[#304-Appendix] DTC parcel provider selection in the US

Welcome to “Supply Chain in Numbers”. This newsletter tracks significant numbers from the supply chain world. Primarily, this newsletter publishes five prominent numbers every Monday. In this “Appendix” post (published on Thursday), one of the numbers from the week is used to illustrate more interesting points.

In this week’s Supply Chain in Numbers newsletter, one of the numbers was from OnTrac’s announcement of a cheaper parcel offering. Here is what I wrote:

30% cheaper than nationals

OnTrac will launch two national services in early 2026: OnTrac Express (2–3 days coast-to-coast via ClearJet air) and Ground Essentials (1–2 days slower than standard ground, up to 30% cheaper than national services, with no residential surcharge). Early access is available, and pilots are underway. It’s also debuting “7-Day Play” with Fenix Commerce to show precise delivery dates at checkout, and reports domestic shipper volume up 40% YoY. These services will provide a stronger alternative to FedEx/UPS — especially for non-urgent DTC parcels — pressuring rates while improving landed costs and checkout conversion. [Supply Chain Dive]

Outside of USPS and national carriers like FedEx and UPS, options for coast-to-coast parcel shipping providers are scarce. This is where OnTrac is carving out a space. FedEx announced a 5.9% rate hike starting Jan 5, 2026, and also increased the residential surcharge. Based on the recent rate hike cycles of the past few years, UPS might also announce a similar hike.

For Direct-to-Consumer businesses, especially those with a smaller weight (say, less than 10 lbs), parcel costs are typically 50 to 75% of the total “order-to-delivery” costs (which mainly include DC handling, packaging, and parcel). Any savings in these costs will result in higher profits; hence, parcel costs are often a topic of discussion for DTC Managers.

Parcel carrier selection and rate card negotiations are an annual ritual for almost all Transportation Managers. This post discusses the preparation required and the comparative aspects of a career selection exercise. This is written for a Transportation Manager of a retail direct-to-consumer business with sizeable volume (1,500+ parcels per day on average).

Here are the datasets you need before you start this exercise:

1. Baseline order history: Recent (last 6 months or 12 months) orderline level data along with origin and destination zipcodes, total package dimensions (length, width, height), total weight, order date, ship-ready date & timestamp, parcel pickup date, estimated delivery date, actual delivery date, number

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