Contract Negotiation: Why Do It Alone?

This probably goes without saying, but large national carriers may not have your best business interests at heart. From hefty rate increases to hidden fees, they’re in business to make money. That’s understandable, but how can you ensure your contracts with these carriers represent real value for your company? How do you know you’re getting market appropriate rates for the level of service your company needs for your parcel and less-than-truckload (LTL) shipments? 

For many companies, it’s typical to manage their carrier contracts in-house. In many cases, companies simply may not know how to find a knowledgeable partner to help them optimize their parcel and LTL shipping or negotiate complex contracts.     

The problem with managing carrier contracts in-house is that individual shippers don’t have access to the carrier rates and data points of what the current market is bearing. They don’t know the relative importance of their shipping volumes to a given carrier compared to others trying to move their freight, so they lack any sense of leverage and control. Shippers also may not be fully aware of options beyond the biggest national carriers like UPS and FedEx. And they may not be applying best practices or process optimization techniques in their internal shipping operations that could drive big savings on their overall parcel and LTL spend. 

And, while carrier contract management teams have been well trained in firm negotiating techniques — and armed with advanced technology tools — shippers typically lack the ability to invest in coaching, upskilling, data collection and other proven tactics to facilitate a successful negotiation. 

That’s where Redwood Logistics comes in. As a Modern 4PL, Redwood has helped hundreds of companies optimize their parcel and LTL shipping activities, from hands-on execution to contract management, benchmarking and advisory services. Redwood’s experienced, knowledgeable team of experts has a big-picture view across many different LTL and Parcel networks, proven best practices, and volume leverage to ensure every customer gets maximum results during their contract negotiations. 

Four Steps to Better Rates, Better Service and Other Wins

Based on its work with hundreds of businesses just like yours, Redwood has created a simple four-step process, which spans just 45 to 60 days, to ensure you’re coming out on top during contract negotiations: 

1. Shipping health assessment. It all begins with a no-cost, no-obligation audit of your current parcel and LTL shipping activities, including your shipping patterns, carrier mix, network model, packaging strategies, contract terms and cost drivers.
2. Identification of cost and service improvement opportunities. Based on that assessment, Redwood identifies practical opportunities to improve your cost and service results. This could include a new carrier mix, or renegotiating contract terms with your current transportation partners
3. Coaching and definition of analytics. Next, Redwood sets the stage for significant cost improvements by helping your team define new contract targets — leveraging Redwood’s established tariffs and coaching your team members on successful negotiation strategies. Redwood also creates dashboards and metrics that help your team visualize and measure actual improvements in your parcel & LTL shipping outcomes.
4. Continuous analysis and improvement. Following contract negotiations, Redwood continues to help your team measure and optimize outcomes. Carrier scorecards analyze not only costs, but also service levels. When disruptions occur, are your carriers prioritizing a resolution? Cost is a crucial measure of parcel and LTL shipping success, but not the only one.

Rely on Redwood’s Proven Results 

By partnering with Redwood to optimize their parcel and LTL shipping, customers typically save 15-25% on their annual shipping costs in the first year alone. Beyond the initial contract negotiation stage, Redwood continues to add value by re-optimizing customers’ shipping strategies over time, adapting to changing needs and market conditions. 

It’s easy to feel overwhelmed and outnumbered when negotiating with large carriers who seem to have all the power. But Redwood’s expert team stands behind you, shifting the power in your favor. They understand how to match your shipping patterns and requirements with the right carrier mix, along with top-tier contract terms that deliver an optimal balance between cost and service. When rate increases and new surcharges are introduced, Redwood experts assess and mitigate the impacts on your parcel and LTL shipping activities. 

For customers who want to outsource their physical shipping activities and fully focus on their core business, Redwood also offers full-service Parcel Execution tools and Transportation Management services. 

Why go it alone when you can save up to 25% in just one year by leveraging Redwood’s proven strengths in parcel and LTL shipping and contract negotiation? Get started today by scheduling your free, no-obligation shipping health assessment.