With Surge in eCommerce, Some Regional Expanding Service Areas, as Volume Growth makes Strategy Viable for more Shippers

So-called regional parcel carriers have long offered and under-used alternative to giants UPS, FedEx and the United States Post Office.

Supply Chain Digest Says...   Regional parcel carriers are estimated to have about 6% to 8% of the overall US parcel market. What do you say? Click here to send us your comments Click here to see reader feedback

As the name suggests, regional parcel carriers serve some grouping of states, not full national coverage.

Examples include GLS, which operates in western states; LaserShip, serving a wide number of east coast, southeast and mid-west states; LSO, operating in Texas and several surrounding states; and Spee-Dee Delivery, serving upper Midwest states; among several others.

Shippers in most but not all states are actually served by more than one regional carrier. It appears only Montana and Wyoming have no regional service.

Shippers have been using regionals for decades, but have simply not been on the radar of many parcel shippers. But that is starting to change with the huge surge in parcel shipments driven by pandemic, straining the networks of the national carriers and sending rates and fees upward, even as shipment volumes are being capped for some customers.

The regional are investing to take advantage of the opportunity.

LSO, for example, is planning a five-state expansion in early September to provide parcel delivery in Louisiana, Arkansas, Missouri, Illinois and Kansas.

The carrier told the Wall Street Journal that it expects its ecommerce business will grow by 180% to 190% this year.

Virginia-based LaserShip has also moved into several new states this year, and service in Tennessee last month. The company now operates in 21 states and the District of Columbia, and plans to push west of the Mississippi, chief commercial officer Josh Dinneen told the Journal.

The rising ecommerce volumes mean regional can add new territories and achieve profitably quickly as they increase options for parcel shippers.

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Regional parcel carriers are estimated to have about 6% to 8% of the overall US parcel market.

Obviously, not all shippers were have enough volume in different markets to make regionals a viable alternative for them. But as ecommerce fulfillment continues its rapid growth, the strategy will be worth considering for many shippers that would not have had the needed volumes just a couple of years ago.

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