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.

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Carrier contracts: Negotiate to simplify the complexity

by BlogCost Optimization

The advent of the e-commerce boom has accelerated the way businesses ship their goods. Prompt and cost-effective shipping is the new mantra. Customers expect fast delivery of goods, whether by freight or parcel.

For this reason, shippers need better carrier contracts with effective negotiations. Our earlier blogs were about the importance of shipping data when negotiating with UPS or FedEx contracts and upgrading the carrier contracts. This blog explores carrier contracts, their management, and the negotiation process.

Contract negotiations and carrier contracts

Contract negotiation is a deliberation between two or more parties on the contents of a contract. The contract is a legally binding agreement agreed upon by the parties involved. The parties mutually agree to the terms and conditions of the agreement or contract. It is mutually beneficial and outlines the priorities and expectations of all the involved parties.

Carrier contracts involve contracts between shipping carriers and businesses. Shipping experts negotiate on carrier contracts regardless of the shipping mode. As a result, companies get discounts, shipping offers, and a reduction in general increase rates. In addition, carrier contract negotiations compare the services of shipping carriers so that businesses get the best deals.

Carrier contract management

Managing carrier contracts is tedious as it involves having in-depth knowledge of the terms and conditions. Further, a thorough review of the current or proposed agreement is vital. By examining the fine print of carrier contracts, businesses receive attractive discounts, reduced shipping rates, and other incentives. In addition to understanding the complexities of the contract, it is equally important to have insights into pricing agreements. To negotiate and renegotiate the terms of your contract, you can call the experts at Audintel.

Carrier contract negotiation strategies

Negotiators have to understand the transportation spend before settling to negotiate with shipping carriers. The fees and other expenses charged by the shipping carriers need checking. It includes value-added services such as surcharges, pallet fees, documentation fees, etc. Let’s explore some of the negotiation strategies.

  • Know your shipping profile

Shippers need to understand their past shipping volumes and transportation spend. It includes the type of services, number of packages, the weight of packages, and zones of shipments.

  • In-depth study of carrier contract agreement

The price of packages sent out depends on the shipping carrier’s rates. Shippers can expect discounts on guaranteed services and weights of packages. In addition, incentives are offered based on shipping spend.

  • Benchmarking

Analyze the existing contracts for pricing and accessorial charges. Shippers can compare the amount paid to the real-time rates paid by other similar-size shippers. This helps them to negotiate with the carrier with confidence.

  • Request for proposal

Shippers ask for a written request for proposal (RFP) from shipping carriers to conduct negotiations. It will include different services, discounts, bill options, packaging options, surcharges, etc.

Shipping negotiation process

The shipping negotiation process involves interaction with the carrier’s representatives. So, to save time, shippers can highlight the points that need discussion. It helps in streamlining the negotiation process without getting sidetracked by irrelevant issues. Further, it is vital to keep the negotiation process open for re-negotiation when necessary.

Knowing one’s shipping data and additional charges is critical for successful parcel contract negotiations. For instance, asking for discounts on delivery area surcharges is vital, especially if a parcel delivery to a customer is in a rural area. In addition, negotiators need to know the parcel carriers’ market position and the company’s impact on the carriers’  network. Further, shippers receive proposals for multiple shipping carriers and can choose to negotiate with the parcel carrier that fits their shipping needs.

The carrier contract negotiation process is confusing for shippers but not for experts. Audit companies such as Audintel can save money for shippers with their expertise.

Focused negotiations by Audintel

As audit experts, we believe that effective management of carrier contracts enhances a company’s growth. Audintel ensures that the shipping invoices align with the contract terms agreed upon while negotiating carrier contracts. Effective shipping negotiations improve a company’s bottom line. Our intuitive platform helps our clients know their shipping spend before negotiating carrier contracts. We have ample experience dealing with shipping carriers and understand their thinking and operating methods. This experience helps us leverage the client’s data so that clients can walk with a favourable carrier contract.

Final thoughts

Complex carrier contracts are not easy to understand for shippers. It is necessary to get expert advice regarding the intricacies of contracts. Audintel’s team of experts explains the complexity of the carrier contracts and negotiates the best deal suitable for your business needs. Avoid leaving money on the table and save money. Let Audintel help you in boosting your profits by contacting us today at +1 (619) 354 8539 or by visiting our Audintel website.

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Efficient contract negotiations with shipping carriers

by BlogCost Optimization

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 [email protected]. You can also learn about our services by visiting the Audintel website or call us at +1 (619) 354 8539.