Regional Carriers are the Hidden Secret in the World of Parcel Shipping
Let’s be honest. In the competitive parcel shipping environment, even large regional parcel carriers like LSO/Lone Star Overnight, the largest region in the Southwest, have been challenged by their national competitors, FedEx and UPS. With more resources, bigger brands, and the perceived availability to offer deeper discounts, particularly on larger deals, they have traditionally grabbed a lion’s share of the shipping market. Other reasons drive the disproportionate market share. Due to the larger volume of their business, the nationals deliver more packages per individual stop, which lowers their delivery cost. Also, many customers are just plain unaware of the significant advantages a regional carrier can bring to their business.
Regionals need to be more vocal about these advantages. A shipping manager may be hesitant to select a regional carrier over a well- known brand lest there is a “mess up”, and he or she will get blamed for not selecting the best-known brand for service. However, this is only a myth. “The truth is”, said LSO CEO Richard Metzler, “the regional carriers can deliver equally reliable and often faster service due to smaller coverage areas and a tighter network, and we beat the nationals by far in terms of damaged packages and claims. The cost of doing business can also be lower because we don’t have the overhead of our competitors, as in the case of LSO, and we offer up to a 40% discount in many cases.” Often most important to customers, regionals can offer flexible and customized services not available to their competitors, due to size and lack of the large bureaucracy. “LSO is outstanding, and their level of service goes beyond what FedEx and UPS can even dream of providing,” offers satisfied LSO customer Norman Dover.
Today, consumers value choices, especially when it saves them money, and regional carriers give customers a valued choice in the footprints they serve. “A growing number of shippers are using regional parcel carriers to complement the service of the national providers,” said Rob Martinez of Parcel Magazine.
To that endorsement, add the recent phenomenon of e-commerce to the shipping world. The nature of today’s shipping market, with the volume of B2C increasing significantly and the emphasis on fast, next day service, plays well for the nimble regional carrier who has made the switch from traditional B2B service to the residential consumer market. For example, LSO’s e-commerce business has grown to be 20% of the company’s total revenue in just the past year. “LSO has become a vital business tool for the success of my business,” said Ricardo Benavides, CEO of Elite Driving Systems. There’s one smart customer who has learned the value of partnering with a regional carrier.