Anand Venkatraman   23rd Aug 2022

We are almost reaching the end of the year, but new challenges await us. Parcel and freight shipments are facing disruptions domestically and globally. These disruptions are many such as inflation or unrest among union workers. The Union workers include drivers, temporary workers, and package handlers. Hence, shipping costs are rising for delivering high-quality goods on time.

According to the latest reports, freight prices are increasing in the second half of 2022. So, shippers have to negotiate contracts with shipping carriers to save money. This article will focus on new changes expected in existing carrier contracts and negotiation parameters.

Why are carrier contract negotiations so important now?

For the past two years, there’s been a disruption in the U.S. supply chain. High shipping rates and port congestion are causing disruptions in the U.S. supply chain. In addition, shippers need confirmation that there is no change in their carrier contracts. They have to periodically review the carrier contracts for any changes made concerning rates. Further, shipping volumes affecting the shipping expenses need periodic review. As a result, shippers should have new changes in their carrier contracts and negotiate better.

Carrier contract management

Managing contracts with different shipping carriers are complex. Tracking each carrier’s performance against a company’s goals requires greater clarity. Also, aligning the invoices with the agreed terms of the carrier contract is necessary. It is to ensure that companies are not paying more to shipping carriers. Hence, managing carrier contracts requires integrating technology into shipping operations. It allows shippers to make strategic decisions and detect future problems. Further, handling claims and resolution management give shippers a competitive edge.

Parcel contract negotiations

Small parcel contracts have terms that are difficult to understand for an average person. Experts in this field, like Audintel, can negotiate for businesses and save money. The options that are available for shippers during parcel contract negotiations include

  • Better options from the same carrier

During contract negotiations, shippers can opt for better, alternative services from the same carrier. It allows companies to save money and pay only for the services needed. For instance, FedEx Smart Post is cheaper than FedEx Ground shipping. FedEx Smart Post does not include residential surcharges. So, opting for the FedEx Smart Post service saves money for shippers.

  • New amendments in agreement

Parcel contracts can have amendments based on the weight of packages. In addition, the shipping zones for parcel delivery also make a difference. If companies feel that they deliver lightweight, small parcels to customers, they can make the required changes to their contracts. Alternatively, if most package deliveries do not go to remote locations, necessary amendments in the agreement are possible.

  • Renegotiate with carriers

When contracts expire or need renewal, shippers can renegotiate with carriers on parameters such as

  • Discounts

Shippers can receive discounts from parcel carriers based on different tiers and shipping volumes.

  • Minimum spend

The lowest billed price of a parcel is possible during negotiations with shipping carriers.

  • Surcharges

Parcel carriers can levy surcharges on fuel, address correction, Saturday delivery, and more. By reassessing shipping data, shippers can evade surcharges during renegotiations.

  • Refunds

Parcel carriers offer refunds to companies for late and failed deliveries. In addition, parcel carriers have to refund money if they have overcharged for any service. The refund clause has to be a part of amendments in parcel contracts.

Optimizing your parcel negotiations

Parcel shipping is becoming expensive with the rise in shipping rates. In such a scenario, carrier contract negotiations are necessary. Each carrier contract’s details have to be fine-checked for any drawbacks. While negotiating, companies need to know their data, shipping volumes, and preferred carrier fees. In addition, shippers need to know the services offered by various carriers and their best rates. If these negotiation strategies feel overwhelming, there are audit services like Audintel to assist you. We optimize your parcel negotiations and provide efficient solutions to our customers. Let Audintel help you in negotiating improvements in your contract agreements.

Conclusion

The dynamics in today’s shipping industry are evolving. Shippers face new challenges such as shipping rates, monitoring and tracking packages, and communicating with the customers for any delays. In short, shippers need help getting the best deals from their shipping carriers. With Audintel, shippers can rest easy about their carrier contract negotiations. Our experts are here to help shippers during each step of the negotiations. For further assistance on contract negotiations and more, contact us on 310-710-7005 or visit our Audintel website.