How Carriers Keep Supply Chains Moving

From small parcel deliveries to full truckloads, carriers play an essential role in ensuring goods reach their final destination. While Third-Party Logistics providers (3PLs) coordinate logistics, it’s the carriers who make the final connection between businesses and customers. They hold a great responsibility in handling the shipment with care and diligence so that it arrives on time. 

Types of Carriers

A carrier is a company or person who is legally entitled to transport goods by land, water, or air. Usually, a carrier works with shippers to get goods from one place to another. There are a wide variety of carriers that help keep everything in the supply chain moving. 

Common Carriers

• Offer transportation services to the public under regulated rates and conditions.
• Typically used for parcel shipping and Less Than Truckload (LTL) freight.
• Examples would be FedEx, UPS, USPS, and national trucking companies.

Contract Carriers

• Provide transportation services under specific contracts with businesses. 
• Offer customized pricing and service agreements. 
• Often used for dedicated shipping routes and consistent freight movement. 
• Examples would include Penske Logistics, Ryder System, and DHL Supply Chain. 

Freight Carriers

• Transport bulk goods and large shipments via truck, rail, air, or sea. 
• Will use LTL or Full Truckload (FTL) shipments depending on if the order will take up enough space to fill a whole truck or if there should be numerous orders in one truck. 
• Sometimes uses multiple transportation modes (ex: truck and rail) for cost efficiency. 
• Examples would be Estes Express Lines or Old Dominion Freight Line. 

Private Carriers 

• Businesses that own and operate their own fleet for product distribution. 
• Gives companies full control over shipping operations.
• Examples would be Walmart or Amazon. 

3PL and Carrier Collaboration 

3PLs and carriers work closely to manage the transportation of goods. Both parties have commitments that they need to honor, so sharing information and working together is vital. They rely on open communication and technology to streamline processes and optimize delivery schedules and costs for the shipper. 

Challenges Carriers Face

Carriers in the logistics industry face several key challenges. They must find a way to address these challenges while also keeping prices manageable. Some of the challenges include: 

• Rising Fuel Costs - Fluctuating fuel prices impact transportation costs, making it difficult for carriers to maintain stable pricing and profitability. 
• Driver Shortages and Retention - The trucking industry can experience shortages in qualified drivers, leading to increased labor costs and delivery delays. Retaining skilled drivers is also a challenge due to the demanding work conditions. 
• Last-Mile Delivery Complexities - There's immense pressure on carriers to provide faster and more cost effective last-mile delivery services. 
• Supply Chain Disruptions - Unpredictable disruptions such as port congestion, natural disasters, or geopolitical conflicts can delay shipments and increase costs. 
• Regulatory Compliance - Carriers must comply with a wide range of regulations including hours-of-service rules, environmental standards, and safety requirements. 
• Infrastructure and Traffic - Old infrastructure, road maintenance issues, and traffic congestions can cause delivery delays and inefficiencies. 
• Customer Expectations - With the growth of eCommerce, customers expect real-time tracking, faster delivery times, and flexible delivery options. Meeting these expectations while keeping costs manageable is a major challenge. 
• Technological Adaptation - Carriers need to invest in new technologies like route optimization and automation to remain competitive. 

Impact of Technology on Carrier Operations

As technology continues to evolve, carriers who invest in innovation gain a competitive edge. Here are some ways new technologies are impacting carrier operations: 

• Route Optimization - Advanced technology analyzes traffic patterns and other factors to determine the most efficient route, minimizing traffic time and fuel consumption. 

• Real-Time Tracking - GPS and other tracking devices provide real-time location updates of orders, allowing carriers to monitor progress and accurately communicate delivery times to customers. 

• Fleet Management - Telematics systems monitor vehicle performance, fuel usage, and driver behavior. This allows for better fleet management and identification of areas for improvement. 

• Improved Communication - Digital platforms facilitate open communication between carriers, shippers, and customers enabling faster information exchange and issue resolution. 
• Automation - Digital paperwork and other automated systems streamline assignments and the documentation process, reducing administrative burdens and improving accuracy. 

Does choosing a carrier matter? 

Selecting the right carrier network is critical for ensuring smooth logistics, cost efficiency, and customer satisfaction. You aren’t just tied down to one carrier either, it is best to utilize a diverse range of carriers so that each shipment gets the service level that it needs. Here are some reasons why choosing the right carrier network matters:

• Cost Efficiency and Competitive Pricing - Different carriers offer varied pricing structures based on distance, load type, and service level. The right network will help reduce costs by optimizing routes and avoiding unnecessary surcharges. 
• Delivery Speed and Reliability - Not all carriers operate at the same efficiency level. A well-structured carrier will provide flexibility to meet demand spikes, ensuring on-time deliveries and fewer delays all year round. 
• Coverage and Service Area - A diverse carrier network will offer broad coverage, including regional, national, and sometimes even international shipping. Choosing carriers with strong last-mile capabilities will enhance customer satisfaction and speed up order fulfillment. 
• Risk Management - Weather delays, labor strikes, fuel shortages, and a number of other disruptions can derail supply chains. Utilizing a multi-carrier strategy provides backup options, reducing dependency on a single provider and mitigating risks. 
• Growth Support - As businesses grow, their logistics need to evolve. The right carrier will scale alongside your business, accommodating increased order volumes and new markets. 
• Specialized Handling - Some industries require specialized carriers with compliance expertise, reducing the risk of fines or damaged goods. 

Carriers play a pivotal role in the supply chain, and have the ability to affect efficiency immensely. Choosing the right carrier (or carriers) is essential for businesses in order to ensure smooth operations and maintain positive customer relationships. Need help with your logistics strategy, including choosing a carrier? Reach out to Brandfox today to see how we can help.