For decades, two major players have defined the parcel landscape, but that balance is changing. As UPS and FedEx prioritize margin optimization over market share, a new wave of alternative options, including regional, tech-driven, and hybrid networks, is gaining traction. The result: greater complexity for shippers, but also more opportunity.
A More Crowded Playing Field
UPS and FedEx built networks that set the industry standard for reliability. Their infrastructures remain unmatched, but their strategies have evolved. Both carriers are now laser-focused on profitability, frequently adjusting surcharges, rates, and fees. The once-predictable rhythm of annual rate updates has given way to a volatile pattern of mid-cycle changes, now occurring with increasing frequency and little notice.
This constant recalibration has introduced volatility, pushing many shippers to seek predictability elsewhere. In response, regional carriers and tech-driven solution providers are stepping in, promising lower rates, simpler fee structures, and faster local or regional coverage. For many shippers, the conditions are finally right for the long-standing single-carrier model to give way to a truly diversified, multi-carrier ecosystem.
The Expanding Alternative Network
The most visible recent example is OnTrac, which has evolved from a regional operation into a near-national network. Its upcoming Express and Ground Essentials services, launching in 2026, promise coast-to-coast delivery coverage and as much as 30% lower costs than legacy economy services. By eliminating several common surcharges, OnTrac is positioning itself as a compelling, lower-cost option for small and midsize businesses seeking predictability and control.
Amazon Logistics continues to expand its influence as well. The company’s Multi-Channel Fulfillment program now supports merchants selling on Walmart, Shopify, and Shein, signaling a shift from an internal logistics arm to a full-fledged parcel carrier. With unmatched fulfillment density and delivery reach, Amazon has become one of the largest parcel networks in the United States.
Smaller entrants are also scaling quickly. Veho, an e-commerce delivery platform, recently expanded capacity across 15 markets ahead of peak season to meet “retailer demand for flexible, same-day solutions.” Similarly, UniUni, a Canada-based carrier, has launched US operations to connect cross-border networks with affordable ground delivery.
Together, these developments highlight a clear trend: the long tail of parcel carriers is lengthening, offering shippers more choice, flexibility, and leverage than ever before.
Strategic Implications for Shippers
For many organizations, regional and alternative carriers can yield 20% to 30% savings on select lanes or parcel profiles, while improving delivery performance in targeted regions. However, these advantages come with trade-offs. Reducing volume too sharply with FedEx or UPS can erode tier-based discounts or incentives, diminishing overall savings.
The most effective strategy begins with data-driven market analysis. Understanding how current rates compare to market norms enables shippers to pinpoint which alternatives make financial and operational sense. For example, a company shipping lightweight residential parcels to short-zone destinations may gain efficiency by integrating a regional carrier, while maintaining its national provider for longer routes and international coverage.
Ultimately, the goal is to balance the network for optimal cost, service, and resilience.
How to Evaluate Whether Alternative Carriers Make Sense
Exploring alternative parcel carriers can create meaningful advantages, but not every business will benefit equally. The right approach depends on a shipper’s profile, operational readiness, and technology infrastructure.
Companies considering diversification should take a structured, data-informed approach:
- Audit Your Shipping Profile: Identify which parcels generate the highest cost-to-value ratio. Lightweight, short-zone residential deliveries are often suited for local or regional carriers, as well as the United States Postal Service.
- Compare Total Cost, Not Just Rates: Evaluate the full picture, including base rates, fuel, and other accessorials, and the impact of volume shifts on carrier discount thresholds.
- Model Scenarios Using Actual Data: Use shipment-level invoice data to model costs under different carrier mixes, identifying where diversification drives real savings.
- Assess Technology Capabilities: Ensure rate shopping, label generation, and billing systems can integrate multiple carrier APIs and service levels without manual intervention.
- Run Controlled Pilots: Before committing large volumes, conduct limited trials with alternative carriers to validate service levels, transit times, and invoice accuracy.
- Revisit Contracts Regularly: Diversification should be part of an ongoing contract management strategy, not an ad hoc reaction to new surcharges. Maintaining multiple carrier relationships can give shippers valuable leverage when renegotiating with their primary providers—often leading to better terms, even without full-scale shifts in volume.
For most companies, technology is the biggest barrier to making multi-carrier shipping work. But success depends on more than just visibility, as it requires the expertise to interpret data, balance trade-offs, and design a strategy that aligns cost, reliability, and customer expectations. A deliberate, data-informed approach enables companies to determine whether the potential savings and service improvements truly outweigh the operational complexity of managing multiple carriers.
Looking Ahead
The rise of alternative carriers signals a structural shift in how the parcel market operates. While UPS and FedEx continue to hold dominant market share, they now compete in an ecosystem where smaller, tech-enabled players can capture meaningful volume through flexibility and lower cost.
This evolution represents opportunity for shippers, but only if managed effectively. Alternative carriers can provide leverage in contract negotiations, diversify risk, and improve network resilience. At the same time, making any change demands discipline in partner evaluation, data management, and service performance monitoring.
There’s no one-size-fits-all carrier mix. The optimal strategy depends on each company’s shipping priorities, zone distribution, parcel profile, and customer promise — and, most importantly, having the insight to balance them effectively.
Thomas Andersen is Partner and Chief Supply Chain Officer – Operations & Execution at LJM, leading parcel contract negotiation and advisory services across 150+ carrier agreements annually. He brings over 25 years of experience in logistics and revenue management, including leadership at DHL Express, where he managed a multi-billion-dollar shipping budget and led pricing and contract strategy. Connect with him on LinkedIn or visit myLJM.com.
This article originally appeared in the November/December, 2025 issue of PARCEL.
