Why Ecommerce Merchants are Growing Reluctant to Rely on a Single Delivery Carrier

last-mile delivery Ecommerce Carrier Diversification All Blogs

Jan 01, 2023

Why Ecommerce Merchants are Growing Reluctant to Rely on a Single Delivery Carrier

It’s a trend we’ve been seeing for years. Last-mile delivery providers like AxleHire are picking up a growing share of eCommerce deliveries, peeling off volume and market share from traditional national carriers and disrupting UPS and FedEx’s shipping business. We have conversations every day with merchants who are looking to diversify their shipping portfolios and reduce their dependence on a single shipper.

Esther Fung has seen this trend and looks at what is driving the shift in a piece for the Wall Street Journal. Fung highlights “a growing reluctance among merchants to rely on a single carrier” and cites the “burden of higher shipping rates and surcharges from FedEx and UPS,” capacity issues during the pandemic, and potential labor issues at UPS as factors motivating shippers to migrate to multi-carrier strategies.



For most of our clients, a multi-carrier strategy is the new normal. We think this is a wise approach, similar to the strategy of diversifying your personal investment portfolio. Most shippers will want to maintain their relationships with national carriers. If you have customers in places like Missoula, Montana, or Omaha, Nebraska, FedEx or UPS are probably your best shipping options for those customers. In large, densely populated urban areas where companies like AxleHire thrive, you can often expedite deliveries, improve service levels, and reduce delivery costs by moving parcel volume to regional carriers. 

This strategy does create some added complexity for shippers in determining which package goes to which carrier, but most leading shipping software packages can be configured to manage that decision-making process. The improved convenience to the consumer through better messaging, the ability to update delivery instructions in real-time, and a faster delivery can create a payoff that differentiates merchants from their competitors.

As consumer demands for an Amazon-like delivery experience grow, delivery speed and cost will become more of a market differentiator for online sellers. Strategically moving volume from traditional carriers to regional carriers can create a competitive advantage in this environment. 

But how do you measure the success of that strategy? Mark Ang at Supply Chain Brain has some suggestions for sifting through the massive amounts of data available from Order and Warehouse Management Systems and carrier data and identifying the critical metrics that identify the health of your shipping operations and how to get the most from that data. It’s a combination of identifying the most meaningful metrics and the right tools and frequency for tracking data over time.