Carrier Diversity – Pricing in the Parcel Delivery Industry?

Today, the competitive marketplace for delivery is improving, although most shippers are still held hostage by their lack of knowledge, carrier diversity, and negotiating fortitude. This article is part 2 continuation of a 3-part series and will focus on the reasons for Increasing your carrier diversity.

Carrier Diversity: are you only using 1 carrier for parcel deliveries? Or do you have multiple AND DIVERSE carriers that bring you benefits of specialization and competition? Let’s look at this.

What are the goals you have for your company and for your customers’ deliveries? Usually those goals center around concepts of: price, logistics, transit time, frequency, and branding.

These concepts depend heavily on your distribution model, location, and carrier availability.

If you need the lowest price—because the product you are shipping to customers is a lightweight, low margin, commodity—then having a Mail-Share service—like UPS SurePost, FedEx SmartPost, OnTrac DirectPost or others, makes a lot of sense to explore.

If you need International logistics because your customers are outside the country, then one of your carriers should specialize in International shipping. If you have only one Distribution Center to cover the entire US, then one of your carriers probably must be a National Carrier.

The next 3 concepts of transit time, frequency and branding are often the most overlooked and offer opportunities to capture advantages and give customers what they really want and need.

If your customers value transit time, you should explore the Regional and Local Delivery Companies. They often offer service that can reduce a transit day to your customers by Ground.

If your customers value frequency, meaning daily shipments, weekend shipments, or even same-day delivery, then a Local Delivery Company makes the most sense if you have Distribution near major delivery markets. It’s also a good chance to explore per route pricing.

If you value your company’s branding, then it is important to choose a carrier that represents your brand well. They will help deliver your parcels, and your message to customers. It is also worth exploring a carrier that gives you the option to actually have their drivers wear your uniforms, and display your branding on their vehicles. This option is normally an offering only made by a Local Delivery company and is a bold statement about how valuable your brand is, sending the best message to your customers—your message.

The strategy becomes clear that to have the best options to meet different goals, means having multiple carriers specializing in each: Mail-Share, International, National, Regional, and Local. Carrier Diversity also has the additional benefits of: flexibility, competition, and an improved negotiating position with all your carriers. Resolve to take action and explore different carriers.

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Knowledge – Pricing in the Parcel Delivery Industry?
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Negotiating Fortitude – Pricing in the Parcel Delivery Industry?
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