Top Tips to Negotiate Better Shipping Contracts

If you haven’t evaluated your shipping carrier contracts in a while, you could be missing opportunities to lower your rates and improve the bottom line of your transportation budget. Plus, if your business has grown or changed (even in seemingly small ways) since your current carrier contracts were locked in, there’s a good chance your shipping patterns have evolved too (how you ship, where you ship, how much you ship, etc.). It’s important to ask not just “how much am I paying on shipping,” but rather “how much am I overpaying?”

Just as your business has changed since your shipping contracts were last negotiated, so have the services and options offered by your carriers. The launch of UPS Premier, a technology-enabled network built for the needs of healthcare companies, is changing service tiers and offerings across carriers. While entering into a contract negotiation can seem like a daunting task, doing so empowered with the right information can drive significant gains for your business.

Know Your Shipping Patterns
Going into a shipping contract negotiation with a clear understanding of your current shipping patterns and a vision for how those may change in the future includes understanding the following key aspects:

  • Volume
    Get a clear picture of your daily, weekly, monthly, and annual averages. Factor in where you are now and how shipping will change as you work toward meeting other business goals.
  • Location(s)
    Know where you are shipping from and where you most frequently ship to. Are you moving product across town, all over the United States or around the world? Are you shipping to residential or commercial locations? These factors will help guide single and multi-zone rate discussions.• Frequency
    What days of the week do you most commonly ship? Are you shipping weekly, daily, or multiple times per day? Do you have flexibility in the time of day, or do you require more rigid pickup and delivery timelines?
  • Specific Needs
    Are guaranteed delivery times a key part of the way you work or do you have more flexibility in those areas? How about specialized products that require specific handling instructions?
  • Inventory
    Consider how the location and volume of available inventory impacts shipping patterns.

Shipment Trackers helps clients gain a greater level of visibility into shipping and transportation data so it’s readily available for evaluation, planning and for contract negotiation discussions.

Get to Know the Fees
Shipping contracts can be riddled with complex language, exceptions and disclaimers that can significantly impact the ultimate carrier service delivery. Going into negotiations, it’s important to have a handle on the most commonly applied fees that should be discussed with carriers during negotiations:

  • Minimum Charge
    Do you know how many of your packages are getting hit with a minimum charge; thus, decreasing the effect of your base discounts?
  • Courier/Documentation Fees
    Shipping internationally? Be aware of these fees which might not be included in standard carrier contracts.
  • General Rate Increases
    As carriers update their base rates, what you pay can be impacted. Be aware of the contract language related to these potential increases.
  • Residential/Delivery Area Surcharges
    If you’re shipping to residential or out-of-the-way locations, pay attention to how these fees are applied to your shipping invoices.
  • Dimensional Weight Surcharges
    Are you getting charged extra dollars? Do you know how dimensional weight is calculated? Did you know this can be negotiated with your carriers?

Look Beyond the Price
When entering into a negotiation for shipping rates, remember that the process must include discussions beyond bottom line price. Truly optimizing your contract means looking at the total picture and factoring in areas such as freight class, density of shipments, minimum charges and ultimately, carrier reliability. Making sure the carriers you choose will come through for you is a critical factor when mapping out your shipping and transportation contracts.

Take the Guesswork Out of Negotiation: Call In The Experts
Getting the highest value out of the shipping carrier contract negotiation process requires data and knowledge. The good news is you don’t have to go it alone. The shipping specialists at Shipment Trackers can arm you with the data and insights to ensure you’re getting the most competitive rates and service that’s the right fit for your business.

Think of it this way…imagine going into a car dealership to purchase a car and knowing exactly what the last 10 people paid for that exact car. Would that change the way you negotiate or how hard you pushed for a price? Shipment Trackers can bring that knowledge to your shipping budget. We have insights on what similar businesses in your industry are paying for shipping and the incentives they’re being offered. This insight, coupled with the team’s unmatched experience, helps ensure the terms negotiated offer the best fit for your business, driving value directly to the bottom line.

If you are considering a shipping contract negotiation or ready to take control of your transportation contracts and start uncovering savings, get in touch. Our team of shipping contract consultants are here to guide you through the process.