Last-mile delivery is the most critical and costly aspect of the whole delivery chain. All businesses want to excel in this one area which matters the most to their customers.
And with the peak season coming in, it becomes all the more important.
Missed deliveries, delays and unsatisfied customers are a nightmare for any business owner. And nobody would want to be in that position.
And there is a solution too.
Carrier Diversification. It is a process of having more than one carriers for your last mile deliveries. The number could go upto as many depending on the size of your shipment.
Carrier Diversification: What is it and how can it help?
Carrier Diversification is a simple process wherein you do not stay limited to only one carrier for the delivery of all your shipments.
Suppose, you want to deliver more than 1000 orders/day, dependancy on one carrier can put you in trouble.
During Covid, a lot of retailers witnessed this surge in their orders. But unfortunately, all their orders could not be delivered.
This year, the surge is expected to be less, nevertheless, you should have your delivery game on point.
And carrier diversification is the path to take.
Different types of carriers
The last-mile delivery process involves delivering a package from the nearest shipping hub to its final destination. Last mile-carriers are the actual shipping companies that transport packages to your customer. Majorly, there are two types of carriers.
They are the most popular and famous ones. To name a few, they would be United Postal Service, FedEx, USPS. These carriers deliver all over the country and are quite old and big in the business.
Most businesses, big and small, trust them for their last-mile deliveries.
As the name suggests, they are limited to a particular geography or a region. Just for reference, they might deliver to a remote area but not in the main city. Their boundaries are set and can also deliver in areas where national carriers might not reach.
To name a few, United Delivery Service, OnTrac, CDS Last Mile Solutions.
Advantages of Carrier Diversification
This is one of the biggest advantages of Carrier Diversification. Often it is seen that national carriers put a cap on the number of orders they can ship. This could be detrimental to your business.
Your dependency on one carrier can leave you with unfulfilled orders and waiting customers.
With diversification, you can dissect your total orders and distribute them to other carriers in case of capacity limitations.
Most retailers feel that having more than one carrier is not cost-friendly. But, it is totally untrue.
Infact, by dividing your shipment, you can make your business more cost-effective. Regional and other carriers are not very costly as they don’t have to spend a lot on marketing and a good mix and match can actually save you costs.
Delays in last-mile delivery can induce anxiety and dissatisfaction in your customers. Diversification will make sure that the orders reach on time.
Apart from that, it also helps in enhancing the customer experience. If you are dependent only on one carrier, it might not be healthy and not always land up in a pleasant experience for the customer.
Having different carriers gives you an edge rather than to the carrier. Also, regional carriers expand your reach and you can hit new geographies with them.
It ensures faster delivery and are easier to work with.
When is the right time to do it?
As we mentioned above, peak season is the time when it comes most handy. But, one should not wait for that in order to diversify.
Diversification involves a lot of processes such as identifying new carriers, onboarding them and getting them into the system. It is time taking and ever evolving.
Experts suggest one should start early for best results. April-May is the right time to start this process. It will give you more leverage and time to change things in the off-season.
Challenges for choosing more than one carrier
Carrier Diversification is a new concept and we understand that it might not be very easy for retailers to adapt and adjust. There are quite a few challenges that are faced by retailers while going for a carrier mix.
Technology might seem a hurdle to many businesses in the beginning. But, if you are there, front and center, things get better overtime.
Also, there are a lot of softwares that help you in onboarding new carriers. Look out for a multi carrier shipping software just as Tookan. Tookan helps you in tracking multiple carriers delivering your shipments.
You must click on Tookan to know how it can work wonders for your business. It is easy to use and handles all your headaches.
Fear of losing incentives
Many national carriers provide a lot of incentives to businesses for their shipments. Diversifying carriers might make them lose on that. And this is a very common fear among retailers.
But, in the overall picture, carrier diversification helps in reducing costs and retailers can even ask other carriers if they are offering any discounts.
How to choose the right carrier
The carrier is an extension of your brand and can have immediate and real impact on your business. So, choosing the right carrier is very crucial to the success of your business.
Here are some tips:
- Understand the operations of your new carrier, how they work and how good they are at it.
- Communicate frequently with the new carrier before making a decision.
- Talk to other retailers and take comprehensive advice on the new carrier.
- Be ready to shift if the carrier is not convenient to your business.
Last mile logistics is what can make or break your online business to a large extent. And with each passing day, every customer wants a delivery faster and quicker than before.
To achieve that, a retailer must adapt to changes and start working on carrier diversification now.
Subscribe to our newsletter
'Jungleworks Entrepreneur's Den' to get access to the latest industry & product insights.