Understanding the Pros and Cons of Different Freight Carriers and Categories

There are so many factors to consider when choosing a shipping carrier and service for your ecommerce brand. You want to make sure your packages arrive on-time, accurately, un-damaged, and without issues. Plus, you probably don’t want to pay any more than you must to get quality shipping service.  

Every ecommerce company deals with this conundrum, which freight carrier to choose and which carrier services fits their needs the best. In your search choose the best carrier for your brand, you’ll want to weigh many factors to optimize your freight shipping:   

  • the region you are primarily shipping to  
  • the speed of delivery you need  
  • the type of tracking and quality assurance you require  
  • surcharges and service-specific fees you may be required to pay  
  • the appearance of how your product is packages when it arrives   

Answering these five factors will give you a map of how to choose the type of US freight carriers that will best serve you. Here is a list of the main types of freight carriers, the pros and cons of working with each.   

A quick note on surcharges and transportation costs: Each carrier will have a dozen common surcharges(FedEx and UPS have upwards of a hundred) you may incur. With the historic increase of small parcel shipping volume over the past two years, carriers have expanded their surcharges and increased the frequency at which they charge to account for their growing labor and infrastructure costs. Surcharges affect every carrier and service type differently. While surcharges are not mentioned in the list below, they have become a big factor you should weigh when choosing a shipping carrier.   

What are the Different Types of Shipping Carriers and Shipping Methods?

Asset-Based Carriers: UPS, FedEx  

Asset-based carriers own the equipment and infrastructure required to move shipments through then entire shipping journey —all the way to the customer doorstep. They work directly with shippers and are generally a more reliable, but potentially more costly shipping option. They definitely provide full truckload, or FTL, and some may have LTL services as well.   

Benefits of working with an asset-based carrier.   

  • Pricing consistency. Think of asset-carriers as the big-box shippers of the transportation industry. Your shipping costs may be a bit higher with them, but they will be more consistent than a smaller company.  
  • Quality consistency. Because they own and operate the entire shipping journey, they have more reliable service. Their claims ratio is usually lower, and customers often have higher satisfied.   
  • Greater transparency in tracking. Not all carriers provide much transparency for tracking shipments, but with an asset-based carrier, there will be no hand-offs (with the exception of UPS SurePost and FedEx SmartPost because those service get handed-off to USPS), so the tracking is more reliable than other carrier models.   
  • Multiple services offered. Asset-based carriers will most often help with multiple types of shipping like dropshipping, intermodal freight, and they also integrate with 3PL and other logistics support. They may also offer LTL (or less-than truckload) shipping more than other carriers.  

Downsides of working with an asset-based carrier.  

  • Less ability to scale quickly. In the recent two years there have been some major booms in ecommerce shipping. Asset-based carriers got hit the worst because of their finite supply of trucks and labor. If delivery times go down because of high volume overload, they have nowhere to send the extra volume.   
  • Not agile with market changes. When you own the amount of assets that these carriers do, it makes you less flexible to keep up with trends and market shifts. Technology might be a bit behind with some asset-based carriers. Or with the current labor market crunch, many carriers aren’t able to hire to fill the need and are slowly going out of business.   
Industry insight:

Recently, many merchants have been disgruntled by the rising transportation fees and surcharges. If you’re concerned that you’re overpaying in shipping fees, be sure you’re not missing some of the commonly overlooked transportation fees.

Consolidators: DHL, Pitney Bowes  

Non-asset-based carriers do not own the infrastructure to get shipments through the entire shipping journey. Consolidator are a type of non-asset-based carrier. They may own some trucks and facilities, but often they aggregate other shipping partners to complete part of the shipping journey. Most often consolidators give shipments to USPS to complete the last-mile of delivery 

Because USPS already has the infrastructure to ship to any address in the US, they are a great resource for carriers who do not want to invest in the assets to do the same. The Postal Service provides reliable, consistent and historically inexpensive service. Some carriers may use USPS for some services, but other regional carriers for other services. If you ship with a consolidator carrier, be sure you know which company you carrier outsources the last-mile to.   

Benefits of working with a consolidator.  

