Negotiating carrier contracts Archives

Small Parcel spend management challenges

Manage small parcel spend smartly to lower shipping costs

July 18, 2024

by Blog

The global parcel delivery market will grow from 2024 to 2030 at 4.2%. The factors contributing to this growth are the increasing e-commerce sector and cross-border trade. The purchasing patterns of customers are evolving with more cross-border purchases. Costs and convenience are the driving forces among online retail buyers. Further, technological advancements in the last-mile delivery of parcels are changing. Drones, electric vehicles, and semiautonomous delivery vehicles are the future of the parcel delivery market.

A booming parcel delivery market can escalate the costs of shipping small parcels. Shippers can calculate costs from ordering a good to its delivery to understand parcel spend. Managing parcel spend can lower shipping costs. This article will give you a comprehensive overview of parcel spend management.

Small parcel spend management

Every shipper is worried about the amount spent on shipping. Businesses must know how their dollars are spent/saved. It is challenging to track shipping bills to avoid overpayment. Moreover, increasing carrier rates should not affect parcel delivery costs. To tackle these issues, companies have to invest in advanced technologies. Data analytics gives valuable insights into parcel spend.

Parcel spend management optimizes shipping processes and ensures favorable customer satisfaction. Monitoring small parcel shipping expenses ensures good profit margins for businesses. Managing small parcel spend requires efficient planning. Companies need an effective strategy to understand the cost of shipping small parcels to customers. Following are some of the strategies for effective parcel spend management.

Regular audits of small parcels

Billing mistakes and overpayment are common during small parcel shipments. Wrong surcharges and miscalculated rates increase the shipping costs. Conducting regular small parcel audits helps identify these anomalies. Small parcel audits identify invalid invoices and optimize shipping processes. By reviewing these audits, shippers can reduce unnecessary expenses.

Small parcel audits help companies receive refunds from parcel carriers for service failures. Automated small parcel audits save significant amounts for companies. Further, parcel audits allow shippers to choose multiple carriers for efficient shipping operations. For more on small parcel audits, see our blog article on small parcel audits improving the bottom line.

Saving dollars by negotiating carrier contracts

Selecting cost-effective shipping carriers with on-time delivery of small packages is paramount for shippers. Further, negotiating favourable carrier contracts is essential for parcel spend management. Companies can save dollars by negotiating contracts with shipping carriers. Small parcel contract negotiations are on carrier rates and minimum payments. Negotiating for better terms of agreement optimizes parcel shipping processes.

In addition, carrier contract negotiations focus on volume discounts and accessorials to reduce shipping costs. Volume discounts help reduce prices for bulk shipments and encourage large orders. Negotiating on surcharges reduces shipping costs to a large extent. For example, shippers should negotiate on the residential surcharge for only specific shipments.

Further, service-level agreements (SLAs) ensure parcel carriers meet performance standards. It includes providing high-quality services, visibility to track services, handling fragile packages, etc. It also allows shippers to offset the annual GRIs of various carriers during negotiations.

Packaging optimization

One can control shipping costs by optimizing packaging and decreasing dimensional weight charges. Shippers can save money by making better packaging choices for small parcels. Compact, lightweight packages are lighter on the budget. It is necessary to minimize the weight and size of packages.

Further, choosing the correct dimensional packaging for small parcels reduces shipping costs. Packaging protection aids in protecting small parcels from damage during transportation. Businesses can improve shipping efficiency by using the correct packaging materials. Automation tools are optimizing shipping operations.

Automation in logistics to control parcel spend

Various technologies like machine learning and artificial intelligence are integral in automating logistics. Machine learning helps capture invoice data, tracks shipments, and passes on real-time information to customers. Artificial Intelligence (AI) analyzes overall parcel spend while monitoring carrier performance. Robotic Process Automation (RPA) does repetitive tasks without any errors. For example, RPA prints shipping labels for the packages.

Transportation Management Systems helps identify supply chain gaps. It evaluates logistics management with greater data visibility. Further, shippers can schedule orders seamlessly and consolidate shipments. Shippers get better pricing options, thus saving money and time.

