Regional parcel delivery is a significant share of the global logistics market. According to McKinsey & Company, “The cost of global parcel delivery, excluding pickup, line-haul, and sorting, amounts to ~ EUR 70 billion, with China, Germany, and the United States accounting for more than 40% of the market.” With the rising burden of e-commerce, finding a way to rapidly expand your strategy to include regional parcel carriers and their networks is essential. Let’s take a closer look at the challenges of working with freight shipping and carrier networks, how diversifying with regional parcel carriers can help, and a few steps to keeping parcel spend under control.
The Costs of a Limited Parcel Network
As noted by Supply Chain Dive, parcel managers and carriers have reported that over the past 12-36 months shipper demand has shifted toward regional services after larger shippers began limiting parcel volume and supply chain capacity. Volume caps imposed by some of the larger parcel carriers are leaving smaller shippers looking for alternatives. Many shippers were already taking steps toward working with regional parcel carriers, but the volume caps are now making it a necessity to simply maintain throughput.
The move toward regional parcel carriers enhances existing last-mile capacity options. It can carry smaller shippers and help pick up excess capacity limits to current parcel networks. Regional carriers offer competitive delivery times in the 1-2 day range utilizing their ground network, allowing you to meet service levels. Overcoming disruption and expenses incurred due to limits of capacity comes down to expanding regional carrier options. Thus, shippers can take advantage of every opportunity to expand reach and secure more capacity.
Regional Parcel Carriers Open Doors to Additional Capacity
Today, regional parcel carriers make up approximately 8% of the overall parcel market in the U.S. However, diversifying your parcel network can add evenmore capacity. Adding regional carriers and incorporating innovative data solutions is an excellent strategy to drive supply chain efficiencies while also controlling operational costs. Saving time and money remains the primary goal of SCM system integration, shipping analytics, and carrier collaborations. Through modernization and superiority, regional parcel delivery companies can enjoy the win-win situation of improved capacity and enhanced profits throughout the supply chain network. Regional carriers deliver advantages to companies that can capitalize on the additional capacity.
Best Practices to Keeping Parcel Spend Under Control
To maximize the benefits of regional parcel carriers and to keep parcel spend at a reasonable and manageable level, implement these critical steps:
- Track performance of parcel carriers with real-time data and robust analysis.
- Pre-audit parcel invoices to reduce delays and avoid disagreements about rates and fees after delivery; plus smaller carriers tend to have fewer accessorials too.
- Ask regional carriers about their fees. Often regional carriers offer limited accessorial fees compared to large national carriers making for a reduced total cost of delivery.
- Optimize the use of regional parcel carriers through data analysis to identify opportunities for improvement.
- Leverage zone-skipping capabilities to lower parcel spend and expedite delivery timelines.
- Monitor overall costs and volume with real-time tracking to know when to utilize regional parcel carriers.
- Leverage the “expertise” of regional parcel carriers and their unique, “sound delivery promise,” reports Supply Chain Dive.
- Use technology to Identify savings utilizing “what if” scenarios. Through an advanced analytics platform, the shipper can ingest, cleanse, and normalize historical data to identify the new net rates, including any line haul costs into the regional hubs.
- Expand that “what-if” scenario planning into a multi-regional network optimization strategy. Ongoing optimization, using data-driven technology, allows companies to stay competitive and increase profits by decreasing the bottom line while still providing you customers with a good experience.
Managing costs and transportation spend is a critical part of success and growth, especially considering the tumultuous market landscape of today. Actionable steps yield the best results and help keep the entire shipping industry headed in the right direction.
Deploy the Right Analytics Solution to Maximize Use of Regional Parcel Carriers
Exceptional times call for extraordinary measures, and today’s transportation industry has never been more uncertain and fluid. Adapting to the new standard and aligning carrier services with consumer needs and demands proves time and time again to be essential to growth and survival today. Partnering with regional parcel carriers and implementing the right data collecting, cleansing, and analytics can help powerfully elevate shippers with more parcel capacity. Request a consultation with Intelligent Audit to get started.