While a nationwide shipping network is important for many companies, it’s not always the most efficient or cost-effective transportation management strategy to maintain. RateLinx’s ShipLinx TMS software is flexible enough to help grow your company’s shipping footprint by integrating regional carriers into your overall strategy to improve performance and save money. Let’s take a closer look at some of the advantages and challenges of using this strategy.

E-Commerce and the Growth of Regional Parcel Carriers

As any company that runs a significant freight or shipping operation knows, e-commerce has completely changed our industry and the expectations of our customers. In addition to increasing the volume of small parcel shipping, services like Amazon Prime have raised customers’ expectations about how fast they get their package and their ability to track it in real-time.

E-commerce and the new business environment that comes with it are driving more shippers to use regional parcel carriers. Rather than building and staffing distribution centers on the coasts, shippers are using the regional parcel carrier’s terminal as a pool-point for parcel. The volume of packages that are being shipped in a regional parcel carrier’s footprint is making it advantageous in terms of customer service’ and more competitive in terms of cost to line-haul the packages to the carrier’s terminal for distribution.

Advantages

Used as a part of a data-driven transportation management system and shipping strategy, the strategic use of regional parcel carriers can have important advantages for your company.

  • Regional parcel carriers offer improved service at competitive prices. That’s a win-win.
  • Strategic, simple shipping. We often see shippers line-hauling a full truckload to a strategically located regional parcel carrier’s terminal to take advantage of the simple fee structure.
  • Excellent service, next-day delivery. The large next-day service area many regional parcel carriers offer for their ground shipping provides the shipper with excellent overall transit time.
  • Regional parcel carriers are a great option for the shipments that are receiving dimensional weight, residential delivery surcharges or are outside the one-day delivery area (via ground) for the national players.

Challenges

While using regional parcel carriers to handle parts of your freight operations can pay off big both in terms of cost savings and improved service, it’s not without its pitfall, which usually occurs when trying to use inflexible or outdated TMS and parcel software.

In my experience, the biggest challenge to using a regional parcel carrier is getting the RPC integrated with the shipper’s technology. I’ve talked with many regional parcel carriers who told me that they put in pricing for a company, then waited 6 months to a year to get the carrier module turned on or added to the shipper’s TMS or shipping system. I’ve even heard of it never happening at all. Often times, the potential savings were huge (in the millions), but the regional parcel carriers were not able to get their technology integrated into a shipper’s process or system.

Effective Integration

To effectively integrate regional parcel carriers into your freight strategy, you need TMS and parcel software that’s fast, flexible and provides you with real-time shipping intelligence to ensure you’re optimizing your freight spend.

With our ShipLinx family of products, we are able to rapidly deploy a regional parcel carrier into your system. More importantly, we add the decision-making logic that is required to not only choose the regional parcel carrier but also create the line-haul shipment. Then, by using Intelligent Invoice Management (which is part of our Enterprise Suite) the shipper has visibility into its shipments from end-to-end using the Dashboard, and can also view the cost-savings associated with the use of regional parcel carriers through the Dashboard’s real-time KPIs.

I know it works because I’ve seen it in action. Our most recent implementation of a regional parcel carrier was for one of our large e-commerce customers. They wanted a better way to deliver their smaller residential shipments, so they added a regional parcel carrier. We had the carrier up and running in a week and the only reason it took that long was that one of the services being used required the label to get approved by the Post Office. The regional parcel carrier’s labels were approved in a day, the carrier module was added and set up in a few hours and we didn’t require any involvement from the customer’s IT department to complete the project.

Regional parcel carriers can play an important part in your overall freight management strategy, improving delivery times while saving you money. It’s worked for our customers and it will work for you. Please contact us if you’re interested in how RateLinx can help your company start using regional parcel carriers.