There are a number of regional parcel carriers that can challenge UPS and FedEx in their respective service areas, says Schwarz. Shippers are drawn to those smaller players for their greater flexibility with regard to such factors as pool times, injection times and next-day service. “Regionals are more nimble,” he says.
Regional players might lack the huge resources of the big national carriers, but “the advantages we bring to the table outweigh the disadvantages,” Schwarz claims.
The regional parcel business is “growing constantly.” Most carriers in that sector are no more than a decade old. Their growth has been spurred by the expansion of electronic commerce and internet-based retailers. Those new-age merchandisers are constantly looking for ways to reduce costs.
Regionals also have the advantage of being intimately acquainted with their service areas, says Schwarz. At the same time, they can compete with the nationals on price.
Same-day service is gaining in popularity with consumers in major metropolitan areas. As carriers’ infrastructure expands, they will be able to offer that option in smaller markets as well. The key to growth, says Schwarz, lies in generating enough volume to make the service economically feasible.
To a great degree, the survival of regional carriers depends on their ability to be included as a shipping option on e-commerce sites. The fledgling industry still faces the challenge of getting in front of the customer. “We’re working to get visibility,” says Schwarz.
The big nationals might be tempted to acquire regional carriers that pose the most serious competitive threat, but Schwarz says smaller entities will survive on their own. “I think it’s going to continue to be an independent solution,” he says. “That’s where our advantages come into play.”
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