By Mark Magill
Regular readers of this column know the many benefits of adding regional parcel carriers to their carrier mix. Not only can a shipper significantly reduce their shipping spend, get faster time in transit (including next day delivery at Ground Rates, but they can also increase their productivity by taking advantage of the later pick up times that regional parcel carriers routinely offer. But what does it require to implement a regional carrier, and is it worth the effort? By speaking with a representative of your local carrier, you will discover that it is a surprisingly easy undertaking.
Any change in your business will necessitate some degree of planning, time, and even expense. So you should always perform your due diligence in finding out what implementing a regional carrier will require. One of the most effective methods for doing that is to ask for a list of referrals from your local regional carrier. Ideally, they should come from a company in your industry who has been shipping with that particular regional carrier for some length of time. In addition to asking them how they implemented the regional carrier, ask them what specific benefits compelled them to make the change. You may be surprised at what you learn.
A step by step process for engaging the regional carrier should include providing them with few months of shipping data including package weights pieces per delivery stop and the five-digit delivery ZIP Code information for your shipments. This would enable the regional carrier to determine the true cost of servicing your account and enable them to be the most aggressive in their rate proposal. This cost to serve model is the same one that the national carriers use. When doing your analysis, be sure to include the savings your company would reap by being able to downgrade the shipping mode from Air Express to Ground service in Zone 4 delivery points where the regional carriers can deliver next day at Ground rates over 500 miles from their origin. The savings from this portion of your business can be especially significant. When you have completed the analysis based on the rates that the regional carrier is offering, it should be fairly easy to create a cost/ benefit analysis based on any soft costs you may incur and competitive advantages you receive.
The next step would be to determine how you will process your shipments. A regional carrier of any significant size has their own internally created shipping software that they would gladly supply along with a thermal label printer. But if you are a large shipper you are probably already using multi-carrier shipping software of some kind. The larger regional carriers often have shipping modules for those software providers or if need be can have generic modules created. (if they already do have modules, it is the closest thing to "plug and play" in the parcel shipping IT world). The regional carriers can also directly integrate with your own homegrown legacy system, via API, ODBC or even integrate with the very largest TMS systems.
Finally, having an available dock door is an issue that sometimes arises. The flexibility that is the hallmark of regional carriers can usually alleviate this issue. Since these carriers are by definition regional, they operate in a geographical space that allows them to provide later pick up times. Rather than having a dock door dedicated to them, they can arrange a pull time that occurs after the national carriers have already picked up.
Since DHL pulled out of the domestic shipping market four years ago, there has been a definite need for alternatives to the national carriers. In any industry, a limited number of choices does not best serve the market. It may be well worth your while to investigate the reduced expense and competitive advantages that the regional parcel carriers provide. Adding them to your carrier mix may be much easier than you think!