How data is the mainstay in parcel spend management

Parcel shipping data gives valuable insights into parcel spend. Business Intelligence tools help companies lower shipping expenses. Businesses conduct market research on all carriers with the help of customized shipping reports. It allows shippers to choose the correct parcel carrier for their shipping needs. Analyzing historical shipping data provides insights into small parcel shipping activity. The complete shipping profile of a business is available at one’s fingertips.

Normalizing shipping data provides users with insights into market trends. Using these trends provides businesses with cost-saving opportunities. Further, the data helps to forecast savings year-over-year. Identification of irregularities with organized data is available on customized dashboards.

Shipping data helps shippers negotiate with parcel carriers over accessorial charges. For example, the shipping carrier may charge an invalid address correction surcharge even if the address is correct. The audited data helps in minimizing these surcharges. Businesses will learn about the reliability of parcel carriers in package deliveries. Shippers presented constantly with invalid charges from their parcel carrier will rethink their options. They will shift to another parcel carrier rather than getting stuck with a costly one.

Parcel Spend Management is made easy with Audintel solutions

Audintel provides intelligent solutions for managing parcel spend. We offer real-time tracking of shipments, changes in carrier rates, and other industry trends. Our Audintel Audit Advantage helps clients save more. Our comprehensive “Line-Item” invoice Audit and claims filing process is exemplary. We have identified more than fifty service failures from parcel carriers, such as

Late deliveries
Duplicate charges
Missing discounts
Void shipments
Invalid residential surcharge
Incorrect weight
Lost packages, and more.

Our small parcel audits help claim refunds from shipping carriers for service failures.

Audintel has experts with prior experience in parcel carrier companies. These experts advise our clients on different aspects of carrier contract negotiations. We provide tips on how to get favorable carrier contracts. Our team informs clients about changing carrier rates, annual GRIs, and regulations affecting parcel spend.

Audintel provides intelligent solutions for parcel spend management. Our cloud-based solutions provide cost-saving opportunities. Audintel’s intuitive dashboards provide a graphical visualization of the shipping data. We have BI tools that enable clients to make informed decisions based on their shipping spend.

Wrapping it up

Businesses face many hurdles to reduce labor costs and parcel delivery expenses. Shippers with large shipping volumes want cost-saving measures. Parcel spend management lowers shipping costs and gives higher customer satisfaction. Automated parcel management systems identify discrepancies in billing invoices, carrier contracts, and supply chains. Real-time tracking tools and advanced algorithms improve shipping efficiency. It helps in minimizing parcel spending. Further, businesses get more parcel spend visibility for their shipping processes. Data analytics is the backbone of parcel spend management.

Audintel has the expertise to control parcel spend efficiently for businesses. Our parcel audit solutions are valuable for our clients and help them make informed decisions. We advise clients to negotiate better for carrier contracts. Audintel’s RESTful APIs seamlessly integrate into your existing ERPs and other applications. Our AI-powered platform gives valuable insights into parcel spend. Shippers save significantly by partnering with Audintel to manage parcel spend.

Reach us at +1 (619) 354 8539 for more information on parcel spend management services. Some of our articles on small parcel audit services are available here. In addition, you can learn about our audit services at the Audintel website.

Do you know everything about carrier contract negotiations?

January 3, 2023

by Blog Cost Optimization

It’s that time of the year again for evaluating your expenses, especially for parcel and freight shipments. As a sign of good practice, companies should review their contracts with shipping carriers annually. It not only helps in understanding the shipping costs but also in saving money efficiently.

We have discussed carrier contract negotiations in our earlier blogs. Here, we will share experts’ advice on the prudent way to negotiate carrier contracts.

Companies with high shipping volumes can reduce costs with an efficient carrier contract management system. Experienced professionals believe that a well-informed shipper can diligently negotiate on the negotiation table and reduce shipping costs. So, let’s understand the importance of carrier contract negotiations. In addition, gain the know-how to prepare for the negotiation process from experts.

Importance of carrier contract negotiations

Businesses face rising shipping prices and increase their profits while fulfilling customer expectations. So, it becomes essential for shippers to negotiate better carrier contracts and save money. Due to labor shortages, shipping carriers such as UPS and FedEx are increasing their shipping rates. Companies end up paying more to these shipping carriers if their carrier contract negotiations do not cover some services. With an optimized carrier contract, companies can drastically reduce their shipping costs.

