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5 Mistakes to Avoid During Parcel Contract Negotiations

By February 14, 2018

FedEx and UPS made some significant changes to their rates and contracts for 2018, yet many businesses have yet to either know or understand what these changes are. For this reason – and many others – it’s critical for businesses to update their carrier contracts, as well as gain more clarity to what exactly impacts their shipping efforts. Unfortunately, however, these efforts don’t always top to-do-lists – making it easier for carriers to increase their profits while shippers often spend more than they should.

To help avoid the potential shortcomings of your existing carrier contracts, re-negotiate – or even negotiate for the first time – your parcel contracts in an effort to increase your shipping efficiency while decreasing your shipping overhead. To help, consider the five mistakes below you will want to avoid.

Mistake #1: Not Knowing Your End Goals

When it comes to shipping, what do you want to gain other than your deliveries arriving safely from point A to point Z? If it’s to avoid surcharges and eliminate excess carrier fees, you’re in good company. Savvy business owners looking to streamline their operations are always aware of how much money they’re spending – which is why the details of your carrier contracts are so important.

When aiming to reach these goals, it’s critical to know the data of your business. Through parcel auditing and shipping analytics, you can gain vital data that will unveil insight to your shipping efficiencies, shipping shortcomings and shipping overhead. Collectively, these data touchpoints can help lead you in your contract negotiation process so that you can reach end goals that have your company’s best interests top-of-mind.

Mistake #2: Not Evaluating All Factors Influenced by Contract Changes

Making changes is one thing… reacting to the domino effect that may follow is another.

When you negotiate your carrier contracts, be sure to consider all the factors that will be influenced when any changes are made. From transit times to external business partners to cost calculations and a variety of other variables, there are many things influenced by carrier contract negotiations. Keep these factors in mind as you negotiate your contracts to avoid unexpected errors, frustrations, customer disappointment and more.  

Mistake #3: Not Having an Exit Strategy in Place  

As the saying goes, all good things must come to an end. And when it comes to carrier contracts, this is no exception… even if you think your existing contract is the best it could ever be.

FedEx and UPS surprise shipper’s every year with new rates, surcharges and other expenses that may or may not be favorable to your shipping efforts. Due to this, it’s important for shippers to have an exit strategy identified within their contracts just in case something happens where they need to terminate or change the contract. Looking ahead to the end – or at least an ending that needs some adjustment – can help your company better prepare for long-term shipping success.

Mistake #4: Not Welcoming More Than One Carrier

Let’s face it – it’s less time-intense to negotiate one carrier contract than it is two or three. Yet this approach doesn’t do you any favors when it comes to capturing the best shipping rates for your various shipping needs. As a result, it’s important to consider how multiple carrier contracts can benefit your business.

Incorporating a multi-carrier strategy into your shipping efforts can deliver a range of benefits – including enhanced transit time, increased pick-up and delivery locations, more favorable rates and more. Additionally, you welcome the opportunity to provide your customers with their preference of carriers – something not to overlook the value of. To help ease this often time-intense – and always complicated – task, consider how trusting experts to do it for you can help. Refund Retriever offers this service, eliminating the need to add one more thing to your to-do-list while also delivering on your company’s goals of reaching the best contract terms possible for your unique business. Explore more here.

Mistake #5: Not Providing Benchmarking Details

By definition, benchmarking refers to providing data points from other companies for comparative purposes. And when it comes to contract negotiations, there is no uncertainty to the value that benchmarking can provide during a negotiation process.

When armed with data and hard facts – including comparable rates, transit times, surcharge details and more – from one carrier to another, you will be better equipped to negotiate fairly yet firmly. Not having these details, however, can be a costly mistake that can lead you to less than preferred contract terms.

Conclusion

The fine print of carrier contracts are complex, yet the details of your money spent shipping can be even more complex if not routinely evaluated and understood. To help avoid spending more than you should, make negotiating carrier contracts top your to-do-lists. Discover more here, or reach out to Refund Retriever at brian@refund-retriever.com now.

Brian Gibbs

Author Brian Gibbs

More posts by Brian Gibbs

Brian Gibbs | President of Refund Retriever

Brian Gibbs founded Refund Retriever in 2006 while running his first eBay based business and seeing the shortcomings of other shipment auditing companies. Refund Retriever's primary focus is FedEx and UPS parcel invoice auditing. After graduating from Texas A&M University in 2001, he then graduated from the University of Houston in 2004 with a JD and MBA. Gibbs has been featured in Forbes, Entrepreneur and other publications discussing parcel auditing, shipping, e-commerce and more. Learn more at www.refundretriever.com or call (800) 441-8085 for more information.

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