Negotiate Your Freight Agreement from a Position of Strength: 6 Pointers

If there has been a change in your business, it’s likely you need to look at making a change in your shipping agreement(s) and carrier relationship(s) too. When your business and your carrier agreements are out of sync, you’re almost certainly not getting the best deal on your rates.

Below we describe three changes that could have happened in your shipping process and how to use those changes to guide your carrier to giving you rates that fit your business like the proverbial glove.

Along with this go three “commandments” that will help you keep the rates low and avoid unnecessary surcharges.

Your products have changed

The types of products you ship affect the size, weight, class, and density of your shipments. Therefore, if any one of those factors has changed — and especially if more than one has changed — a detailed discussion of your product mix with your carrier could benefit you in a a couple of ways:

  • accurate recording of your product classifications in your LTL tariff
  • possibly securing FAK pricing if it’s appropriate for your freight

Your lanes have changed

Changes in your origin–destination pairs are another key reason to revisit your rate agreements. If your lanes have changed or are going to change, tell your carrier. Accurate and up-to-date lane information will enable carriers to provide you with the best pricing for your freight.

Your volume has changed

Hand in hand with product types and lanes is volume. Has your freight volume changed since your current carrier agreement was put into effect? It’s likely that it has. Higher volume helps you negotiate from a position of strength. Gather thorough and accurate information about your current and projected volume, and take it with you into your RFP or rate agreement negotiation.

And now for the commandments . . .

You will be adaptable

Carriers have to juggle the needs of a multitude of shippers, so rigidity on your part is going to be penalized with higher costs. Take a look at your requirements, figure out where you can be adaptable, and then communicate that to your carrier as you go through the negotiations.

You will be patient

Even among the nicest people, desperation is seen as a sign of weakness, and it certainly puts you in a position of weakness in any kind of negotiation. Even if you do need a carrier right this minute, don’t let the carrier sense that. Be calm and relaxed, firmly state your needs while being flexible where possible, and take the time to negotiate the best deal you can.

You will read every word and numeral

Take that patience with you into reading the agreement from first character to last. Does it include extra charges that are no longer pertinent? Does it include clauses that will protect you, such as for lost, damaged or stolen goods? Also look out for surcharges for hazmat, sorting fees, and fuel. You can negotiate any point that is not reasonable.

Providing your carrier with detailed, accurate information about your products, lanes and volume, in conjunction with patience and adaptability, will help to ensure that your carrier rate agreement is in tune with your business.

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