For years, regional carriers were relegated to afterthought by ecommerce companies. Efficiency and scale provided by the four national carriers meant that most ecommerce companies wanted to secure a single contract with a national, wipe their hands, and move on.
At a certain size, adding regional carriers becomes one of the biggest driver of improved costs and customer experience. Fortunately, many more companies are realizing this and regionals are rightly no longer being considered an afterthought.
Costs are a main reason. Regional carriers offer tighter local networks that can lead to better rates for the areas they cover. Speed of delivery often competes or beats national carriers, too.
But an increasingly number of companies are adding regional carriers for resiliency above all else. The industry is shifting away from the single-point-of-failure afforded by consolidating on a single national carrier. The majority of companies we spoke to experienced major issues with USPS during Q4 peak. Who cares if you have the (perceived) best rate in the world with USPS if it takes three weeks to deliver a package and miss Christmas? Customers loyalty diminishes, stalling growth.
Once you get to two national carriers, it is usually smarter to begin including regional carriers before adding another national carrier. We recommend getting to three or four, effectively one for each corner of the country.
The challenge is onboarding and managing them. Complexity explodes as you now need to add these carriers to your internal policies and technology. Weekly surcharges have to managed. API integrations maintained. As a result, operators need to secure the direct business contracts with a regional carrier, but also ensure their technology stack can accommodate the scale.