Aug. 9 2013 05:12 PM

It seems today we are constantly being asked to find ways to cut costs. This is nothing new to those of us who manage parcel spending. In fact, we have become experts at reducing costs. We have learned to negotiate better rates with our carriers, we have mastered contracts and mileage based pricing models, and we have learned to leverage complex multi-carrier shipping models. Indeed, these are all proven ways to reduce costs. So, what's next? Where are we to go from here to find additional cost reductions in the parcel spend? In today's environment, where everything appears to be optimal, where do you look for additional savings? The answer is simple; we should evaluate regional carriers as a viable alternative to our existing tier-one carriers. 

Traditionally, the multi-carrier shipping model included only the tier-one carriers like DHL, FedEx and UPS. It's now time to expand our definition of that model to include the various regional carriers into our multi-carrier shipping model. There has been a trend over the past few years that appears to be gaining ground, where some shippers, have been able to lower their transportation spend and increase customer satisfaction by using regional carriers. Due to operational efficiencies and focused geographic coverage areas, many regional carriers can deliver parcels in their service areas for less money and in less time than the major tier-one carriers. Several of these regional carriers also offer specialized services, for example; HIPAA trained delivery options that the major carriers do not have.

Regional carriers are typically limited to domestic shipments within specific geography, but, shippers who have a geographic-based service area or those with sufficient volumes to justify additional carrier relationships, can take advantage of geographically based carriers to reduce costs. Regional carriers can provide lower costs, more flexible delivery options, specialized services and access to their regional carrier network. It is worth exploring a regional carrier program not only as a way to reduce cost but also as way to improve delivery times by taking advantage of regional carriers' expanded next day service area. 

Another trend to consider is regional carrier networks. This is where regional carriers have strategic relationships with each other, similar to the work share programs the larger carriers have with the U.S. Postal Service, for last mile delivery. For example, Lonestar Overnight has recently begun offering a work share service with Ontrac called LSO Plus. This expands the geographic reach of the regional carriers to support expanded regional or national coverage.

Regional carriers have become a viable alternative to the tier-one carriers over the past several years and in fact, may be a better fit for your company than you think once you determine your specific needs. 

Larry Lewis is a Global Transportation and Shipping Product Marketing Manager at Kewill with responsibilities for the company's multi-modal shipping and spend management products and services. Larry holds degrees in Behavioral Science and Network Engineering and has over 10 years of experience in software and high-tech industries. Prior to Kewill he was co-founder, CTO and COO of Pointandship Software where he led the design and development teams for their Shipping Expense Management software. Prior to co-founding Pointandship Software Larry was the COO at Comm360 System Integrators.