When Dan brought up how innovation tends to occur across an industry when smaller players (like regional carriers) come in and begin to take a larger share of the market, Nate made some excellent points on the subject.

“Regional carriers, alternative carriers, are more prominent in the market. And so these solutions can enable many new portfolios of carriers relatively quickly with retailers. And so again, that increases the access, the ability for a retailer to be very specific about the partners they work with and not have to go through a whole technical IT project,” he said.

But Nate followed that statement with a caveat: “In my opinion, technology can still be a barrier sometimes on the retailer side, to enable some of these regional carriers. Because they don't have the (multi-carrier) solution in place.”

Josh wanted to dig a little more into Nate’s experience with shippers who are experiencing technological barriers to using regional carriers.

“If you’re trying to justify a technical project with cost savings, that can happen sometimes, enabling other carriers so you can presumably reduce cost by moving volume to them. But if that's the only way that you're going to get a project justified? That doesn't always happen. And so being able to, I think, position things to where there are other benefits of enabling multi-carrier regional carriers. If it's more consistent service, more reliable, faster delivery, presumably some increased customer experience benefit there. It's a little difficult sometimes to quantify that, but that has to be part of the discussion. Because if it's only cost, then you've got one option, the math doesn't work, then your project doesn't get approved, or if it does, it's lower priority,” answered Nate.

“We do face some of those challenges sometimes with clients, and we do whatever we can on our side to kind of break through those challenges, if you will. I also think that you know, there's sometimes certain technology that we can build internally to help those clients. And I think that that makes a big difference as well,” responded Josh.

Dan asked Josh and Nate about the themes they’re seeing in technology in the parcel space this year.

“Providing very clear, precise estimated delivery dates to customers when they're browsing. Fast delivery, even if you could offer it for low cost or for free, doesn't really have that much value if the customer doesn't know it while she's trying to make a purchasing decision. So I think that's one where the technology is there on the provider side, a lot of times, there's a little bit of challenge on the retailer side, of having the ability to know where their inventory is and where they want to ship it from. So if that's solved, that opens up, I think, a lot of value for some of the regional carrier services that are faster, final mile, things like that,” said Nate.

“We've seen that there's a lot of opportunity to improve the delivery experience to the client. So whether that's texting like, you would get a text or a notice message from Uber or DoorDash when an order is on the way, you know, we have that same technology. We know exactly where the package was dropped based on coordinates that we received from the driver’s phone. And I don't think the national carriers are doing that today. Some are starting to take pictures of deliveries; we've been doing that since the beginning, I think that makes a big difference in terms of buying adaptation into using regional carriers. And I think that is a true differentiator,” said Josh.

When Dan brought up UPS strike threats, Nate, having been through this from the retail side and having advised clients on this sort of situation, had three points to make, noting that the situation should dictate a shipper’s response.

“If a retailer already has several carriers in place, let's just say UPS is their primary but also a lightweight package carrier, and maybe one or two regionals. Presumably, they've got the ability, technology, and otherwise, to add more carriers if they need to or move some volume from UPS to existing carriers. Those are the ones, I think, that are obviously in a better position and should have probably already had that plan developed months ago, and it should be time-bound. If you're within X number of days and there isn't an imminent agreement here, then go ahead and execute those negotiations that they probably have already had or are now having with other carriers,” he stated first.

"If you're a single source with UPS, it's really an entirely different discussion. I can't think of a scenario necessarily where I would advise a company to move all the volume just because of the potential strike. But there's also a higher degree of risk for that company. And so that, to me, actually, is the risk of this type of event in the market, which would have a huge impact. It should force those types of companies to rethink their overall approach to carrier sourcing,” he noted second.

“Last thing I would say is the existing customers of UPS, they should be already talking with UPS about this potential issue,” he stated, noting that customers would have to find balance between UPS’s positive outlook on the situation and the union’s standpoint.

As Josh noted, whether there is a strike or not, just the threat alone has led to some change already in the industry.

“There has already been some damage done because some exclusive UPS shippers or other shippers, in general, have reached out to us that we had not talked with previously and said, Hey, we're looking at mitigation efforts. We're looking into using Better Trucks because we don't know what's gonna happen with UPS. And even if there is no strike, we want to start the exploratory conversation,” said Josh.

Moving on from uncertainty at one portion of the duopoly to uncertainty at the other, Dan brought up FedEx’s ambitious restructuring plan, with the network restructuring set to be completed by the summer of 2024. While both Nate and Josh agree that the restructuring was necessary and will be valuable, the timeline was a concern, but they both see the move as ultimately a step in the right direction.

“So I think, really, there's a lot more questions than answers, but I think particularly on the timeline. Either the timeline moves out or, if it doesn't move out, I guess, there's probably a higher risk of service issues. Just kind of growing pains along the way,” said Nate.

“A lot of companies in the transportation realm have gone through large scale integrations, mergers, whatever it is that you want to refer to it as, and they've been successful. Maybe the timeline here is a little ambitious, but, you know, from my standpoint, it can definitely be done. And I think, at the end of the day, it'll probably be a win for the client, for the customer. And that's my hope for the industry,” said Josh.

When Dan asked the pair whether they believe the changes national carriers are making are being influenced by regional carriers, both Nate and Josh agreed.

“A lot of what I think FedEx is trying to shed here is having multiple facilities or multiple trucks doing the same thing and going to the same areas that they're in every day. Instead of having two trucks in the same neighborhood, though, have one truck. And, you know, that makes a lot of sense,” said Josh, expounding on how a more streamlined network makes sense whether you’re a regional or national carrier.

Nate pointed out that the changing nature of the parcel industry as a whole predicated this move.

“Also, and this isn't just FedEx or UPS or the regionals in the market; ground service is a lot faster than it was years ago. That decreases the need for the heavy amount of infrastructure on the Express or air side for FedEx, which then really drives the need to take out redundancies from the network. But as there's more value in a grounded product, then you really have to examine the Express network and try to reduce the operating costs of that network,” said Nate.

Despite a softening market and lower overall volumes, both Nate and Josh had good ideas on things to be excited about in the parcel industry.

“I think, really just advising a lot of parcel shippers not to be too conservative and just hunker down and kind of ride it out and try to reduce expenses, to really maintain or create that focus on taking control of your program, even in a difficult environment like this. I think that's great,” Nate continued.

For Josh, the softening economy just presents new creative challenges in how Better Trucks can help their various customers. “From my standpoint, it's kind of thinking about where there's an ability to optimize, where there's opportunity to kind of think outside the box about ways to solve problems; that’s what really excites me most about this year and going forward in our industry,” said Josh.