Contract negotiation process

It is necessary to understand the complexities of the contract negotiation process for the best deals. Ideally, the contract negotiation process involves understanding the shipper’s shipping volume in different categories. Businesses need to identify their shipping volumes in terms of service with zones keeping their historical data in mind. It helps to identify the service that can fetch more discounts from the shipping carrier. Moreover, additional evaluation of weight slabs helps shippers receive discounts, particularly in specific slabs having high shipping volumes. Further, a proper Dim Weight shipping volume assessment helps reduce the Dim Weight.

Negotiating Parcel Contracts

Negotiating carrier contracts can also involve identifying shipments to specific destinations. For instance, shippers can get discounts, particularly for Western States or Eastern States in the contiguous states within the country, or Import/Export to specific countries. In addition, negotiating parcel contracts brings discounts on fees. The parcel carriers offer discounts on high-volume surcharges can significantly reduce shipping rates.

Experts having vast experience in carrier contract negotiations believe that shippers should know which services attract the maximum discount. During carrier contract negotiations, shippers can target the services that will give them the most rebate. In addition, shippers should clarify the minimums applied to each service. For instance, if the shipper has a high possibility of shipping rates at the minimum, then negotiations should be on the minimum reduction amount on the minimums. Further, shippers should negotiate for a higher dim factor for specific services.

Use of Multiple Carriers

According to experienced carrier contract negotiators, shippers should consider alternative parcel carriers. A shipper using a shipping carrier for a prolonged period may miss out on crucial shipping discounts on specific services. A multi-carrier strategy identifies the current carrier costs for alternative carriers. Companies can compare the current shipping costs of the old parcel carrier with that of the new shipping carriers to help them decide the best shipping carrier for their business.

A better understanding of surcharges

Value-added charges or surcharges may not appear in the initial contract with shipping carriers. But, an accurate assessment of the value-added fees at regular intervals helps companies save money. Shipping surcharges and charges of the parcel carriers change frequently. Some of the fees that see frequent changes are

General Rate Increase (GRI)
Courier and documentation fees
Pallet fees

Carrier contract management can keep track of the surcharges so that shippers don’t pay extra. In addition, carrier contract management supports negotiation strategies with parcel carriers. Parcel contract negotiations require expert management to get a complete understanding of different nuances during the contract negotiation. Companies that do not have an in-house contract negotiation team can always partner with third-party experts.

Get expert opinion from Audintel on carrier contract negotiations

Shipping companies have to understand their shipping profile before entering into contract negotiations. Audintel helps shippers evaluate their historical data to know the areas that can reduce shipping costs. Shippers should pay attention to any changes in the shipping carriers’ fees. Our team provides updates about any changes in the shipping carriers’ fees and surcharges so that the shippers don’t pay more. In addition, Audintel also supports its clients in renegotiating contracts as and when needed. We help shippers to review their carrier contracts periodically to avoid payment of unseen charges in the future.

To sum it up

Parcel shipping is becoming expensive every year. A good carrier contract helps shippers overcome hidden fees and surcharges. Effective carrier contract negotiations at the right time help companies get the best out of their shipping carrier contracts. Audintel’s experts in carrier contracts negotiations help shippers save money. For further information, contact us at +1 (619) 354 8539 or visit our Audintel website.

Carrier contract negotiations: manage contracts with ease

August 23, 2022

by Blog Cost 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.

Carrier contracts: Negotiate to simplify the complexity

July 13, 2022

by Blog Cost 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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Best Practices For Shipping Contract Negotiations

August 5, 2021

by Blog Cost Optimization

Shipping contract negotiations are essential for the shipping business. They help in saving the costs of the shipping companies. However, contract negotiations are complex and time-consuming. The negotiations have to be mutually advantageous to both clients and carriers. There needs to be transparency and open communication. With this in mind, let’s explore the best practices in shipping contract negotiations.

To begin with, let us understand: What are Shipping contract negotiations?

Shipping contracts are legal documents between a client and a carrier. The regular review of contracts is necessary to increase the shipping business of client with carrier. Shipping carriers like UPS and FedEx announce rate increase periodically. Therefore, it is essential to track the rise in shipping spend. The shipping contract negotiations relate to services, weights, accessorial charges, and more.

