Taranisen Mohanta   01st Nov 2021

Carrier-contract-negotiations

Carrier contracts are sometimes confusing with legal jargon. And negotiating with carriers regarding services, fees is hard for companies. Shippers wonder if they are getting the best from their carrier contract negotiations.

Businesses need different carrier networks and strategies to get the best carrier contracts. In this article, we will discuss carrier contract management and the steps in the contract process.

Negotiation with small parcel contracts

Negotiating small parcel contracts is a complex process. Shippers need to know that they can use multiple carriers for the shipment of parcels. It is good to understand which shipping carrier is offering the best rate and discounts. Also, companies must send out a request for proposal (RFP) to get good deals from shipping carriers. In addition, shippers should renegotiate whenever possible. Further, shipping more volumes gives better rates and discounts. Audintel’s expert negotiators help you get the most out of these negotiations.

What are the steps in the carrier contract process?

Every year shipping rates change. So, shippers must look at their shipping contracts. It is necessary to ascertain the need for re-negotiations of shipping contracts or the initiation of new contracts. Companies have to review shipping carrier contracts stepwise. However, in a fast and changing supply chain environment, these steps are vital in the contract process.

Know your shipping profile

Shippers should have their data handy when negotiating with shipping carriers. Because shipping carriers already have access to the companies’ data before negotiations. Companies should have information about shipping volumes, service mode, zone, parcel weight, dimensions, accessorial charges, and more. Audintel helps companies access real-time data and visibility of their profile for better negotiations. Audintel tries to minimize transportation costs as much as possible.

Capitalize on differences between carriers

Shippers should consider using multiple carriers to get the best rates from a shipping carrier. By leveraging the differences between carriers, shippers get good discounts. For example, small parcel delivery through regional couriers does not focus on surcharges. Companies get benefits like better rates, delivery time, and more.  Shippers can walk away from the negotiating table with a better deal. Audintel helps businesses in fostering competitive shipping deals with shipping carriers.

Examine the carrier contract

Shippers must review the carrier contracts regularly, whether it is a new contract or renewal of an old contract. Understanding the fine print of the carrier contracts is necessary. Companies need to know about any change in the shipping contract; for instance, an increase in the package characteristics such as oversize fee. Audintel will identify and examine the fine print of carrier contracts. Our automated systems determine what is best for our clients.

Understand the fees

Companies have to know the fees and surcharges in the shipping contracts. These fees can make or break the contracts. Sometimes, hidden charges in a contract can increase a company’s budget. Many companies are unaware of the addition of value-added services in the carrier contract. Audintel helps its clients understand the fees and saves money.  Transportation charges and surcharges are part of the fees.

  • Transportation charges involve the cost of delivering a package from the shipping carrier to the end consumer.
  • Surcharges are many and varied depending on the type of shipping carriers. Negotiations can bring good discounts for shippers.

Some shipping surcharges include:

  • Fuel surcharges

The calculation of fuel surcharges is crucial for determining shipping costs. Shipping carriers calculate fuel surcharges for different services. Negotiations with shipping carriers can lower the shipping costs.

  • Residential Delivery Surcharge

Shipping carriers levy surcharges for deliveries to residential areas. Different carriers levy fees based on the shipping options. Negotiations that involve different services of carriers can reduce or eliminate the costs.

  • Oversize package Surcharge

This surcharge is for packages that exceed the weight or size parameters of shipping carriers. Shippers can ask for discounts depending on the size or weight of the parcels. The surcharges can be a part of the carrier contract negotiations.

  • Saturday Surcharge

The surcharge is applicable for deliveries made on Saturday. Shippers can opt out of Saturday Surcharges when negotiating with shipping carriers.

  • Address correction surcharges

The surcharge is applied when a shipper’s carrier has to correct the incorrect or incomplete address of parcels. Shippers can avoid the application of this surcharge during negotiations.

  • Delivery area surcharge

This surcharge is for shipments that are outside the standard delivery area.  Shippers can opt out of this surcharge during negotiations.

Audintel can choose the surcharges that apply to its clients’ shipping needs during negotiations. We, at Audintel, calculate the accessorial charges individually in our systems.

Other areas in carrier contracts negotiations

Shippers need to be wary of accepting a refund waiver from any shipping carriers. Companies should review the terms and conditions of the shipping contracts. It is better to be patient while negotiating with the shipping carriers to get the best deal. Negotiations and re-negotiations will bring a positive outcome for both shippers and carriers.

Expert negotiators at Audintel make sure that businesses get good shipping contracts that bring in profits.

The bottom line

The overall shipping environment is changing. As a consequence, shipping contract negotiations are evolving for the better. Businesses are looking for a healthy relationship with shipping carriers. Towards this end, shipping contract negotiations are a bridge in this relationship. For any trouble in shipping contract negotiations, contact us at info@audintel.com. You can also learn about our services by visiting the Audintel website.