Negotiations are happening every day. Whether it’s negotiating how much screen time your teen can have or it’s negotiating with your spouse on how much money to spend each month, it can’t be avoided. If you’ve been negotiating shipping contracts on your own chances are you aren’t getting the best service at the best price. After all, what do you have to compare it to other than your previous agreement? Your carrier might tell you that your rates can’t be any lower, but that’s because they’re compensated on the revenue from your account. Going back and forth with your FedEx or UPS rep, asking for better numbers doesn’t help much in the way of unlocking the big savings. Share A Refund has insight into multiple contracts and our carrier agreement optimization experts are trained to secure the highest savings during a negotiation.
Challenges of negotiating carrier contracts
Scarce competition
We aren’t doubting your negotiation skills. In fact, you might have the sharpest negotiations skills at your company. The current environment consists of many challenges that are stacked against you. It’s difficult to create negotiating leverage with little competition in the market. Often carriers will only negotiate rates that benefit you when you mention what another carrier is willing to offer you. Because the carrier options are limited, it makes it more challenging than if the market was saturated with carrier options.
Little preparation
It’s important to not enter a contract negotiation blind. Carriers often know more about a shipper’s data than the shipper. To have a competitive edge, shippers must fully grasp and understand the implications of terms on their carrier agreements and have the data to back up any claims. A rep will make an effort to provide the illusion you are in control, but this structure is a strategic way for the carrier to leave with the upper hand. For example, getting a better discount on Ground for 1-5lb packages doesn’t help if the minimum charge is too high to realize the discount. Remember, the carrier’s goal is to walk away with an increased profit from the negotiation. That’s why it’s important to work with Share A Refund, the award-winning parcel software, to find the best places to negotiate the savings that you deserve.
Constant fees
It’s no secret shipping costs and accessorial charges have risen over the years. Carriers intentionally make agreements complex to confuse you by slipping waivers and fees into your contracts that they hope you don’t notice. Carriers will offer you shiny discounts, but it’s imperative to make sure your current business supports the targeted revenue band. Maximizing base discounts is always the best practice if possible. Fees and discounts can be tricky to navigate without hiring an outside expert to assess shipping data, your shipping profile, and shipping characteristics.
Learn more about UPS incentives: How UPS calculates incentives
Learn more about FedEx incentives: How FedEx calculates incentives
Stop going in circles during contract negotiations. With Share A Refund, you can save 10-20% on shipping bringing profits back to your business. Share A Refund insight will help you improve cost accounting and reduce administrative overhead. Spend less time in the weeds of UPS and FedEx contracts and more time on your core business. Share A Refund contract optimization will either save you money or guarantee you have the best possible contract. It’s a win-win. If you want to increase profits click below to signup for Share A Refund carrier agreement optimization.
