Shift the paradigm at the negotiation table and you can recoup 10%-35% of your overall transportation costs.
In today’s competitive landscape, no company can erode profit margins by paying too much to ship their products. Many companies lack the internal resources to analyze their shipping data and don’t have access to industry benchmarks to effectively negotiate the best pricing agreements with their transportation providers. Companies also rely upon their carrier representative’s word that they have the best rates possible rates. Realize that the carriers have a profit margin to protect; they have strategically created very complex pricing contracts to give them the upper hand in the negotiations.
Understanding the complexity of carrier contracts and utilizing relative industry benchmarks can save you a bundle. Consider these elements when analyzing your transportation program and negotiating your carrier agreements:
1. Consolidate your packages to get the benefit of heavier weight pricing and discounts.
2. Ship deferred, and compare transit days to faster services.
3. Compare and utilize multiple carriers to achieve the best possible pricing and service.
4. Negotiate better rates: you don’t get what you deserve, you get what you negotiate.
5. Set strict guidelines for when shipping express is allowed.
6. Understand the carrier’s soft contract language to avoid hidden surcharge and other factors that could penalize you and cost more.
7. Charge your customers for shipping and handling.
8. Control your inbound shipments by specifying that your vendors must use your carriers instead of choosing their own.
9. Negotiate accessorials surcharge concessions.
10. Audit your carrier invoices for billing accuracy and save up to 5%
11. Continuous improvement through analyzing your freight program and re-evaluating your carrier pricing agreements as well as service performance levels.
You may also want to consult experts to perform a benchmarking analysis and identify savings opportunities that will optimize your transportation foot print and save upwards of 35%. Most experts will perform their bench-marking and optimization services on a contingent compensated model where you only pay a percentage of the quantifiable savings once the new discounts and carrier contracts have been implemented.