Delivery Notes

Small regional carriers & the global supply chain

Posted by Karen Hales on Jun 8, 2015 10:00:00 AM

Each year, it is exciting to join the many companies who make up the direct-delivery service sector of the global supply chain during the Customized Logistics and Delivery Association (CLDA)’s Annual Meeting & Expo.

This year’s conference, which took place May 6-9 in Orlando, Fla., provided members of our industry important insights into the dynamic growth and delivery trends impacting our business, showcased innovative technologies that are shaping our delivery models, and provided an opportunity to establish relationships with shippers seeking regional delivery companies to focus on the last-mile delivery of their products.

Today, the customized logistics industry is an integral part of the global supply chain, and we are invigorated to learn from leaders in our industry how to best position ourselves to become a growing and vital component.

Here are a few takeaways from this year’s conference: 

On-demand is back

Over the past several years, the need for on-demand same-day delivery services had fallen off due to the speed of technology, digital collaboration and leaner operations by companies.

Today, with the growth in Internet and smartphone penetration and the explosion of e-commerce, on-demand is emerging again at a rapid pace. As people order everything from lunch, dinner, groceries, clothing, office supplies and furniture for home delivery, B2B delivery is being replaced with B2C delivery, and your local regional logistics company may be tapped to bring your order to your door.

Trends in Delivery 

Over the last several years, the number of large carriers has been reduced from eight or nine to what’s known as the “big two,” Fed Ex and UPS, dominating the industry, and with that shippers are receiving less support and fewer areas where they are able to control costs. Big name carrier ground rates have increased from 3 to 5 percent annually in the past five years increasing the need for shippers to turn to regional companies and even resulting in corporations developing their own delivery services.

Corporations, suppliers and retailers are looking away from using big name carriers to deliver their products and turning more and more toward regional carriers who can provide a high level of service and increased cost efficiency.

Large companies are learning they can save money by putting together new delivery network models that could combine their own fleets with regional carriers brought on for the last-mile delivery. Even the big name carriers see the place for regional companies as a way to control costs in the global supply chain.

Amazon testing new delivery model

Amazon for years has depended on national delivery companies to deliver their packages to customers across the United States. Amazon began planning for a new delivery model several years ago. When severe winter weather and snow impacted Christmas deliveries by Fed Ex and UPS in winter 2014, Amazon blamed the carriers but, at a significant cost, offered $20 gift certificates to customers who did not receive their packages by Christmas Day.

Amazon is now testing delivery in the Silicon Valley and in the United Kingdom with its own trucks and is experimenting with additional delivery options, including more flexible regional carriers, and even possibly transforming from an online retailer to a full-service logistics company (Wall Street Journal).

In a recent job posting on its web site, Amazon states it “cannot continue to rely solely on the solutions provided through traditional logistics provider capabilities. Last-mile is a solution to this. It is a program that is going to revolutionize how shipments are delivered to millions of customers.”

Today the reality is that unless companies want to take focus away from their primary goods or services offered and develop their own branches of shipping, looking for ways that small and large carriers can work together to provide shipping is becoming the best option to maintain efficiency, cost and service. 

Creating Regional Partnerships with Shippers

The CLDA Conference provided members with an opportunity this year to meet large shippers interested in expanding their supply chain capabilities through same-day local and regional carriers who have the footprint, technology and ability to fit their delivery model.

Over 20 shippers attended the conference, including several new faces, such as RaceTrac, UShip and Bridgestone. Fourteen shippers participated on panel discussions providing members insights into their specific delivery needs and ways to best position themselves to capture new business opportunities.

Their presence and involvement in this year’s CLDA conference was evidence of these developments occurring in the transportation industry, and the regional carriers attending the conference appreciated the opportunity to make connections with these potential customers.

Growing the base and preparing small companies to capture business 

This year’s CLDA Meeting also introduced a new mentoring program where more experienced members will mentor executives from eight up-and-coming delivery companies to help grow the base and help companies gain the confidence and skills needed to capture business. 

CLDA’s Growth Council is just one way the regional carriers need to prepare for growth and strengthen the industry. Read more on the Growth Council here. 

The future of our industry is bright for regional carriers and CLDA continues to work on helping members stay ahead of dynamic changes in transportation. QCS Logistics is already looking forward to what knowledge next year’s CLDA conference has to offer.

QCS Partner and Business Development Director Jason Burns was the 2015 CLDA Convention Chair.

Topics: On Demand Delivery, Affiliations