers Choose to go Regional Over National?

When choosing a parcel shipping partner, shippers need to know the delivery objectives, the price of parcel shipping, and the promised delivery timeline. Staying up to date on the changing innovations in parcel delivery to understand new processes and delivery methods can also improve delivery efficiency. But it's using this data to look at shipment volume by origin and distribution center to determine if the shift from a national carrier to a regional parcel carrier can and should happen. Along with this determination, if there is enough volume to move, see which carriers operate in the region while considering discounts that may exist with the major carriers, including FedEx and UPS. Diverting bookings from national to regional parcels could affect pricing and contracts; incentives tend to decrease when the volumes decrease, which means the discount may discontinue due to bookings falling below a certain threshold.

Increase Capacity, and Leverage a Single Source of Truth for Logistics Data to Make Sense of Regional Data

As retailers demand faster, cheaper ways to ship packages to customers' homes, the need for regional parcel shipping, particularly in regards to finding capacity, will continue to accelerate. Evaluating delivery objectives, shipment volume, and deciding if shipment volume can move, will help determine whether regional parcel shipping is a viable option. If a shipper wants satisfied customers while providing same-day or even same-hour delivery, especially during peak season, it's well worth considering bringing regionals into your carrier mix. And of course, remember that more carriers mean more data to ingest, normalize and apply through actionable insights, which Intelligent Audit can provide. Connect with Intelligent Audit to get started today.