Effective 2022, major carriers UPS and FedEx will implement a 5.9% increase in their base rates from a 4.9% the previous year. With these annual increases becoming the norm, it’s vital to assess whether it’s time to renegotiate your carrier agreement.
However, it’s not uncommon for business owners to feel stuck with their current agreement. After all, it can be a hassle to try to renegotiate rates and terms and go through the process of finding a new carrier.
Here are key things to keep in mind when evaluating whether it’s time to renegotiate your carrier agreement:
Your business has grown.
If your business has grown significantly since you originally signed your carrier agreement, you may be able to get a better deal on your rates. This is because carriers typically offer discounts for higher-volume customers.
Your business demands have changed, or you’re paying for features you don’t use.
Even if your business hasn’t necessarily grown, what you demand of your carrier is always subject to change. If you now need faster shipping or more reliable service, you may be able to get a better deal by renegotiating. Also, as your business needs changes what your require from a carrier can also change. If you’re paying for features that you no longer need, it’s time to renegotiate the terms of your agreement.
Your carrier agreement is outdated.
If your carrier agreement is more than a few years old, it’s probably time to renegotiate. The shipping industry is rapidly evolving, and you may be missing out on some of the latest and greatest features and services.
7 Tips for Negotiating with Your Carrier Confidently
Once you’ve decided that it is time to renegotiate your carrier agreement, it’s essential to approach the process confidently. Keep in mind that carriers are looking to make money and will do their best to keep you paying high rates.
Here are a few tips for effectively negotiating with your carrier:
1. Know your shipping volume and spend.
This is important for two reasons. First, you need to know how much shipping you do to compare rates accurately. Second, you need to know how much you’re actually spending on shipping to have negotiating power.
2. Research the competition.
Before you approach your carrier, it’s essential to know what other options are out there. Gather quotes from different carriers and compare rates. This will give you a good idea of what’s possible and help you negotiate confidently.
3. Understand your options.
There are many shipping options out there, and it’s essential to understand what each option entails. This will help you make the best decision for your business and avoid paying for features you don’t need.
4. Benchmark discounts and incentives.
To get the best deal possible, it’s crucial to know what competitors are getting. Talk to other businesses in your industry and see what discounts and incentives they’re getting from their carriers. This will help you know what to expect and whether you’re getting a good deal.
5. Get it in writing.
Once you’ve negotiated a better rate with your carrier, make sure to get the new rate in writing. This will protect you in the off chance there were any miscommunications or changes are necessary down the road.
6. Be prepared to walk away.
If your carrier isn’t willing to negotiate, don’t be afraid to take your business elsewhere. There are other options out there, and it won’t take long before you find one that aligns better with your business needs.
7. Have a backup plan.
If you’re shipping time-sensitive materials, it’s always important to have a backup plan in place. This way, if negotiations fall through, you can still get your materials shipped without you or any other parties incurring delays.
Get the Best Carrier Deals – Know What to Ask for and How to Ask for it
Negotiating with carriers can be daunting, but getting the best possible rates for your business is worth it. The good news is that you don’t have to go through it alone.
Reveel’s expert team of former UPS, DHL, and FedEx pricing analysts will take on the headache of negotiating with carriers for you. Using our proprietary benchmarking tool, we’ll tell you exactly how much you should be paying for shipping – and then we’ll go ahead and get those rates for you.
Getting started with us is easy. Simply request a demo today, or sign up for free.
