Carrier Diversification Is Decreasing Delivery Times

Data from Narvar confirm that increased carrier diversification is lowering delivery times, particularly during peak-order periods. As an example, look at how carrier diversification played a role in expediting fulfillment during the 2021 holiday season. 

The share of outbound package volume shipped by UPS, FedEx, and USPS declined in each of the last three years, while package volume increased with regional carriers (reducing average days in transit from 3.6 in 2019 to 2.8 in 2021). 

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"Retailers put a lot of emphasis on diversifying their carrier networks this year to ease supply chain capacity issues and improve last mile coverage," said David Morin, Sr. Director of Retail and Client Strategy at Narvar. 

And the result of that diversification, as David also noted, is a healthier delivery ecosystem and happier shoppers. 

Should you diversify your carrier mix?

As regional carriers represent an increasingly large segment of Narvar deliveries, is it time for your business to get onboard?—There are certainly advantages to doing so. 

According to Anisa Kumar, Narvar's Chief Customer Officer, "Tapping a mix of the Big 3–UPS, FedEx, and USPS–plus adding regional carriers helps retailers optimize for cost, transit time, and overall efficiency."

Even though the use case for regional carriers is compelling, there are several considerations to weigh prior to diversifying your delivery network.

Availability of regional carriers

If your business ships to all 50 U.S. states in relatively equal distribution, you’re in luck. You’ll have plenty of options to choose from when it comes to adding regional carriers to your shipping program. 

On the other hand, if your customers are more concentrated in a particular geographic area, your options for regional carriers will be more limited. In this case, you’ll want to consider not just the carrier’s availability, but also their services, delivery guarantees, safety ratings, technology quality, and reputation.

Existing contract requirements

As you explore engaging regional carriers, it’s also important to consider any volume minimums or other requirements that exist within your current contracts. 

If, for example, you regularly ship just over a minimum volume requirement you’ve set with UPS or FedEx, diluting your deliveries by adding regional carriers could put you below this threshold. And if this results in the loss of discount pricing, you’ll need to carefully weigh the benefits of adding regional services against the higher costs across your entire carrier network.

Your e-commerce technology stack

Adding more shipping options increases operational complexity when it comes to routing packages through each carrier you work with. 

Technology can do a lot of the heavy lifting here. But if you don’t have software in place that allows you to set up automation rules that choose between several carriers–or that lets your customers make their own selections–both your manual labor expenses and your risk of delays go up.

Your post-purchase customer experience

On a similar note, it’s important that any technology you use to manage deliveries ensures that your customers receive the same post-purchase tracking and delivery experience–no matter which carrier you ship through. 

In particular, look for carrier-agnostic platforms, which can streamline post-purchase tracking whether you’re shipping through UPS, Lasership, or any other national or regional carrier.

Carrier diversification—now is the time

If, after these and other considerations, you still believe diversifying your carrier mix is the right choice for your e-commerce business, now is the time to do it.

Adding regional carriers to your network now gives you plenty of time to research individual carriers, negotiate favorable contracts, deploy any necessary technology, and pressure test your process before 2022’s peak holiday shopping season arrives. 

Further, consider that, last year, regional carrier OnTrac stopped accepting new peak season business in September 2021. 

If demand for regional services continues in this way–and, based on our data, we have every reason to believe it will–taking the necessary action now ensures you’ll have access to the services needed to create a great post-purchase experience through the coming holiday season and beyond.