The transportation landscape has been shifting drastically of late. The rising price of oil, inflation, pandemic, a war: it can feel like everything is happening at once. As we’ve seen recently, large e-commerce businesses have been turning to acquisitions to take control of their supply chains and parcel distribution, but where does that leave the SMBs? Today we’re explaining how to multi-source transportation solutions for small and medium-sized businesses that want a firmer grasp on their distribution strategy.
Firstly, when we say small and medium-sized businesses we mean a range of up to about $3 million in small parcel spend annually—it may not be a lot in comparison with the big shippers but those are real dollars being spent. So, if you’re spending anywhere in that range, what are the carrier options out there?
When you hear the term “carrier” the first companies you think of are probably UPS and FedEx, and you’re not wrong to think of them. You likely see trucks with their logos multiple times a day and they’ve been around for a long time. They both do a great job, but there are also other carriers trying to break into the national market, like DHL and Maersk. The USPS is another valuable national option, particularly for small and lightweight packages.
Regional carriers can play a valuable role in your distribution strategy as a SMB. A regional carrier is just that: regional, meaning that they only offer their services in a specific geographic area. Examples of regional carriers include OnTrac and LaserShip, who recently joined forces through an acquisition, leaving them capable of delivering packages on both the east and west coast. As regional carriers don’t deliver nationwide, you need to be sure to carefully vet where they operate in relation to your distribution centers if you’re considering picking a regional solution.
Diversifying Your Carrier Mix
While you may already have been aware of the existence of all these different carriers, the hardest part is figuring out how to work with multiple of them at once. The advantages to working with multiple carriers include fostering reliability and saving money, but there are plenty of factors to consider as you go about it. How do you figure out which carrier is the best match for which geographic areas? How do you avoid stepping on toes as you work with multiple carriers in tandem?
It all comes down to being sure you have the right data so you can make informed decisions and adjust as your strategy changes. To get that data you can look to a 3PL, a firm, or to software, like a TMS, and, in many instances, the best option would be to use a combination of several of these resources. Visibility through data is the best way to take factors into account like your package characteristics, geographic locations of distribution centers and customers, carrier prices, and much more.
If this all sounds like a lot, have no fear! It is more than possible to succeed in establishing a viable transportation solution that includes multi-sourcing and is adaptable to the world’s circumstances.