Your entire supply chain could be vulnerable, and you might not even realize it. Placing all your shipping volume with a single carrier creates a critical point of failure. A potential strike, a natural disaster, or even just a shift in your carrier’s priorities can bring your operations to a halt. A multi-carrier strategy is more than just a backup plan; it’s a proactive way to build resilience and turn your logistics from a liability into a competitive advantage. Many businesses turn to consultants for help, and while there are many Shipware competitors, the core principle remains the same: you need a strategy that protects you from disruption. Here, we’ll outline the steps to build that resilient network.

Most shippers understand the potential disruption an August 1^st Teamsters strike at UPS would cause to their business, the economy, and UPS as a company. But have you considered the position your local UPS sales rep is in? Although drivers typically come to mind when you think of front-line workers, UPS reps are also considered front-line, customer-facing employees and are usually a shipper’s first call for anything related to pricing or service disruptions.

How a Strike Impacts Your Carrier Rep (And You)

Reps are a shipper’s main connection to the ivory tower that is UPS pricing. Having insight into your rep’s compensation metrics will help you determine whether or not your account is a priority to them. Priority accounts get taken care of from a financial and service perspective, while non-priority accounts tend to be pushed to the wayside. During times of uncertainty (like the threat of a Teamsters strike at UPS), carriers may change the way sales reps are paid, making it easier for them to lose certain accounts without negatively impacting their compensation. Although your rep would likely say, “All of my accounts are a priority,” the carriers create an environment where that is simply not the case. Like many things in business, the 80/20 rule tends to come into play. 80% of your rep’s commission comes from 20% of their book of business. Taking the time to understand where you fall on your rep’s scale is key to determining what leverage you have. In 2023, the realistic threat of a Teamsters strike has put all UPS reps in the unfavorable position of trying to ease fear amongst their clients without having their own fears addressed. (FedEx reps are in a much different position, having to prove to their employer that their wins will continue to produce revenue after the threat of a Teamsters strike is resolved.) UPS provides talking points that many reps assume are filtered and biased, but opposing opinions can be hard to find when living and working in their UPS echo chamber. Even among experts, opinions vary on the likelihood of a strike, but an honest conversation with your UPS rep would reveal that their livelihood could be harmed regardless of the outcome. And retaining your account may not be in their best interest, particularly if you’re not a “Shipper of Choice.”

Why Your Rep’s Pay Structure Determines Your Shipping Options

Regardless of their employer, understanding how your carrier rep is compensated on their book of business is crucial to establishing a mutually and financially successful relationship. Representatives selling to small- and medium-sized businesses are typically assigned a geographic territory. Where territories overlap, accounts are assigned by overall carrier spend. The rep receives a performance plan, with measures of success often mirroring the KPIs discussed on FedEx’s or UPS’s quarterly earnings calls, most commonly: 1) average daily volume, 2) average daily net revenue, and 3) average net revenue per piece. The specific measurements and the weights applied to them change yearly – or sometimes more frequently – giving reps a constantly moving target. This is not a coincidence. UPS and FedEx benefit from “complexity by design,” and they apply it both to the rates shippers pay and the way they compensate their account reps. The plans, like so many things within huge corporations, are determined by people sitting in cubicles far removed from the front lines and using opaque data. The output tends to be complex and, if you ask most reps, very optimistic about the potential for growth. Plus, it’s a time-consuming process, where forecasts are based not just on an account’s individual historical performance, but also on territory-level performance, projected growth of segmented industries, and black-box algorithms. These elements produce growth goals on an account-by-account basis that may not be reasonable but are also extremely difficult to challenge and change. The growth figure for each account is totaled to create the rep’s territory plan. How your account is performing to this plan either negatively or positively impacts your rep’s overall effectiveness. Anytime an announcement creates fear or uncertainty amongst shippers, the reps are expected to mitigate any potential fallout. The rep’s goal is to ensure their customers are comfortable with their current price, confident in the carrier’s service, and satisfied with the overall relationship. When an account diverts volume to a different carrier (or sometimes just moves to a different location outside the rep’s territory), the rep’s plan does not typically adjust. The forecasted production remains with the rep, becoming a deficit the rep is constantly trying to backfill.

