Three Ways an Expert Can Put You at an Advantage in Carrier Agreement Negotiations

Protection of your goods, budget, on-time delivery, and your customers’ satisfaction level — all of these are partially or completely in the carrier’s hands. The success of your business rides to a large degree on the success of your relationship with your shipping partners — the carriers. Your carrier agreement is the foundation of that relationship. Being able to negotiate the best shipping terms and rates is a point of pride with many logistics professionals. However, a third-party consultant has access to information that could help you get significantly better rates.

The carriers negotiate agreements every day, and the success of their company is dependent on their negotiation skills and ability to secure agreements on their terms. Shippers have much less experience, and also less access to the accurate and relevant information that will give them the upper hand.

Bringing an outside expert on board for your next carrier agreement negotiation is one way to level the playing field. Let’s look at three of the top ways a third-party consultant could provide value during the negotiation process.

Getting Competitive Rates

Of course you want competitive market rates for your shipping services, but do you know what those are? A third-party expert who sees a lot of agreements has a very good understanding of what’s a competitive rate and what is not.

Taking Trends Into Account

Unless you spend a considerable amount of time following market trends, it is very difficult to forecast the long-term impact of those trends and how to plan for them. For example, the recent general rate increases (GRIs) are affecting your small parcel rates, but given all the factors involved (particularly the surcharges and accessorials), it’s difficult to understand exactly how they will affect your business over the longer term. Your carrier agreements, however, are based on where the industry will be months or years from now, not where it is today.

Understanding the Carrier’s Costs

The carriers’ pricing models and strategy are based on their own costs to service each shipper’s routes and volumes. Without a good understanding of the carrier’s costs to service your business, you don’t have access to some of the key information necessary to negotiate rates that will benefit both you and the carrier — which is the foundation of a competitive agreement and a good working relationship. An expert who has this insight can guide you in negotiating an agreement that benefits your bottom line and strengthens your partnership with the carrier.

In 99.9% of negotiations, the party that has access to the most key information will have the advantage. A shipping consultant can give you access to the valuable information that will get you the low rates and competitive terms that you want from your shipping agreement.

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