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The Case for Carrier Diversification

The coronavirus pandemic accelerated the growth in online sales over the last year. While the surge in e-commerce has presented many positive opportunities for retailers, it has also created a set of logistics and operational challenges. Retailers are getting squeezed on both sides by consumer demands of faster and free delivery, coupled with major surcharges and capacity constraints levied by national carriers.

With elevated online sales going nowhere after COVID-19, retailers need a reliable supply chain that can keep up with demand—and 2020 proved that single-carrier shipping strategies are not the answer. A diverse carrier mix can help retailers manage growth and higher volumes, while saving money, enhancing the customer experience with faster delivery, and increasing capacity.

Here’s how carrier diversification can position retailers for success:

  1. Greater Capacity and Flexibility: In 2020, retailers were stuck when national carriers started imposing volume limits. As a result, regional carriers were called on to fill the void. The capacity crunch accelerated by the pandemic is not going to go away anytime soon as retail sales shift online. Retailers that diversify their carrier base can build flexibility and options within their supply chain, while avoiding capacity constraints that cause delays and put the customer experience at risk.Source: Convey
  2. Faster Delivery: During COVID-19, retailers have experienced higher on-time performance from regional carriers versus national carriers. Regional carriers also have less disruption risk to their supply chains and delivery networks. Retailers can utilize regional carriers to achieve faster delivery times and reliable on-time performance that consumers, especially Millennials and Gen Z, are demanding.
  3. Cost Savings: Over the last year, national carriers like FedEx and UPS have piled on peak surcharges and cost increases. And there’s no end in sight. Just recently, FedEx announced three additional peak surcharges on Express and Ground shipments and other services starting on June 21.Carrier diversification is a critical tactic to combat these surcharges and out-of-control rates. By moving volume to alternate carriers, retailers can reduce shipping costs or stay below the volume thresholds that trigger peak surcharges from national carriers.

Contact us to learn more about the benefits of carrier diversification. For additional information, watch our brief video.

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