Carrier contracts

Carrier contracts: negotiate effectively for better savings

by BlogCost Optimization

Is tracking individual contracts with multiple carriers proving to be tedious? Are you aware of the latest shipping rates that may affect your business? A carrier contract management system can give answers to these questions. Further, accessorial charges are a part of carrier contract negotiations.

Here, we will explore carrier contracts and their significance in reducing shipping costs for companies.

Carrier contracts and their significance on businesses

Shippers work with carrier companies to move goods between locations under agreed contracts. The carrier contracts work for specific customers and not the public. They are ideal for high-volume shipping operations. Further, carrier contracts give greater visibility regarding the timeline for invoice payments, shipping rate confirmation, and more. Businesses improve their bottom line regardless of dynamic markets with carrier contracts.

Examples of contract carriers are DHL, FedEx, UPS, Penske Logistics, and other large shipping carriers. These contract carriers offer specialized services to companies or organizations based on contracts. They offer customized services for a company’s specific needs. For instance, for the transport of refrigerated goods, they provide refrigerated trucks. Having a contract with the shipping carriers helps shippers reduce shipping costs and improve the visibility of the shipments.

Manage carrier contracts and increase operational efficiency

Businesses need to identify shipping data in their efforts to manage carrier contracts. Shippers can analyze their shipping data by service, weight, zone, and accessorial charges and assess contract deviations. In addition, carrier contracts are subject to changes, and updating carrier contract agreements is essential. A centralized monitoring system allows for better carrier contract management. A quick reference to multiple contracts improves the entire operational efficiency of the shipping company. Further, carrier contract negotiations are a part of good contract management.

Why do businesses require negotiations on carrier contracts?

The negotiations on the rates, services, and accessorials with the carriers are carrier contract negotiations. We have discussed carrier contract negotiations in detail in our previous blogs.

However, given the current global scenario, it is time to revisit contract negotiations with the shipping carriers.

Did you know new carrier rates affect carrier contracts?

In the latest news, FedEx has announced FedEx Express and Ground list rates and surcharges from Jan 2, 2023. You can check here for list rates. You can check here for the FedEx surcharges and fees.

These surcharges will affect the shipping rates. Added fuel costs and labor shortages are having an impact on the freight shipping rates. Further, ground transport is affected by trucking delays, labor disputes, and rising oil prices. As a result, intelligent negotiations with shipping carriers are the need of the hour. Multi-year contracts with carriers help in reducing annual rate increases. Get assistance from Audintel for negotiating with shipping carriers and saving shipping expenses.

Why is it essential to have accessorial charges as a part of carrier contracts?

Accessorial charges are fees levied by shipping carriers for any additional service provided during the transit of goods. Accessorials can impact a company’s bottom line and affect the quality of service. The most common accessorial charges for freight are

  • Detention: a fee charged by a carrier for additional time spent getting loaded or offloaded at a shipper or receiver
  • Demurrage: daily rate charge for cargo left at the terminal beyond the allotted free time
  • Storage: charges for holding containers at the intermodal terminal beyond the free time allotted
  • Per diem: a fee that a carrier charges against another shipping carrier or customer for using its trailers, containers
  • Residential delivery: surcharges for delivery of parcels in residential areas

Skilled negotiations help to avoid or eliminate accessorial charges. Shippers can schedule the docking to avoid detention charges. Similarly, keeping track of the arrival/ departure of containers and pre-clearing the cargo will eliminate the demurrage charges. Shipping carriers agree to lower prices during negotiations, provided shippers avoid accessorials.

Carrier contract agreement

An agreement between shipping carriers and companies for delivering goods, services, and fees is a carrier contract agreement. For instance, the UPS carrier contract agreement contains incentives and minimum rates as decided by UPS and the shipper. Further, it covers accessorial fee reductions and DIM weight reductions on invoices. With the correct shipping data, shippers can benefit from carrier contracts.

Audintel and carrier contracts

Carrier contract management is hard to decipher for clients having multiple contracts with multiple shipping carriers. Audintel not only manages carrier contracts for its clients but also helps in negotiating for a better price. We help in carrier contract negotiations by providing insightful data. Further, Audintel tracks shipping invoices for clients. We investigate the shipping carrier’s performance and aid clients in reworking contracts. Our experts are well-versed in negotiations and monitor the dynamic shipping rates of different shipping carriers. So, Audintel protects its clients from unwanted expenses by re-negotiating contracts with shipping carriers.

Final thoughts

Technology can optimize the shipping operations of businesses and reduce shipping costs. However, understanding the complexities of shipping rates and accessorials may confuse shippers. Audintel with its unique software tools, can help negotiate contracts with shipping carriers. We offer services that will save money and improve your overall service. Let Audintel guide you through the complex maze of carrier contracts. Contact us for any information on carrier contracts and our services at +1 (619) 354 8539 or visit our Audintel website.

manage contracts

Carrier contract negotiations: manage contracts with ease

by BlogCost Optimization

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 +1 (619) 354 8539 or visit our Audintel website.