There are different kinds of shipping contract negotiations such as:

Small Parcel contract negotiations

Small Parcel contract negotiations involve reading the fine print of the contract with the carriers. Shippers need to review their service contracts regularly. In addition, they have to be aware of the incentive offers and discounts. The shipping contracts should list all the services that are essential for shippers. In addition, it should give clarity about surcharges and tariff rules. Nonetheless, negotiating the best parcel rates requires careful planning and monitoring. Audintel services help small parcel businesses in shipping data analysis, optimizing agreements, and reduce parcel costs.

Freight contract negotiations

Negotiations regarding freight contracts include volatile freight rates. In addition, negotiations should consider unforeseen surcharges. Also, there should be clarity in the contents of the freight contracts. Factors such as rates, routes, services, free days, space protection, surcharges, and credit terms play a vital role in discussions. Negotiating freight rates is a complex process, which experts at Audintel are good at handling.

Negotiating rates with carriers

For successful negotiation of shipping contracts, shippers need to know the carriers and their services. Even after finalizing a shipping contract, new surcharges and tariff rules can emerge. Re-negotiations are necessary when an existing shipping contract does not align with a company’s business. Audintel has insights on the working of the carriers. Their team of experts will help in negotiations that are favorable for shippers.

The Best practices followed for negotiating Shipping Contracts are:

Gathering relevant data

Before starting negotiations, shippers should have relevant shipping data. The data contains the past performance of the shipping carriers. Reviewing the historical shipping data gives an insight into the most frequent shipping zones, etc. Moreover, the data helps in identifying the rates and factors to determine the transportation needs. Audintel reviews the historical data for providing to-the-point negotiations.

Request for Proposal (RFP) drafts

Shippers send out Request for Proposals (RFP) after gathering data. A good RFP encourages potential carriers to give clients the best, competitive contract. The draft of the RFP includes the background of the shipping company and the types of products sold. Further, it should contain the shipping history, delivery requirements, and terms. RFPs help shippers in reviewing carriers’ proposals and compare their offers. Audintel takes a close look at RFP drafts and suggests shipping carriers to their clients.

Identify accessorial charges and surcharges

Shippers need to reduce additional expenses during shipment. The additional fees are also known as accessorial charges for carriers like FedEx and UPS. These charges occur where there is redelivery of packages, residential deliveries. Further, surcharges include fuel surcharge, after-hour deliveries, Saturday Delivery, additional handling, etc. Audintel helps in identifying the extra expenses. Audintel suggests cost-effective charges so that the shippers can save money while negotiating with carriers.

Review packing strategy: Dimensional weight Pricing (DIM)

The majority of the shipping carriers use a pricing technique called DIM weight. The dimensions of the package are in consideration for the price calculation. Shippers can cut shipping costs by reviewing the packing strategy. Packaging odd-sized materials require efficient use of packaging material. In addition, Audintel can negotiate with shipping carriers to improve the DIM divisor appropriately for shippers. As a result, it will reduce shipping costs.

Use of carriers

For better negotiations, shipping companies can use multiple carriers or single carrier for effective cost. It leverages competition between the shipping carriers so that shippers get the best price for their business. As a result, shippers get better rates. They can choose the shipping carrier with the best delivery performance and rates. Audintel suggests alternative shipping carriers based on the parcel spend characterisitics.

Know the terms and conditions of the contract

Before signing shipping contracts, it is necessary to read all the clauses. It is essential to understand the terms and conditions of the shipping contract. There is a need for regular review for open-ended negotiations. Shippers need to thoroughly read the shipping contract and assess what will be beneficial for business. Audintel helps shippers understand the intricacies involved in the shipping contract negotiations.

The novel approach adopted by Audintel

Audintel follows the above best practices. And we have a novel approach towards contract negotiations. We have an intelligent mechanism in place to enhance your savings. The holistic approach adopted by Audintel is advantageous for clients.

Finally

It is vital to have good relationships with shipping carriers. A business negotiation based on mutual respect and trust will go a long way. Having a good rapport with the shipping carriers will ensure successful shipping contract negotiations.

When you sign up for services from Audintel, negotiations become simple. For further queries and details, write to us at [email protected] or visit our website Audintel, or contact us at +1 (619) 354 8539.