Why Your Rep Might Want to Drop Your Account

During times of major market disruptions, carrier reps have reported the implementation of guaranteed commission structures. For example, when package volumes spiked during the Covid-19 pandemic, one former UPS sales rep reported that “[UPS] flat out said your sales plan has changed due to ‘market changes due to COVD’ and took $20-30k in commission right out of the pockets of their sales force.” Similarly, with the potential of an August 1^st Teamsters strike still looming, UPS may lock a sales rep’s commission at a specific dollar amount unrelated to their current performance. But it’s not all bad news for reps. In addition to locked commissions, carriers may make it possible to have specific accounts removed from a rep’s overall territory calculation, assuming the account would have a materially negative and unavoidable impact to the rep’s compensation. In these cases, if a shipper performing ABOVE the plan considers moving their business to FedEx due to the potential strike, it is still in the UPS rep’s best interest to work to retain the account. However, for an already struggling account, the unusual opportunity to offload the plan if they lose the account may mean that trying to save it may be more trouble than it’s worth. In fact, it might make more sense for a rep to fight to drop an account (and its associated plan) instead of actually trying to retain it, assuming the account meets strict qualifications. In our experience, UPS continues to lose shippers as we approach the August 1^st deadline. On a more granular scale, this means that each individual UPS rep is also losing customers that are currently affecting their overall KPIs and compensation, the consequences of which may be felt for a year or even longer. As shippers do their own due diligence, transportation analysis, and mitigate their own risk from a potential strike by pursuing other operational plans and carrier diversification, the reps are adjusting everything within their power to protect their compensation. Unfortunately, due to the rules the carriers impose, this isn’t always in the best interest of the shipper or the rep’s compensation. Most carrier reps understand the business realities at play. The threat of a Teamsters strike may lead shippers to reach out to alternative carriers they were unwilling to consider in the past. Despite years spent building relationships of trust with their clients, it is inevitable that their compensation will be negatively impacted for reasons outside their control. In normal times, reps would typically be upset over any loss of business but would have a clear path to recovery. Winning a new account away from a competitor, or even organic growth within their existing book of business, may be enough to replace the loss. With the potential of a strike, even with the potential for locked commissions and plan adjustments, that path becomes difficult to see. Even worse, most current reps have heard horror stories from colleagues about the previous strike and the time it took to recover.

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The Strategy of Carrier Diversification

Relying on a single carrier is like putting all your eggs in one basket—it’s a risky move that can leave your supply chain vulnerable. The smartest approach is to build a resilient shipping strategy through carrier diversification. This isn’t just about having a backup plan for emergencies; it’s a proactive way to optimize costs, improve service levels, and maintain control over your logistics, no matter what the market throws at you. By strategically spreading your volume across multiple providers, you create leverage and flexibility that a single-carrier relationship simply can’t offer. It’s about turning your shipping operations from a potential liability into a competitive advantage.

Beyond a Reaction: Carrier Mix Optimization (CMO)

Carrier Mix Optimization (CMO) is the formal term for strategically using several shipping carriers instead of just one. This approach helps you reduce risks and get the most out of your shipping spend. Think of it as a long-term strategy, not just a knee-jerk reaction to a potential crisis like a carrier strike. As we’ve seen, during times of uncertainty, carriers might change how their sales reps are paid, making it easier for them to lose certain accounts without a negative impact on their compensation. This is a stark reminder that your business’s priorities and your carrier’s priorities don’t always align. A well-planned carrier diversification strategy ensures you’re never left scrambling and always have options that serve your best interests.

Potential Challenges of a Multi-Carrier Approach

Of course, moving to a multi-carrier strategy isn’t without its complexities. Juggling different contracts, coordinating multiple daily pickups, and processing invoices from various providers can feel overwhelming at first. There’s also the valid concern that by splitting your volume, you might dilute the discounts you receive from your primary carrier. While these are real challenges, they are manageable with the right approach. The key is to ensure your diversification strategy is based on solid data, not guesswork. Understanding your shipping profile inside and out allows you to allocate volume intelligently, so the benefits of flexibility and risk mitigation outweigh the potential loss of a volume-based discount. This is where expert contract optimization becomes critical to ensure you’re getting the best terms from every carrier in your mix.

Types of Alternative Shipping Carriers

Once you’ve decided to diversify, the next step is to understand the landscape of available carriers. Your options extend far beyond the two big names that usually come to mind. From global giants and national postal services to nimble regional players and specialized freight handlers, there’s a whole ecosystem of providers. Each type of carrier has unique strengths, and the ideal mix depends entirely on your specific shipping needs, customer locations, and product types. Exploring these alternatives is the first step toward building a more robust and cost-effective shipping network that can adapt to your business as it grows.

