Understand industry terms that we use often
Many-carrier strategy isn’t an official term in logistics. Still, we find it helpful to refer to business cases of shippers who work with multiple carriers but only one per lane and type of transportation. So, even though these shippers work with various carriers to deliver their orders, the carrier for a shipment is still predetermined based on the shipping scenario.
Example A manufacturer of golden watches that ships to consumers directly and supplies jewelry stores must work with multiple carriers. A single watch can be shipped with insurance by an Express carrier, but pallets with hundreds of golden watches should be transported in an armored van by a security transport company.
A multi-carrier strategy entails working with multiple carriers per lane. This means that a shipper has various carrier options for the exact shipping scenario.
Multi-carrier strategies are most profitable for Parcel shipping, including Express shipping. The shipping rate depends on a package’s weight, size, destination, and speed of delivery. Therefore, it differs per package which carrier is the cheapest, considering how fast the customer wants it delivered.
Example With a multi-carrier strategy, an office supplies webshop could have 3 to 4 carriers for deliveries within the Netherlands. Which one’s the cheapest will vary based on the weight and dimension of the parcels and by when the customer needs their order. Carrier A could be the most affordable option to deliver three boxes of notebooks with 48-hour service. At the same time, carrier B is cheaper if those same boxes must be delivered by noon the next day, and carrier C is more expensive for packages of this weight and dimensions but cheaper for shipping letterbox packages.
We define a single-carrier strategy as the strategic choice to work with a single carrier to deliver all your outbound shipments.
This is only sometimes an option; a carrier must be up for the job. It depends on how varied your shipping scenarios are if this option is open to you. The more varied your goods and the more comprehensive your sales area and customer shipping preferences, the less likely you’ll be able to work with one carrier to deliver them all. If you ship only packages that must be delivered fast, you could get by with a single Express carrier. If you also ship pallets to brick-and-mortar stores, you’ll probably work with a Road carrier as well.
Example A wholesaler selling garden ornaments to garden centers in the Netherlands and Belgium can adopt a single-carrier strategy and have, for example, DHL Freight take care of all shipments.