4 mistakes to avoid during carrier agreement negotiations

mistakes made during UPS FedEx and DHL contract negotiations

Carriers capitalize on four common mistakes shippers make during contract negotiations. These mistakes can end up costing businesses thousands of dollars. Here’s how to avoid them so you can benefit in your next carrier agreement negotiation.

1. Only sticking to one carrier

Add additional carriers like FedEx, DHL or UPS

It’s challenging to have the upper hand in negotiation when there’s little competition in the market. Even though the market isn’t saturated with carrier options, this doesn’t mean you have to rely on one carrier for all your needs. If you have used UPS consistently, you might be unaware that FedEx or a regional carrier can offer a better deal. UPS, FedEx, and DHL all have dozens of accessorial fees, surcharges and minimums tacked onto shipments that are significantly lowered when using regional carriers in your logistics operations.

Incorporating a multi-carrier strategy can save you time, money and offer more valuable options to your customers. When you vary your logistics providers it gives you a competitive advantage at the negotiation table. Of course, one contract is easier to navigate than three, but it’s always good business to compare all the options for best rates.

Read more: Are regional carriers right for me?

2. Not knowing your shipping profile

A clear understanding of your shipping profile is needed to make progress during carrier agreement negotiations. Your carrier will know the intricacies of your shipping profile and if you are armed with the correct data you end up having the advantage. You can outsmart (and shock) your carrier by knowing the data better than they do. When you know your shipping profile you can enter the negotiation process with confidence.

3. Ignoring the fine print

Read the fine print of carrier contracts and agreements

Similar to any other type of contract, the fine print can do the most damage. Carriers tend to slip waivers and fees into your contract that they hope you don’t understand or notice. A carrier might show you an excellent discount but these incentives are invalid due to minimum shipment charges or general rate increases. An expert eye must be used to identify these traps in carrier agreements.

Read more: Negotiating a carrier contract you can be proud of 

4. Planning to negotiate alone

Preparing for negotiation can’t be done in just a few short minutes. It requires hours of analyzing the shipping profile to determine areas where you can lower shipping costs. If you think you’ve gotten as far as possible with your carriers, enlist the help of industry experts to take a deeper dive. Having someone on your team that knows the shipping industry, will only help you get the most favorable rates on the contract with your carrier. Don’t rush into your negotiation without being confident you uncovered all areas of potential savings. On average, businesses are missing out on 10-20% of savings annually that could be secured when involving Share A Refund in your contract negotiation process. With Share A Refund on your side, you don’t have to guess at good discounts.

Do your homework to maximize savings. The carrier might tell you are getting the best rate, but that’s usually not the case. Take advantage of Share A Refund’s team of experts.

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