Learn what’s driving regional carrier growth and how advanced shipping software can help businesses leverage the benefits

For many people, when they think about parcel and freight carriers, their mind goes straight to the big players like UPS, FedEx, or even the USPS. For decades, these logistics giants have played a major role in shaping how businesses ship and how consumers receive their items. But if one thing is certain, the shipping landscape is always shifting, including the carriers transporting goods. Factors like rising surcharges, capacity constraints, and growing customer expectations are pushing shippers to look for alternatives where the major players might not be measuring up.

While regional carriers may have previously been viewed as second-tier providers, these smaller carriers have continued to gain traction by offering competitive rates, faster delivery times in specific markets, and levels of flexibility the national networks can’t always reach. Because of this, regional carriers have emerged as a strategic advantage for many shippers today.

As this shift towards regional continues, shippers are creating a smarter, more resilient logistics strategy that cuts costs, boosts their reliability, and broadens their carrier options. In this blog, we’ll dive deeper into why regional carriers are gaining popularity, what sets them apart, and where they fit into a modern multi-carrier shipping strategy.

The Rise of Regional

While regional carriers aren’t new to the market, their role in the shipping ecosystem has significantly evolved over the last several years. Regional carriers focus their operations within a specific geographic area, oftentimes a single state or a small group of neighboring states. While the more prominent national carriers like the USPS, UPS, and FedEx have a broader coverage, delivering in a defined area allows regional carriers to provide faster transit times, lower shipping costs, and even add more personalization to the delivery experience.

In 2024, parcel volumes grew to a record high of 23.8 billion. That number is a 4% increase from the year before and a 50% increase from back in 2019. Additionally, in a 2024 parcel shipping report, it was found that the biggest surge in carrier parcel volume was attributed to smaller carriers who experienced a YoY growth in volume of 22.6%. This is significant compared to the YoY parcel volume growth of 3.2% for USPS, 1.7% for UPS, and –3.6% for FedEx.

Regional carriers continue to steadily expand their market share in both parcel and freight, demonstrating not only the demand for their services, but also the trust shippers have gained with these providers. Some of the biggest factors driving this growth include:

• E-commerce growth: The rise in e-commerce has increased demand for faster, more affordable shipping, pushing businesses towards alternative carriers.
• Cost-efficiency: With rising surcharges and rate hikes from national carriers, shippers are finding far more attractive prices with regional carriers.
• Advancing technology: Software integrations to shipping platforms have allowed shippers easier access to regional carriers and enabled these smaller carriers with the same tracking and visibility tools today’s consumers demand.
• Capacity constraints: Major carriers can struggle with capacity issues during high-volume seasons like holiday peak, giving regional carriers the perfect opportunity to step in and offer their services.

For many businesses, these regional carriers have become a key component of their shipping strategy, helping them keep costs low and customers satisfied.

How Shippers Benefit from Regional Carriers

Now that we know the reasoning behind the growth in the market, let’s explore the key factors attracting shippers to adopt regional carriers into their strategy:

• Lower costs: Compared to national carriers, regional carriers typically offer lower base rates, fewer add-on fees, and more flexible pricing models. This makes them more attractive to shippers looking to reel in their transportation spend without taking a hit to their service quality.
• Reliable service: With a focus on a smaller, specific geographic region, regional carriers may have more familiarity with the area. This helps them provide more consistent and timelier deliveries as well as better package handling, especially in more populated metro cities.
• Flexibility: Smaller carrier companies aren’t commonly held to the same network-wide rules and regulations national carriers abide by, giving them more flexibility to make quick changes and adapt to fluctuating volumes, alternate routes, and delivery requirement adjustments.
• Customer experience: An exceptional customer experience is often tied to quick deliveries, real-time tracking, and fewer package handoffs. Regional carriers offer businesses a local service that provides faster deliveries and an overall better experience for the end customer.

Considering each of these benefits, it’s apparent why businesses continue to diversify their shipping strategies outside of the big national players. Cost, reliability, and flexibility make a major difference for businesses; however, technology is the key factor that makes regional carriers more accessible and easier to use.

Technology’s Role in Regional Carrier Growth

For years, the major national carriers have had a clear advantage when it comes to technology. These larger companies have typically had more access to abundant resources and funding to build and implement advanced technological tools such as tracking and automated billing that smaller carriers did not. This gap has made it challenging for regional carriers to compete, even with the significant benefits they offer.

However, this gap has narrowed over time. With more technology solutions available and greater investment in modern tools, regional carriers now offer real-time tracking, automation, API connectivity, and other advanced features that put them on par with their larger counterparts. This allows today’s customers to access the same transparency and level of communication they expect from carriers like UPS or FedEx.

Taking it one step further, access to data and analytics enables shippers to measure key performance metrics like cost per shipment and service quality, making it easier to evaluate regional carriers on the same level as national ones. Combining these advanced capabilities with multi-carrier shipping software (MCSS) makes it easy for businesses to connect these carriers to their existing systems, simplifying and streamlining their shipment management within a single platform. With the right technology, regional carriers can be leveraged as strategic partners to take your transportation operations to the next level.

Maximizing Carrier Efficiency with Multi-Carrier Shipping Software

Diversifying your shipping strategy by incorporating regional carriers can strengthen your shipping strategy, but without the right software, managing multiple carriers can turn into a massive headache. Keeping track of different contracts, carrier requirements, and other carrier-based specifics can create operational inefficiencies and leave more room for error. Advanced multi-carrier shipping software is an essential tool for keeping everything cool, calm, and collected.

MCSS acts as a centralized platform for shippers to manage all of their carriers from a single interface. Here, businesses can perform daily tasks from comparing carrier rates to printing labels and selecting the optimal carrier for each shipment. These advanced shipping software solutions also account for each carrier’s unique requirements, ensuring each shipment is compliant, reducing potential delays and additional fees.

In addition to daily tasks, advanced MCSS platforms give shippers access to valuable data and reporting dashboards, allowing them to track performance metrics across carriers, identify key trends, and manage costs to optimize operations. For businesses, implementing a comprehensive solution like multi-carrier shipping software can make integrating regional carriers into your logistics strategy simple, allowing shippers to experience the growing benefits we’re seeing with these smaller carriers today.

Level Up Your Carrier Strategy with Varsity Logistics

Built for handling both parcel and freight shipping needs, Varsity Logistics is the only holistic multi-carrier shipping solution designed for the IBM i (AS/400) Power Systems. Better than anyone else, we understand the challenges of managing multiple carriers across parcel and less-than-truckload (LTL).

With seamless integration to all the leading carriers across North America as well as a variety of regional and other specialized carriers, Varsity offers streamlined access to best-in-class delivery services to help shippers reduce costs, boost efficiency, and exceed customer expectations. Our advanced solution empowers shippers to streamline workflows by automating key tasks like rate shopping, label printing, shipment tracking, and load planning, while simplifying each step of the shipping process.

Backed by a team with decades of parcel and freight expertise, Varsity Logistics has helped some of the world’s top brands lower costs, improve delivery performance, increase flexibility, and optimize their logistics operations. Whether you want to integrate regional carriers, cut costs, or strengthen your customer experience, contact our team or schedule a pressure-free demo to explore how Varsity can provide top-tier resources and support to help you achieve your shipping goals.