Some online retailers have recognised that having a single carrier delivery all of their customer parcels is not enough. Instead a growing number are using a number of different carriers – also known as a ‘multi-carrier’ approach – to take advantage of what each carrier does best and to optimise the balance of cost to the business and service to the customer.
Let’s take a look at the specific business advantages for using a multi-carrier strategy:
Reduced delivery costs
It is possible to allocate the most cost effective carrier service for every parcel, considering specific characteristics such as: weight, dimensions, special handling requirements, delivery locations as well as the specific service requirements (For example: signature required). In addition a mix and match approach to choosing the best carrier reduces other costs, such as the risk of incurring additional surcharges for ‘non-conforming parcels’ and also the opportunity to reduce the rate of failed deliveries, for example where the carrier has the expertise to deliver to business vs. residential address.
Maximise service levels
Every carrier has certain capabilities where they excel at are handling and delivering certain types of parcel to certain areas or may have higher levels of service because of the carrier depot location. On the other hand, occasionally a carrier may experience times where services to a particular delivery area may not be as good as they should due to an operational problem at a depot, or areas where they may not choose not to deliver at all, e.g. where it is not safe for the driver to deliver or the depot cannot service a particular area due to a natural disaster. A multi-carrier approach will allow shippers to have a continuity of service across all areas, which can then be monitored and tweaked over time.
Offer a greater range of delivery options to customers
Retailers that wish to offer a range of delivery options recognise that one sized cannot fit all and that in order to offer customers a range of delivery options at an economic price that a multi-carrier approach is the way forward. In order to offer services such as Next Day or 24 hour, 48 hour, AM and PM deliveries, as well as the alternative delivery location services, such as delivery to locker bank or a convenience store to main areas. Also it may be likely that depending on the delivery area that a different carrier could be more cost effective to provide the same levels of service.
Peak period service contingency
A multi carrier strategy provides insurance for an online retailer’s primary way of delighting the customers: that is successful delivery of the customer’s order. This is achieved through provision of an alternative carrier for delivery to each area, should the best carrier not be able to deliver for any reason. For many retailers, this is the primary reason for having more than one carrier – ensuring that there is at least one carrier that can deliver to customers. This is essential during peak periods, such as the four weeks up to Christmas or other times where high levels of parcel traffic are causing delays with the carrier in processing and delivering parcels.
Do you use a multi-carrier approach in your business? What were your main reasons for doing so? If you still use one carrier what are the main concerns about doing so? I look forward to hearing your thoughts.
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