National vs Regional Carriers: There’s No Need to Choose

It’s long past time that we address the National vs Regional LTL carrier ‘perception’ problem.

These national giants (FedEx, Estes, R&L, ABF, Old Dominion, and SAIA) will lay heavy recruiting pitches on why their model is the ‘end-all be-all’ for procuring your freight, that they alone are your ‘one stop’ solution.

They may even say something like ‘we cover 99% of the US including Hawaii and Alaska’, but they simply use ‘partner carriers’ aka regional carriers to deliver in a lot of those markets.

Meanwhile, smaller regional carriers may not have the same marketing budget but OFTEN have better service and speed.

If you’ve read any of our past articles, you know that we favor a ‘blended’ approach to logistics and we’re sticking to that line on this topic as well -

For nationwide operations with 2-3 DCs/Warehouses, you should have (at minimum) 2 National carriers and 2-3 regional carriers in your stable.

It's all about finding the right mix to maximize performance. One size doesn’t have to fit all (because at the end of the day…’one size’ doesn’t fit all).?

Why Regional?

Why should shippers go out of there way to find regional partners?

They're Cheap(er) - With concentrated freight density in their service areas, regional carriers can price very competitively compared to their national rivals.?

That pricing edge? Freight spend kept in your pocket.

They Service DIRECT- If you spend enough time in LTL, you will know the pain of being ‘duped’ by an estimated transit time in the TMS -

only to find out that the national LTL carrier you used ‘partnered’ this shipment off to a local carrier…and it delayed the delivery by a couple of days.

Regional carriers only service a 2-day area (typically), and they very very rarely partner off to another carrier (that would be their competitor if they were partnering it off to another local carrier).

Quick Turnaround Times - Having a shorter length of haul, regional providers can offer expedited transit times unavailable to the long-haul national carriers servicing the same lanes.

BUT even with that said, regional carriers do have their limitations...

1. Tracking… or lack thereof: Not all regional carriers have API dispatch and API tracking documentation and it limits the visibility and also creates a bit more work to schedule pickups and check on pickup status.
2. Capacity in a tight market: If the market is HOT and you need drop trailers or have a ton of freight moving a short period of time, regional carriers tend to get a bit overwhelmed and they have less equipment to ‘spare’ in the event you need trailers spotted each day.
3. Multiple points of contact: If you are going direct to 4 or 5 regional carriers (to cover the US) you will have multiple contracts, tariffs, sales reps, levels of service, and billing terms/setups.

(If you use a TMS that helps you manage these tariffs and consolidates the tracking and invoice auditing, you will love LTL again - I know a guy. (in case you need an intro).

So…Don’t Let Go of National Heavyweights

Even through all the perks regional carriers offer, there are several reasons the national LTL carriers retain their magnetic appeal:

‘One-Stop’ Shop - National carriers provide seamless integrated networks capable of handling freight from coast to coast. One company to pay, one throat to choke, one system to book orders in.

Pricing Leverage- Bundling all your spend with 2 national carriers give you significant pricing power in the ‘short term’

(just gotta watch out for those pesky GRIs over a 3-4 year period.. They catch up with ya).

Depending on your freight profile, going all in with 2 national carriers can get you some nice ‘perks’ (FAKS, waived accessorials, waived inspections/reclass fees etc.).

Technology- The big boys are currently doing a pretty good job with API’s. Dispatch, Tracking, and Document retrieval make day to day operations a lot easier than manually tendering loads and calling in for tracking updates etc.

My best tip? Use at least 2 national carriers at all times so that you can pit them against one another to fend off increases on an annual basis. In today’s market, this approach will save you a significant % on your LTL spend.

INSTEAD: Blend it, Baby

At the end of the day, maximizing your LTL spend means taking advantage of the strengths that BOTH regional and national carriers offer. Don't just default to one or the other.

Putting together the right portfolio of regional and national providers can enable you to find the ideal mix created through analysis of your specific freight characteristics.

Said another way: have your cake, and eat it too.

And then if you decide to change flavors of cake, you can easily slot in a new regional or national player without disrupting your operations.

It's time to look beyond any rivalry between the two and recognize how regional and national carriers can actually complement each other.?

Have you started fully optimizing your LTL sourcing strategy? Or are you looking to strengthen your LTL carrier portfolio? Our team is happy to provide you with an LTL Pricing & Routing Analysis to identify opportunities for improvement when it comes to your LTL. Shoot us a message and let's take a look at your portfolio!

This article was collaboratively written by “LTL Observers” - a collective of industry veterans spanning the carrier, shipper, 3PL, and tech provider spaces who are willing to report their findings and share opinions.

Want to get involved with these opinions we release? We'd love to add you to the line-up to ensure we include a diverse set of LTL observers. Contact us today.