Mistakes to Avoid when Negotiating Contracts with Shipping Carriers

When shippers make mistakes when negotiating contracts, they are faced with severe overcharge that can do much harm to their business. Here are some of the most common mistakes made that you should avoid in order to make sure your next contract negotiation goes as smooth as possible.

  1. Poor preparation. When a shipper goes into a negotiation without being prepared, it all goes south. It gives the carrier an unfair advantage in the negotiation. To prepare, the shippers should fully analyze previous invoices to assure you understand services used, weight, package dimensions, any international destinations, transportation, and related costs.
  2. Ignoring the fine print. Terms and conditions are just as important as the contract negotiations themselves. The terms of a contract effect a shippers total cost as much as discounts do. The terms can include, but are not limited to, general rate increases, minimum charges, late payment fees, other associated charges, etc.
  3. Not making time for a carrier meeting. Forming a relationship other than through negotiations is helpful. Carrier representatives want their customers to make time for them. When shippers only contact their rep when there is an issue, they are less likely to go out of their way to help you. Having regular meetings with your rep can help you manage your spendings overall. It’ll help in problematic situations as well since you’ll get the best service possible.
  4. No benchmarking. A benchmark provides data for other companies for comparative reasons. Wouldn’t you want to know if you were paying more than companies with similar package characteristics? Preparing yourself with this information ahead of time will show the carrier that you know what you are talking about and making them less likely to low ball you.

Follow these guidelines in regards to negotiation contracts with UPS and FedEx to help benefit your business and save you money.