The 2012 PARCEL Forum will shine the spotlight on regional parcel carriers with multiple themed tracks and educational sessions. The regional carriers advertise many benefits over the national carriers including cost savings, greater service options including same day delivery, and custom/specialized solutions. Is your business a candidate for regional carrier services?
To better understand the regional carrier market, its advantages and potential disadvantages as well as shipper’s experiences using regional carriers, the PARCEL team once again partnered with the parcel industry experts at Shipware. PARCEL will publish the results of the “2012 Shipper’s Survey on Regional Parcel Carrier Usage” in the October edition, and Shipware will unveil survey results at the Parcel Forum.
Here’s a teaser, but look for the full results at the PARCEL Forum and in the September/October issue of PARCEL.
Like the name implies, regional carriers serve a specific region within the U.S. offering reliable package delivery services similar to FedEx and UPS. Regional carriers such as Eastern Connection, Lone Star Overnight, OnTrac, Spee-Dee Delivery and Pitt-Ohio cover more than 80% of the U.S. population and specialize in short-haul delivery (typically up to 500 miles). (To view the OnTrac Service Area, click here.)
Regional carriers can offer cost savings of 10% to 40% over UPS and FedEx pricing. As an example, Spee-Dee Delivery’s pricing starts at $3.79 for next-day delivery of a 1-pound package within Zone 2. Compared with UPS and FedEx’s minimum charge of $5.49, shippers would save 31%.
Since regionals concentrate operations in a well-defined geographic market, service to that market is often better than what the national carriers provide. For example, Eastern Connection handles East Coast deliveries from Maine to Virginia, all included as “next day” delivery points. Using FedEx and UPS Ground service, the same coverage area extends to five zones for 1-4 day delivery.
Survey respondents listed the following responses as “benefits realized to regional carrier usage”: Larger next day delivery footprint; Better service than nationals; Cost savings; Fewer surcharges; Better billing terms; Better sales rep; Improved reporting; Better dimensional divisor; Better or no minimum charge; Improved customer service; Specialized/Custom solutions; and Same day options.
Despite the many advantages, shippers are largely unaware these carriers exist. Only 39% of survey respondents reported using regional carriers, and two-thirds of that group ship less than 5% of their overall volume via regionals.
Are there any downsides to shifting parcels away from national carriers in favor of regional carriers? Is service up to par? What about customer service, caliber of the driver, automation, reporting and tracking? And just how much are the reported cost savings?
The complete survey results will reveal opportunities for shippers as well as potential mistakes to avoid. Again, look for the full results in the September/October issue of PARCEL. See you at the PARCEL Forum!
Rob Martinez, DLP is President & CEO of Shipware LLC, a parcel auditing and consulting company based in San Diego, CA. He welcomes questions and comments and can be reached at [email protected].