Multi-Carrier Transportation: An Overview

In-House, 3PLs, Couriers, and Network Partners: Tips for a Multi-Carrier Transportation Strategy

In today’s supply chain space, flexibility and adaptability are essential. One transportation style that many organizations, particularly e-commerce, are applying to their operations is multi-carrier transportation. 

Key Takeaways:

• Multi-carrier transportation is when a business uses a variety of transportation options to carry out its deliveries. These include different 3PLs, couriers, or its own vehicles.

• Multi-carrier solutions provide the flexibility to choose a combination of the right partners without necessarily being tied into one network.  
• Working with a supply chain orchestration partner can allow businesses to harness the benefits of a multi-carrier strategy without needing to manage all the transportation partners themselves.

What Options Can Be Included In The Multi-Carrier Strategy?

In the final mile area specifically, a multi-carrier transportation strategy can include a combination of options such as:

Using Your Own Vehicles

Using your own fleet can be a beneficial option if you have a high enough volume to justify the up-front costs. However, accessing remote areas can be inefficient and costly if shipments are not full truckload. 

Partnering With A Courier

Couriers, such as UPS or FedEx, are another way businesses can get their final products to customers. These couriers tend to be able to deliver in a wide variety of locations, including remote or rural locations. However, they come with a higher cost. 

Partnering With 3PLs

A popular option for e-commerce operations is to partner with a third-party logistics operation in the location of their different customer base. Sometimes, your 3PL might also work with couriers or other transport operations. 

How Do Businesses Decide on the Optimal Combination of Transportation Partners?

Which of these options, and which ratio, a business uses can depend on several factors, including: 

• Customer type
• Product requirements, such as cold storage
• Order volume
• Cost considerations
• Customer locations 
• Order frequency 

A business adopting a multi-carrier delivery strategy might also work with several partners in each category, depending on their business needs, seasonality, requirements for flexibility, and more. 

How Do Businesses Operate Smoothly When Working With Multiple Transportation Partners?

If you are managing your own network, there can be some upfront work involved, and accurate data is essential. A list of locations, and order frequency for those locations, allows you to determine how best to allocate orders to your carriers. 

The first step is determining which orders go where.

This includes:

• Gathering the orders

• Geocoding the orders

• Carrying out frequency analysis

• Mapping the orders

• Dividing them among your carriers and your own fleet

Additional tips:

• For orders that are being delivered by your own fleet, ensuring that your routes are optimized can help you reach new levels of efficiency.
• When working with couriers, 3PLs, and other transportation partners, it's important to ensure that you have provided complete and accurate address and order data.

Can I Outsource My Transportation Management?

With all of these steps, it is little wonder that businesses sometimes want to outsource the management of a complex, multi-carrier transportation operation to another business.

In this case, you will still need to gather accurate data about orders and addresses, but your orchestration partner can manage things from there.

The advantages of having a partner to manage your transportation providers include:

A Pre-Vetted Transportation Partners

If you’re outsourcing to a company that handles supply chain management, odds are they already have a network of fulfillment centers, warehouses, carriers, and other potential partners in their network.

Not only does this save you the trouble of building your network from scratch, but it also ensures that these partners have been well-vetted. 

Plus, if this business’s main focus is transportation orchestration, it is likely larger than one that most small and medium-sized businesses could maintain on their own.

This means that smaller businesses working with a supply chain orchestration partner can benefit from scaling opportunities, as well as have flexibility, should any disruptions arise.

Dedicated Expertise and Focus

Outsourcing not only frees up your supply chain team for other tasks, but it puts it into the hands of experts–supply chain orchestration specialists are dedicated to this task, meaning that they have a high level of insight into this area and can more easily respond to disruptions. 

These two characteristics of outsourcing transportation management also save your business time and money. 

Software and Synchronization

If you’re managing a multi-carrier transportation approach yourself, you will need to stay synchronized with all of your partners, to share order data and keep track of where your product is.

This can mean extra time adding software integrations, or onboarding, to get you and your transportation partners on the same page. 

With a supply chain orchestration partner who can assist with transportation, the 3PLs, distributors, and couriers in their network are often already onboarded onto the same system–if you’re working with them and they already work with major couriers like UPS and FedEx, it’s possible that the only one who needs to onboard may be you!

Contact Our Team

Want to learn more about getting started with multicarrier transportation or how to get started when working with a courier, 3PL, or 4PL? Contact our team through the contact form or the chat, or check out our past blogs on the topic.