The surge in demand for e-commerce has significantly impacted relationships between businesses and carriers. More parcels are being shipped every day and world events such as the Covid-19 pandemic pushed this trend even further. Even if you were happy with your parcel contract before, now may be the time to renegotiate to ensure that you are getting competitive rates.
When you enter into a contract with a parcel carrier, generally both parties will be at least partially satisfied with the agreement. However, as time goes by, things can change. You may be in a position where you need to change some of the terms in your contract.
In these situations, it’s important to have a game plan for how to negotiate or even renegotiate rates with your carrier.
In this article, we will outline 10 tips to effectively renegotiate your parcel contracts.
The Four Best Renegotiation Techniques for Parcel Contracts
This advice is in no particular order but is all of equal importance. The main things to keep in mind are to express your needs clear and respect everyone involved in the negotiations. Keep your cool, keep your thoughts in order, and you’ll come out on the other side of the negotiations relatively unscathed.
Know Exactly What Your Business Needs
If you’re considering renegotiating your contract, you probably realize that there is something wrong with the existing terms. But specificity is important when updating your terms.
You should be clear and confident in what you need and make sure that your carrier understands exactly what you’re looking for. If either party is uncomfortable with changing the terms after this preliminary discussion, it may be time for you to seek out a new carrier.
Respect Your Carrier’s Needs
It is important to remember that your business is not the only entity involved in these renegotiations. The carrier’s concerns are equally important. It’s good practice in all areas of business relationships to avoid burning any bridges.
Depending on what your reasons are for renegotiation, you may determine that you can incentivize the carrier in another way. This will help both parties get something out of the new contract. Furthermore, it won’t make your carrier feel like you are trying to take advantage of them.
Hope for the Best, But Prepare for the Worst
It’s very possible that this renegotiation discussion could go exactly how you want it. Leaving both you and the carrier satisfied and in a better relationship than you were with the old terms in place.
However, it’s equally possible that your renegotiation plans could fail spectacularly. This is something to be avoided at all costs. You want to ensure that your carrier will complete all in-progress business, even if you decide to go with a new carrier later on. If not, you may find yourself scrambling to find a new carrier. This also means that you may have to enter into an even worse contract than previously in order to keep your business afloat.
Remember that there is only a finite number of carriers out in the field, and you don’t want to develop a reputation as “hard to work with.” Otherwise, your contract terms won’t be your only concern.
Know What Your Competitors are Paying on Their Parcel Contracts
If an issue with your carrier is cost, analyze what the others in the field are paying. If you are over-paying, make sure that you articulate that concern to your carrier.
Do some research and see where you stack up against those similar businesses in your field. Every business should be treated fairly by its carrier.
It would be great if you could stay in the same contract with the same carrier forever. Things would be so much simpler if all parties were in a perfectly happy agreement. Unfortunately, this is simply not how that relationship works. Events such as the pandemic of 2020 and changing market trends factor into the need to renegotiate parcel contracts.
If you find yourself in a situation where you are no longer satisfied with your current contract, just remember the four tips listed above, and go confidently into your renegotiation discussions.