Is your UPS spend higher than it should be? Have you noticed that the increase in shipping volume and overall shipping costs seem to be increasing at different rates? If so, we will go over some strategies to help reverse this trend and make shipping a competitive advantage.
Improper prepare for contract negotiations
Generally, most UPS shippers base the current contract negotiation approach on the initial agreement that was offered by UPS. Most shippers are strategizing on a game board designed by the opponent. This can be changed, but it requires a substantial amount of planning.
Not being organized with current shipping data makes it impracticable to do a real apple to apple correlation between yearly rate changes or carriers. Data and rate quantification are crucial if your UPS spend is higher than it should be.
Carriers know that shippers are mostly in the dark; they know comparing rates with competitor rates is difficult. For instance, compare the overall structure of a FedEx and UPS agreement. Many times the overall structure of a UPS contract is entirely different. Alternatively, the carrier sends the shipper addendum after addendum to and existing agreement. With all of this taken into consideration, consider bringing on an expert like Refund Retriever to organize your agreement data and requirements. Level the playing field.
Misunderstanding your own business requirements
Another reason your UPS spend is higher than it should be is because you do not fully explain your shipping characteristics. Therefore, UPS or FedEx cannot present the best price if you cannot precisely outline your requirements.
If you do not measure shipment volumes by service, spend, and zone, it’s challenging to compose a clear view of your business for another carrier proposal. Many shipment specific details go into pricing. This includes particular services types, package properties, accessorial, and other surcharge requirements.
It’s these details that ultimately shape the pricing carriers can propose. Therefore, the more precise, the better. Also, it is essential to describe how your business may be developing in the future. Shipping patterns, new products, and added locations will change agreement pricing application.
Lack of employee education
How often does your company refresh employees that make the final decision on what carrier or service to use for an order? Recently we uncovered over$10,000 worth of additional service charges for one client. Upon questioning the logistics director for the usage of the service, his answer was honest and but unsurprising. He stated that the shipping department had not been told to fix it.
Your UPS spend is higher than it should be, not just because of a bad UPS agreement, but could be the result of poor choices. Similarly, many shippers are paying for service levels not needed, like Next Day Air when Ground will get it there just as quickly.
The next steps to take
If you are in charge of the UPS relationship for your organization, optimizing your company’s shipping spend should be a top priority. Focusing on these critical areas is a lasting way to ensure your UPS spend is NOT higher than it should be. Take control over your contract rate negotiations, understand your requirements, and adequately train your shipping department. If you would like help with this process, reach out to the logistics professional at Refund Retriever.