Major Carriers by the Numbers

The major carriers are the household names that dominate the global shipping industry. Their extensive networks, massive fleets, and comprehensive service offerings make them a go-to for many businesses. While they are often the primary carrier that shippers look to diversify *from*, they can also be part of a diversified strategy, especially for their international reach or specific service levels. Understanding their sheer scale helps put the industry into perspective and highlights why having alternatives is so important—no single entity should have that much control over your operations.

UPS

United Parcel Service (UPS) is a titan in the logistics world, with annual revenues of around $97.3 billion and a workforce of 534,000 employees. Its iconic brown trucks are a familiar sight, and its global air and ground network is one of the most extensive on the planet, making it a foundational carrier for countless businesses.

DHL

Often recognized for its strong international presence, DHL is another global powerhouse, generating approximately $90 billion in annual revenue with a massive team of 590,000 employees. For businesses shipping across borders, DHL’s expertise in customs and international logistics makes it an essential component of a diversified carrier mix.

USPS

The United States Postal Service (USPS) is a key player, especially for ecommerce businesses, with annual revenues of about $77 billion and 630,000 employees. The USPS is particularly competitive for lightweight, residential deliveries and last-mile service, often providing the most cost-effective solution for certain package profiles.

Regional Carriers

Don’t overlook the power of regional carriers. Companies like Better Trucks and OnTrac specialize in providing service within a specific geographic area, and they often do it faster and for a lower cost than the national players. Integrating a regional carrier into your mix is a perfect example of smart modal optimization. You can use them for deliveries within their service footprint to save money and shorten transit times, while still relying on a national carrier for shipments going to other parts of the country. This hybrid approach allows you to get the best of both worlds: the targeted efficiency of a regional expert and the broad reach of a national network.

Freight and LTL Specialists

If your business ships larger items, pallets, or anything that doesn’t fit neatly into a standard parcel box, you need a freight specialist in your corner. Less-Than-Truckload (LTL) carriers like XPO Logistics are designed to move shipments that are too big for parcel services but don’t require a full truck. Trying to force freight through a parcel network is inefficient and expensive. By partnering with an LTL specialist, you gain access to the right equipment, handling processes, and pricing structures for your larger goods. This ensures your products arrive safely and cost-effectively, without paying for services you don’t need.

Third-Party Logistics (3PLs)

For some businesses, the best approach is to bring in a partner to manage the entire supply chain. Third-Party Logistics (3PL) providers, such as C.H. Robinson, can handle everything from warehousing and inventory management to fulfillment and transportation. They leverage their industry expertise and carrier relationships to manage your logistics for you. However, using a 3PL doesn’t mean you can set it and forget it. It’s still crucial to ensure the terms of your agreement are favorable and that the 3PL is delivering real value. Engaging in 3PL contract optimization can help you verify that you’re getting the best possible service and rates from your logistics partner.

What Happens When Your Rep Becomes a Delivery Driver?

There are many differences between the labor challenges in 1997 and 2023, however, 26 years after the first Teamsters strike, many shippers are still questioning how UPS will minimize any potential disruptions. Unfortunately for UPS sales reps, they are part of this answer. Beginning in the peak seasons of 2017 and 2018, UPS introduced Personal Vehicle Drivers, or PVDs. Operating out of their own vehicles, PVDs focus mostly on residential deliveries during the holidays, driving unmarked cars and wearing some sort of UPS badge, but not typically the full unform. A PVD driver could be a seasonal hire, or a UPS management employee with little-to-no training in an operation being pulled away to do something other than the work they were hired to do. Sales is considered management, so this may include your account rep. UPS management employees are salaried, so this additional work is expected. This creates frustration amongst the sales force as they are thrown into the operation to assist, while also being held accountable for their sales performance. No one is handling your account while they are away. This is not ideal for anyone involved. If the Teamsters strike on August 1^st, expect UPS to utilize PVD’s during the union stoppage time, both temporary outside hires and existing UPS management. FedEx recently held their Q4 Fiscal Year ‘23 earnings call. They discussed whether or not FedEx Corp. planned to win more volume due to the uncertainty caused by the UPS and Teamsters contract. At the corporate level, they were not planning to benefit from this uncertainty, but they acknowledged that it had opened doors to some long-time, legacy UPS accounts. Many sales reps, however, might describe this differently. UPS sales reps continue to lose customers due to this uncertainty, and unless these shippers are moving to a regional carrier or postal consolidator, a FedEx rep is benefiting. Each shipper has unique needs that factor into how they choose to address the current uncertainty, and they may have more control over their shipping outcomes than they currently understand. An informed relationship with the carrier rep is arguably one of the most influential factors a shipper can leverage to ensure satisfaction with their carrier. Having insight into the motivations of your carrier rep will help you avoid undesirable long-term consequences, regardless of the outcome of the Teamsters negotiation.

