Supply Chain Discussion: The Rise of Alternative Carriers in the Supply Chain

https://vimeo.com/1165362605

In this discussion, Russell Goodman from Supply Chain Brain speaks with Joshua Haun, vice president of business development at UniUni.

He explains that as the use of alternative carriers increases, carrier diversification is the new norm in supply chain.

Haun believes the growth of alternative carriers was inevitable, given the number of rate increases imposed by traditional carriers, not to mention the disruption in the industry caused by international shippers, especially online retailers.

“It’s just not economical anymore for many shippers. You've got these alternative carriers that are popping up trying to offer a more economical solution, very similar to what Amazon had previously done for Amazon itself. They’re offering a cost-effective solution to help retailers better compete within their own industries. And it's significantly helpful for e-commerce as well.” - Joshua Haun

He also acknowledges that there was an initial hesitancy among many shippers to use alternative carriers for fear that they weren’t as reliable as, say, UPS or FedEx. In reality, he says, those entities can sometimes “offer an even better solution.”

For example, Haun notes that traditional carriers scale up for peak seasons, such as Christmas, but might have difficulty doing so for holidays such as Valentine’s Day or Mother’s Day, which are growing in popularity for gift-giving. Alternative carriers are much more dynamic and flexible since they’re asset-light, he claims. “[They] can scale up any time of the year across the entire country, wherever [they] see demand at a cost that's significantly lower than bringing on additional leased vehicles or being asset-heavy.”

“There used to be a saying that nobody ever got fired for using FedEx or UPS,” says Haun, “but as alternative carriers become more prevalent in this space, the hesitancy to use them is going to go away.” He believes those competitors will “become the new norm, and I think we're already starting to see that now.”

Source: Supply Chain Brain