by LJM Group

Advantages of Shifting from a Single Carrier

In 2020, many parcel shippers were left clambering when their outgoing shipments were turned away by UPS, FedEx, DHL and others due to capacity limits they implemented in order to manage the surge. Forward-looking companies that already had multiple Carrier contracts in place fared better than others. This year, shippers will look to grow their Carrier networks to prevent future shipping disruptions and better accommodate customer demands.

Because Carriers have different strengths, likely one can’t possibly meet all your shipping needs. An approach using multiple Carriers will diversify your strategy and give you the power to more efficiently fulfill orders. The advantages of maintaining relationships and contracts beyond the big three include the following:

Shipping is always subject to some risk. But reliance on a single provider leaves your company more vulnerable to the possibility of problems. Service levels can change or delivery to regions can be eliminated. More commonly, delays due to inclement weather occur. With multiple Carriers to turn to, the chances of satisfactory daily order fulfillment are greatest.

When a shipper is in an exclusive relationship with a Carrier, they become comfortable about the relationship. As a result, the Carrier may not be inclined to expand on services or offer the most competitive rates. When there’s competition, customers are more likely to be informed of the best rates, routes and service levels in order to keep your business. This allows you to negotiate more strategically when it’s time to renew a contract.

Being locked into a contract with a single Carrier limits your options in accommodating customer requests. For example, some customers may request that you ship packages or freight to them on their account, while consumers may want to take advantage of services such as pick-up/drop-off (PUDO) and buy-online/pickup-in-store (BOPIS) options.

With online shopping volumes off the charts, returns are becoming a challenge. Businesses with high volumes of returns are facing an even greater challenge when they are committed to a single Carrier. While some may excel at shipping outbound parcels, they might be less adept at managing reverse logistics. To handle returns, shippers should have the option to choose a provider with the most competitive rate to get goods back to a seller or manufacturer.

Partnering with multiple Carriers is one of the best ways to rate-shop providers so that you can select the most cost-effective shipping option for every order. Different delivery locations, package sizes and weights have different shipping costs. Having several existing delivery contracts makes it easy to pick and choose as needed to keep shipping costs as low as possible.

To avoid being at the mercy of just one, a multi-carrier shipping strategy gives organizations more flexibility to meet shipping demands. While researching every rate, route and delivery option for each shipment isn’t feasible, having a network of existing contracts with local, regional, and global Carriers is ideal to drive down excess costs, and increase profitability and margins.

To do so, it’s necessary to research contract opportunities and negotiate new agreements, which can take months. LJM simplifies the process. Our logistics consultants analyze your ever-changing shipping profile against your contracts, and assist you with Carrier negotiations, thereby lowering your shipping spend and increasing your bottom line. We help assure you receive the best service at the best price.

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