Everyone’s familiar with the saying, “Don't put all your eggs in one basket". The expression is a warning against concentrating all your resources or efforts into one place or thing. When relying too heavily on a single option, you potentially put everything at risk in the event of a crisis. Although this time-worn phrase dates back to the 1600’s or earlier, it still remains applicable to an abundance of situations, including your shipping strategy.
An effective way to apply this advice to your shipping strategy is by diversifying your carrier mix. This provides shippers with carrier options in the event of a supply chain disruption. The saying became especially relevant in the logistics world after the pandemic struck, causing a spike in e-commerce, disruptions in carrier networks, shifting consumer behavior, and more.
Post pandemic, in today’s rapidly evolving shipping landscape, supply chain innovation and adaptability are essential. Still amidst times of changing consumer expectations, dynamic market conditions, labor unrest and other unforeseen circumstances, businesses are realizing that carrier diversification is a key driver of success. If you are looking to inject flexibility into your shipping processes, mitigate risks, enhance service coverage, and unlock new opportunities, then carrier diversification is a strategy to put in place. Here are seven ways having more than one major carrier can benefit your business:
- Reduced Risk: Relying on a single carrier can pose risks such as service disruptions due to weather, labor strikes, or unforeseen circumstances. By diversifying carriers, you reduce the risk of shipping disruptions having a devastating effect on your business by distributing shipping volumes across several providers. Additionally, with an advanced multi-carrier shipping solution, if one carrier experiences an issue, you can seamlessly switch to an alternative carrier. This redundancy helps to continue the flow of goods, ensure timely delivery and business continuity, and minimize the impact on your shipping operations.
- Increased Flexibility and Scalability: By integrating multiple carriers into your shipping software, you gain the flexibility and scalability to adapt to evolving market conditions, shifting consumer preferences, and seasonal demands. It allows you to find the best carrier suitable for specific needs on a shipment-to-shipment basis, based on factors such as cost, transit time, destination, and service level. This agility allows you to optimize your shipping operations and handle fluctuations in consumer demands efficiently.
- Competitive Shipping Rates: Carrier diversification enables you to compare shipping rates across multiple providers. Each carrier may offer different pricing structures, discounts, or negotiated rates based on several favors like your shipping volume, destination, or time in transit. By having options, you can identify the most cost-effective shipping solutions for your business, potentially reducing shipping expenses and passing along those savings to retailers as well.
- Geographic Coverage: Incorporating different carriers into your shipping software allows businesses access to a broader network of delivery routes and service areas. Individual carriers typically have strengths in certain regions whether that be local, regional, or international. By diversifying carriers, you can expand your shipping reach to more areas and access markets that might be underserved by a single carrier. This allows you to leverage your established expertise in different geographic locations while also growing your business. Carrier diversification helps you reach a wider customer base and opens the door to entering new markets with confidence.
- Improved Service Levels: Different carriers have their strengths and weaknesses, such as specific routes, delivery networks, or specialized services. By diversifying carriers, you can fill the gaps in areas where some carriers might be as efficient. This allows you to tap into each carrier’s unique strengths and select the option that best aligns with your specific shipping requirements. This can result in faster delivery times, higher customer satisfaction, and overall improved service levels.
- Empowered Negotiation: When you have multiple carriers integrated into your shipping software, it strengthens your position during carrier negotiations. You can leverage competition among carriers to compare rates or service capabilities. Carriers may also be more likely to offer you discounts, customized solutions, or other attractive incentives to secure or maintain your business. Overall, negotiation allows businesses to vouch for more favorable pricing, contractual agreements, and value-added services.
- Increased Customer Satisfaction: Every business has the goal to provide an exceptional customer experience- after all, it’s what builds brand loyalty and customer trust. By expanding your carrier library, you increase customization abilities, flexibility, and other great options for customers. It also allows for the selection of carriers based on factors like reliability, delivery speed, and geographic range that best aligns with your customer’s needs. With higher consumer expectations surrounding deliveries today, customers appreciate carriers who can get them their goods in a safe and timely manner.
Overall, diversifying your carrier mix offers a variety of benefits for businesses navigating the ever-evolving world of supply chain and logistics. This strategy enables greater flexibility, improved service levels, cost optimization, risk mitigation, expanded market reach, negotiation power, and increased customer satisfaction. Integrating multiple carriers provides operational redundancy, allowing businesses backup options in the event of disruptions and other unforeseen circumstances. Additionally, carrier diversification creates the opportunity for businesses to expand their reach, enter new markets, or those that may be under serviced. Embracing a carrier diversification strategy is imperative and empowers businesses to construct resilient, streamlined, and customer-focused operations in a constantly evolving marketplace.
Need help getting started with a carrier diversification strategy or shipping software? Contact our experts today to discover how Varsity Logistics can improve the way your business does shipping.