There were $11.6 billion worth of online global consumer transactions between Jan. – Sept. 2019, according to analyst firm, DynamicAction. However, competitive pricing and other tactics means achieving profitability is even more challenging with estimated customer profitability falling 12 percent year-over-year.
In this environment, businesses look for ways to save. And, lowering fulfillment costs is usually top of the list. For small online businesses, the prices for parcel delivery have never been higher. Rate increases in 2019 for the big three were significant, but surcharges for oversized packages saw even larger increases.
Considering all the shipping options including LTL freight and other regional ground services is a way to save. For example, using LTL freight for shipments too big or expensive for parcel shipping could save over 50 percent in costs. Regional carriers can also offer real value.
Understanding when to consider other solutions besides parcel is key. For example:
- Consider LTL if the weight and dimensions of your package are on the edge of USPS, FedEx and UPS parcel size limits. Parcel size limits top out at between 70-150 lbs. and/or 108 inches in length depending on the carrier.
- If many packages are going to the same destination, LTL will often be cheaper than parcel.
- If flexible time in transit works for you, LTL can often save a lot of money. Some freight carriers offer time-in-transit commitments, especially the national carriers like UPS and FedEx.
- If you are competing against retailers that offer one-day and same-day delivery, adding a regional carrier options can help lessen their competitive advantage because regional carriers provide a much larger next-day Ground footprint, either in your region or especially combined with your 3PL services.
Offered as an LTL freight partner by many online parcel solutions, uShip is basically the eBay of the freight industry. The platform features a network of thousands of trucking companies and owner operators, who will bid for any ground shipping jobs posted. The “winner” is the lowest bidder, and who wins the contract to haul the freight.
Besides the risk of working with an unknown vendor, using a freight auction site means working outside of a company’s current parcel shipping solution making it challenging to seamlessly process shipments managed by other types of carriers. There could be difficulty scheduling deliveries, maintaining a single location to monitor shipments, and comparing these shipment options. For example, each regional carrier will be invoicing you separately causing administrative headaches. There is also the training issue involved with preparing your customer service and shipping departments to effectively utilize new carriers.
Another very important issue to address is integration. Specifically, how will you transmit the shipping data to the new carrier, and how will you create a label for the packages shipped with them? There are definite benefits when you add a multi-carrier solution. Every shipper should utilize some kind of multi-carrier system.
When evaluating the benefit of adding other carriers, the faster delivery speed of regional carriers should be considered. Competing against market leaders and larger distribution centers can be difficult. Today’s customers expect two-day, next-day, and even same-day delivery at no extra charge. Adding a regional carrier to your carrier mix can help address this advantage because the regional carriers often provide a much larger next-day Ground footprint, usually offering next-day Ground delivery more than 400 miles from your shipping location. In comparison, the next-day footprint of the national carrier’s Ground service is only 200 miles.
Having a multi-carrier shipping solution with parcel and includes regional carriers and LTL freight makes it easier to consider your options for shipments during the holidays. Some ecommerce shipping solution, like ShipRush, are now extending services beyond parcel to include LTL freight and some regional carrier support. Partnering with a freight broker and other technology partners, ShipRush offers shippers access to 100s LTL freight options or connect users to their own current regional carriers they have relationships with.
Cloud-based multi-carrier solutions can also offer searchable rate shopping for freight carriers using many cost criteria, and the ability compare results to a similar search of price/options with parcel. This is key since LTL freight rates can vary widely. The decision-making process can be made easier using automation rules to set up parameters for when to consider using LTL freight. A business can set up rules to ship via the lowest cost option, or the lowest cost for a certain delivery commitment.