  • Greater ability to scale. In times of high volume, like peak season or an ecommerce surge, non-asset-based carriers have a wide network of partners to tap to complete shipments on time.   
  • Less expensive. Consolidators are able to keep overall service costs down by relying on USPS. The Postal Service has the lowest cost for most shipping services domestically. Note that shipping rates vary widely between services, not just carrier type.    

Downsides of working with a consolidator.  

  • Quality suffers. The more hands (or companies) that touch a single shipment, the larger the margin of error. It’s more common for packages to get lost, damaged, or delayed with a consolidator as opposed to an asset-based carrier. Consider this if quality is critical to your brand.   
  • Transit time sometimes suffers. With handoffs there are more opportunities for backups. Particularly within the USPS system. When the Postal Service gets overloaded with high volume, there’s not much to do but wait for them to process everything in time. Also, consolidators need extra time to sort their packages before “injecting” their packages into USPS distribution centers which can add a day or two.  

Regional Carriers: Lazership, WeShip   

Each regional carrier serves a specific section of the US. They are a great option if your products only need to go to a dedicated area. Golf accessories, for example have a higher concentration of orders in sunnier states like California and Florida.   

Some merchants piece together a few local carriers to extend their networks nationwide. It requires complex and detailed operations but can be worth it if it means cost-effective or more tailored services that fit your brand’s needs.   

Benefits of working with a regional carrier.  

  • They know the area best. Weather conditions, optimized routes, and seasonally fluctuations can get in the way of smooth transportation. A regional carrier will know the area best and be able to ship more efficiently and communicate expectations better.   
  • Often less expensive. Regional carriers don’t have as much overhead as the large asset-based carriers. You’ll pay for exactly the service you get, and nothing more (for the most part).  
  • Specialized services. Some offer services that other, larger carriers may not, including but not limited to white glove delivery, bulky items, alcohol and firearms, or custom delivery solutions.  

Downsides of working with a regional carrier.  

  • Limited scope of shipping. Obviously if your carrier only ships to a specific region, your products are limited to that area only.   
  • Lacking quality assurance. Regional carriers may rely on local, independent drivers, so the quality of the service and the transit delivery times can vary greatly. 
  • Susceptible to market fluctuations. Regional carriers are usually smaller companies, so any shifts in the industry may affect them more than the bigger national carriers. For example, the labor shortage has put some smaller carriers out of business entirely. COVID was harder for smaller carriers to adapt to, with less resources to implement new processes and manage employee’s out sick.    

Independent Operators: Amazon, Uber, Postmates  

There are many other shipping options that can be used in tandem with the above carrier types, or on their own. Independent shipping companies vary but with the recent boom in ecommerce, the industry is now full of independent carriers.   

Amazon is the most widely known and used. Merchants can choose to sell through the Amazon marketplace, and participate in any of their fulfillment options, Fulfilled by Merchant, Fulfilled by Amazon, Seller Central or Vendor Central.   

There are also crowdsourced shipping and delivery options for merchants to work with at a local level. Uber and Postmates are two of the most common. In this scenario, merchants can tap into a large pool of independent drivers (or “gig workers”) to pick up their product and deliver it to the customers’ doorstep. Some large brands and retailers, including Apple and Macy’s, are using these crowdsourced delivery services to offer same-day delivery.  

Benefits of working with an independent shipper.  

  • Customer satisfaction is not your problem anymore. Many independent shippers like Amazon and Uber will handle the customer relations for you. It’s often their brand name that’s on the line if anything goes wrong. This isn’t always the case though, so be sure you fully understand where customer complaints are directed.   

Downsides of working with an independent shipper.  

  • Packages won’t have your branding. Amazon ships all products in an Amazon box only. If you want your customers to have a very specific unboxing experience, working with certain independent shippers won’t get you that.   
  • Service is out of your hands. When you send your products to these independent operators, often operators who are not employed by the company, the way they deliver packages is completely out of your hands. If the Postmates delivery person is rude to your customers, you’ll likely hear about it but not be able to do much about it.   
  • Premium cost. Because these services are on demand, they are going to be the most costly.  

If you are seeking shipping support for you ecommerce business, reach out to DCL Logistics for a quote. We have a very experienced transportation management team who can rate shop the lowest cost shipping service, and right freight carrier for your brand.