The Role of Technology in Managing Shipping

In a complex shipping environment, relying on manual processes and spreadsheets is like trying to navigate a highway blindfolded. Technology is the key to gaining clarity and control over your logistics operations. Using the right shipping management software, like a Transportation Management System (TMS), gives you the data-driven insights needed to make smarter, faster decisions. It helps you automate carrier selection for each package, ensuring you get the best rate every time. More importantly, it provides a centralized platform for tracking, reporting, and analysis, turning a flood of shipping data into a clear picture of your spending and performance. This visibility is crucial, especially when market disruptions force you to pivot your strategy quickly. Without a solid tech foundation, you’re essentially guessing, which can be a costly mistake.

Using a TMS for Carrier Selection and Management

A Transportation Management System (TMS) is a powerful tool that automates much of the heavy lifting in logistics. Instead of manually comparing rates and services for every shipment, a TMS can automatically select the most cost-effective carrier based on your predefined rules and real-time data. This not only saves time but also consistently lowers costs. Beyond rate shopping, these systems are vital for managing a multi-carrier strategy. They provide a single dashboard to track shipments across different providers, monitor performance, and generate detailed reports. This level of oversight allows you to see which carriers are meeting their service-level agreements (SLAs) and where you can make adjustments to improve efficiency and reduce your overall shipping spend.

The Importance of Auditing and Data Analysis

Before you can optimize your shipping, you need a deep understanding of your current operations. This starts with a thorough analysis of your shipping data. You need to know what you ship, where it goes, and exactly what you’re paying for it. This detailed review often uncovers hidden costs and inefficiencies that can be immediately addressed. For instance, many businesses unknowingly miss out on significant refunds from late deliveries or billing errors. A consistent invoice audit and recovery process can reclaim this lost revenue. This initial data dive is the foundation of any successful shipping strategy, highlighting where a new carrier or a renegotiated contract could have the most impact.

Actionable Advice for Shippers

Understanding the challenges and opportunities in the shipping world is one thing, but taking concrete steps to improve your position is what truly matters. You don’t have to be a passive participant in your relationship with carriers. By taking a proactive approach to your contracts, invoices, and overall carrier strategy, you can build a more resilient and cost-effective logistics operation. It starts with a willingness to question the status quo and look for areas of improvement. Whether it’s scrutinizing your agreements or exploring new partnerships, there are practical actions you can take right now to gain more control over your shipping costs and services, especially during times of market uncertainty.

Conduct a Thorough Contract and Invoice Audit

Don’t make the mistake of sticking with a single carrier out of habit. Spreading your volume across several companies—like UPS, FedEx, DHL, and regional carriers—gives you the flexibility to find the best price and service for every shipment. But diversification is only half the battle. Carrier contracts are notoriously complex and often written to benefit the carrier, not you. It’s essential to have an expert review your agreements to ensure you’re not being overcharged and are receiving the best possible rates. A professional contract optimization can uncover unfavorable terms and identify opportunities for significant savings that you might have missed, putting you in a much stronger negotiating position.

The Broader Logistics Competitive Landscape

The shipping industry is more dynamic and competitive than ever before. For high-volume shippers, this is fantastic news. The rise of new carriers and the expansion of existing ones means you have more choices and leverage than you might realize. This competitive pressure forces carriers to offer better rates, more flexible services, and innovative solutions to win and retain your business. Understanding this broader landscape is key to developing a smart shipping strategy. It allows you to look beyond the big two carriers and explore a diverse mix of national, regional, and specialized providers to build a logistics network that is truly optimized for your unique needs, budget, and customer expectations.

