Navigating the tricky world of carriers and carrier contracts is a beast in and of itself — never mind in 2021 amid historic volume capacities. As many shippers reconfigure their parcel strategy to meet these challenges, carrier diversification has emerged as a beneficial approach to parcel operations. Multi-sourcing your carriers can offer great benefits in resiliency, costs, shipping times and customer service.
To strategically partner with the right carriers, you’ll need to learn as much about your shipping profile and needs as possible. Carrier diversification isn’t the right fit for every business (particularly smaller ones), but in the right scenario, multi-sourcing allows you to gain capacity and optimize your transportation costs.
Avoid putting all your eggs in one basket
Carrier diversification can be a great way to add resilience to your supply chain amidst disruption. The volatile supply chain of the past 18 months has brought to light the serious operational risks that come with putting all your eggs in one basket. Major national carriers are, like any business, prone to disruption caused by weather events, strikes and other factors. In February of 2021, continued winter storm disruptions at FedEx’s Memphis hub caused shipping delays for weeks, much to the frustration of businesses and customers around the country. Businesses who relied on FedEx for 100% of their parcel operations found themselves paralyzed with no other outlets. For these reasons, spreading out your shipping volume to various carriers can aid in avoiding total standstills when disruption hits one part of the country.
Onboarding new carriers doesn’t have to be scary
There are some common misconceptions when it comes to onboarding new carriers. One is that onboarding new carriers will add complexity to your parcel operations. However, with the help of logistics experts and multi-carrier shipping software, this process can be quick and simple. A trusted partner can help you review and negotiate contracts while software takes on the work of onboarding. The process can take as little as a few days.
A second common myth is that there’s a ‘right time’ to introduce new carriers (i.e. once the pandemic is fully over, at the start of the fiscal year, right before peak season, etc.) On the contrary: there’s really no wrong time to invest in multi-sourcing (so long as it’s a good fit for your business). Single carrier and national carrier-only approaches are often not cutting it with today’s historic volume capacity, and many businesses are leaving money on the table as a result. To ease capacity constraints and congested shipping hubs, start utilizing a multi-sourcing parcel approach today.
Focus on customer service and relationship building
A common value proposition of smaller businesses vs. the big guys? Customer service and relationship building. Due to an onslaught of capacity limitations nowadays, it can be a challenge to get a phone call returned from overwhelmed national carriers. In these challenging times, regional carriers can give great customer service. They care about building relationships with their customers and looking at their unique profiles to make sure their needs are met.
Regional parcel carriers are still proving their reputation on the national stage with competitive offerings and reliable service. Kenco has a vetted network of thousands of regional carriers around the country that our customers leverage on a daily basis. Through these relationships, we can get customers onboarded quickly to glean the benefits of carrier diversification.
Key Takeaways
Multi-sourcing will not be an appropriate fit for all businesses, but where it makes sense, carrier diversification can offer great benefits when it comes to resiliency, costs, shipping times and customer service. Many shippers carry on with a “this is how it’s always been” attitude, but in today’s unprecedented times, it’s important to be open to making cost effective, results-driven changes to your parcel operations. Have questions? Bring them to a trusted 3PL partner like Kenco for help. We can help decide what’s right for your needs — from contract negotiation to implementation. Visit our Transportation Management and eCommerce and Fulfillment pages to learn more or speak with a professional to take the first step toward smarter parcel spend today.
