Most supply chain executives have thought privately: “I really think this contract could be better.” But understanding exactly how to improve it — and then negotiating for those improved rates in a way carriers will respond to in the negotiation process— can turn out to be a lot more work than they realize.
Just giving a shipping contract a thorough reading can require days of dedicated time. Analyzing shipping data and calculating exactly how much you spend on base rates, oversize packages, rush deliveries, specific contract terms and dozens of other surcharges can take weeks — if your company has that data available, which many do not.
It’s becoming more and more popular for supply chain managers to lean on third-party shipping negotiation consultants for some of this work. It allows them to stay focused on their business while experts review their invoices and contracts. Then, those experts can make tailored recommendations to help companies become better negotiators when it times for the negotiation process to begin.
Resource: Your Guide to Negotiating Better Shipping Rates
What are Third-Party Shipping Consultants?
Shipping can be extraordinarily complex — much more so than most companies realize. Think about your shipping contract itself. Typically, these are dense documents, with hundreds of different prices for different types of service, types of package and distance traveled. And that’s before you count dozens of accessorial fees and surcharges.
It’s becoming more and more common for shipping-based companies to hire a third-party company to help them parse these contracts and negotiate a better agreement.
Consultants at Reveel are highly specialized. Most are former pricing analysts at UPS, FedEx and DHL, meaning they’ve worked on both sides of the shipping business. They’re highly familiar with the language and cost models of carriers, including how shipment costs vary by location and which surcharges carriers are most willing to negotiate.
Third-party billing consultants offer a variety of services for shippers. At Reveel, we can audit existing invoices to make sure carriers are honoring an existing agreement — for example, that they’re giving shippers rebates for a late delivery claim. We offer real-time reporting and analytics services so shippers can understand exactly what they’re shipping, where it goes and how much it costs.
Additionally, we can use all that data to help shippers identify inefficiencies in their contract and prepare to negotiate a better one. We never negotiate for supply chain management leaders; we empower them to be better negotiators for their own contracts.
Occasionally, supply chain managers feel threatened by the prospect of working with third-party shipping consultants — what if their work is so impressive that executives decide to hire them full-time?
Let Us Reassure You: Don’t Worry
First, at Reveel, we see ourselves as your partners. We recognize that most supply chain managers don’t have the manpower or the funding to do the kind of analysis they’d like to. Reveel offers those resources. And we get paid only when our client companies save money on shipping costs. Our consultants are working to save you as much money as possible, because that’s how we make money too.
Second, shipping consultants are becoming more and more common among companies of all sizes. Many Fortune 500 executives work with companies like Reveel. We’ve advised every type of shipping company from the San Diego Zoo to Alliant Insurance.
How Does a Relationship with a Third-Party Shipping Consultant Work?
Shipping consultants like those at Reveel will often start by putting your contract under a microscope. They’ll point out provisions that may be costing you more money than you realize, like price floors, and highlight the surcharges that are disproportionately affecting your shipping spend.
Third-party billing consultants can help you leverage those insights in your next contract negotiation. For Reveel, this often results in our clients saving 15 to 20 percent on shipping.
Further, our consultants understand the nuances of contract negotiation. When companies focus totally on the bottom line, they may not consider unwritten rules that can have long-lasting impacts on their reputation with carriers. Reveel’s consultants know what makes a company seem like a good partner, what looks like flakiness, and how to walk that line to net savings long into the future.
Additionally, shipping consultants can correctly inspect complex carrier invoices for errors and possible refunds. For example, every day, 3 to 5 percent of shipments are delivered late. Most regional carriers promise the shipper a refund on those deliveries. If they haven’t been giving you those refunds, you could be missing out on thousands of dollars in savings.
On an ongoing basis, Reveel offers real-time insights that can help supply chain managers stay on top of trends, be more efficient and identify opportunities for valuable savings.
Why Should I Hire a Third-Party Shipping Consultant?
FedEx and UPS are simply not transparent. Even if your representative has promised you that you’re getting the best possible rate, there is always room for more savings. To find them, you just need to know where to look.
That’s what Reveel’s consultants do. Not only are they industry experts, with years or even decades of knowledge from carriers themselves — but they are honest, transparent advocates who will save you as much money as possible.
This manifests in our six core competencies: transparency, empathy, responsiveness, partnership, learning and perseverance.
More importantly, it’s how we’ve structured our business. There is no third-party risk. We don’t get paid if our clients don’t save money. For contract analysis and negotiation and invoice auditing, we ask our clients to pay a percentage of the money they save on shipping — but there are no up-front fees and no ongoing payment for those services.
How much can Reveel help your cost savings? Give us a call today for a free invoice audit. Let’s find out.