Container Shipping

The entire shipping market, from small parcels to massive freight containers, is buzzing with competition. An increasing number of new and improved carriers are entering the space, creating a more favorable environment for businesses. This heightened competition directly translates into more options and better deals for you. When carriers have to compete for your business, they are more willing to negotiate on price, offer better terms, and provide higher levels of service. This market dynamic empowers you to seek out alternatives and diversify your carrier mix without sacrificing quality, making your supply chain more resilient and cost-effective in the long run.

Contract Logistics

Today, businesses have a wealth of choices for managing their shipping and logistics. Whether you need help with parcel tracking, international shipping, or organizing your entire supply chain, there’s a solution out there. This includes working with third-party logistics (3PL) providers who can manage warehousing and fulfillment, or partnering with consultants who specialize in reducing costs. The key is knowing that you don’t have to handle everything on your own. Leveraging external expertise can help you navigate the complexities of the industry, from carrier diversification to contract negotiations, ultimately saving you time and money while improving your overall logistics performance.

Frequently Asked Questions

My carrier rep and I have a great relationship. Why would their priorities not align with mine? Even the best carrier reps are guided by their company’s compensation plans. These plans often have complex, shifting goals for volume and revenue that are set by people far removed from your day-to-day business. During market disruptions, like a potential strike, carriers might change these plans or even guarantee a rep’s commission. This can create situations where it’s actually better for your rep’s bottom line to let your account go, especially if you’re not one of their top-performing clients. Their personal success is tied to a formula, and that formula doesn’t always match up with what’s best for your business.

I’m concerned that splitting my shipping volume will make me lose my primary carrier discounts. Is that a valid worry? This is a common and completely valid concern. It’s true that high volume often leads to better discounts. However, a smart multi-carrier strategy isn’t about randomly splitting packages; it’s about strategically allocating them. A thorough analysis of your shipping data can reveal opportunities where using a regional carrier for certain zones or an LTL specialist for larger items saves you more money than the volume discount you might dilute. With expert contract optimization, you can secure strong terms with multiple carriers, ensuring the benefits of resilience and flexibility outweigh any minor changes in volume-based pricing.

Managing multiple carriers sounds like a lot of work. How can I handle the extra complexity? You’re right, juggling different pickups, tracking systems, and invoices can be a headache if you try to do it all manually. This is where technology becomes essential. A Transportation Management System (TMS) can automate the entire process by selecting the best carrier for each shipment based on your rules for cost and transit time. It provides a single dashboard for tracking and reporting, which turns a complicated process into a manageable one. This gives you all the benefits of diversification without the administrative burden.

Beyond the big national carriers, what types of providers should I consider for my shipping mix? The best mix depends on what you ship and where it’s going. Regional carriers are fantastic for lowering costs and speeding up deliveries within a specific geographic footprint. If you ship items that are too large for standard parcels, you absolutely need a Less-Than-Truckload (LTL) specialist in your network to handle freight efficiently. For some businesses, partnering with a Third-Party Logistics (3PL) provider to manage warehousing and fulfillment can also be a strategic part of the puzzle.

What’s the first practical step I should take to build a multi-carrier strategy? The first step is to get a crystal-clear picture of your current shipping operations. This means conducting a deep analysis of your shipping data and a thorough audit of your carrier invoices and contracts. You need to know exactly what you’re shipping, where it’s going, and what you’re truly paying for it, including all the surcharges and fees. This initial data review will immediately highlight your biggest areas of risk and your greatest opportunities for savings, giving you a solid foundation to build upon.

Key Takeaways

Build a Resilient, Multi-Carrier Network: Don’t leave your supply chain vulnerable by relying on a single shipping provider. A diversified strategy using national, regional, and specialized carriers protects your business from disruptions, gives you more negotiating power, and helps you find the best rate for every shipment.
Know What Motivates Your Carrier Rep: Your representative’s advice is shaped by their compensation plan, which doesn’t always align with your best interests. Understanding this dynamic, particularly during market uncertainty, gives you a critical advantage in service discussions and rate negotiations.
Use Audits and Tech to Reduce Costs: Take direct control of your shipping spend with two powerful actions. First, conduct a thorough audit of your contracts and invoices to find and recover hidden costs. Second, implement technology like a Transportation Management System (TMS) to automate decisions and gain clear visibility into your shipping performance.