As the major carriers strain under the torrent of parcel shipping volume, limiting service and boosting fees, shippers are increasingly looking to regional carriers to get items to customers’ porches. However, managing an expanded network of regional carriers can be tricky without the right retail shipping technology.

It’s no secret at this point that the carrier capacity crunch brought about by the COVID-19 pandemic has taken a toll on shipping efficiencies for carriers. And it has only gotten tougher with the holiday peak season upon us as carriers struggle to deliver less profitable residential deliveries. Trying to make up the profits, carriers have been applying peak surcharges for months now. With volumes not expected to wane anytime soon, shippers are looking for ways to meet their customers’ high expectations and keep their profit margins intact at the same time.

Retailers supplementing with regional carriers

According to a Convey study, an average of 17 percent of retail volume went to regional carriers in the first seven months of 2020, compared to only 3.8 percent in 2019.  This trend is accelerating as we move deeper into the new business climate, with a reported 24 percent of volume moving with regional carriers in July.

Pierbridge partner, PCF, a final-mile delivery service provider focused on the high-density Northeast region, credits some of its fast growth to a couple of different reasons that go well beyond the current pandemic.

“As a regional provider, we have seen steady growth and a widening interest from shippers of all sizes looking for carrier diversification for two primary reasons,” says Matt Clark, Vice President, Growth for PCF Final Mile Delivery. “First, it has been capacity, and the other is cost. The pandemic certainly has accelerated this progression; however, the economics of eCommerce projects to continue driving a desire for cost predictability or cost reductions due to accelerated online competition and more localized supply chains.”

According to a survey reported in Forbes, last-mile delivery is the top delivery pain point for more than half of retailers and accounts for 41% of the total shipping cost for most retailers.

Conversely, high-growth retailers see great last-mile delivery as a competitive advantage and they are nearly 30% more likely to use technology to predict delivery outcomes than retailers growing slowly or not at all.

Consumer and corporate shipping changes continue

As companies continue to promote remote workforces, along with a shift in buying habits of consumers, the eventual end of the pandemic may not bring immediate relief to the carrier capacity crunch or the benefits of using regional carriers to move parcels through the last mile cost-effectively and on time.

“End consumers will accelerate the expanded demand on customer experiences from the brands or companies from which we purchase goods,” says Clark. “Blocking and tackling of delivering on time will continue. However, differentiation will derive from the carriers who can provide a more optimal experience for the end consumer.”

As shippers grow their carrier network, adding more regional and local players like PCF into their mix of carrier options to meet the changing demands of consumers, utilizing a multi-carrier parcel management solution, such as Transtream, will be critical to maintaining visibility, cost control, and service that can set your brand apart from the competition.