Negotiate Carrier Rates Like A Pro!
One thing all shippers deal with is negotiations. And as most shippers know, negotiating the best shipping rates is one of the hardest things to achieve. It takes a certain level of rapport with specific carriers to gain the type of rates we all dream about. And even with a good rapport, this is still business.
So, while you may gain a bit more leeway with that carrier, they also still need to make a profit… always be ready to negotiate.
For many shippers, the whole process is just too frustrating, intimidating, or time-consuming to even begin. It’s a major reason why several shippers choose to partner with a 3PL to help them negotiate carrier rates on their behalf.
In this blog post, we’ll provide a blueprint that will help any shipper negotiate better carrier rates. Many of the items listed below are the same steps taken by professional 3PLs and they can be quite effective at helping you acquire shipping rates that won’t break the budget.
Work with Several Carriers in Each Movement Mode
As the old saying goes, volume cures everything. This saying holds true in regard to the supply chain, especially when it comes to the shipping rates offered by carriers. Basically, the more you ship, the lower your rates per mile.
However, carriers are quite competitive. If they know that you are working with their competitors as well, they tend to offer likewise competitive rates.
Anytime you are in the rate estimates process, make sure to reach out to multiple carriers in the same mode. Don’t be shy about letting them know if you’ve got a better freight rate from a competitor either. Sometimes, this added pressure is the best leverage in negotiations!
Book Shipments for Clients and Partners Using Your Account Number
Rewards cards at shopping centers are an example of creative marketing programs offered by businesses to track consumer shopping.
However, the trade-off is that it provides discounts and even some free ‘stuff’ based on the volume of use. Many carriers do something very similar to this, just without the cards. Instead, they offer their rates based on your shipping history, which is, of course, linked to your account number.
If you have shipping partners who need to set up shipping, let them use your account number, as well! When a shipping recipient sets up the order but does not use your account number, it’s possible that your company will not get ‘credit’ for that freight movement. Even if you are working as the third-party provider and your company name is listed, if they list their own account number, they reap the “reward points”.
Use Carrier-Specific Packaging
This one applies to parcel or overnight shipping like Fed Ex, UPS, or USPS. Today’s overnight or express delivery companies use dimensional or DIM weight calculations to determine freight charges. Basically, it calculates your freight’s volume vs the weight to determine a cost based on the dimensions. However, in most cases, DIM calculations that can be costly are eliminated by using their branded packing supplies.
Many carriers offer single-rate freight when you use their boxes or packing materials; in some cases, up to 15% off.
Get Estimates from Regional Carriers for Short-Mileage Movements
The regional carrier is making an aggressive move with expansion in logistics – especially in the United States. Many carriers are embracing the concept of ‘staying in their lane’ by offering local or regional services for those shippers that move freight between the same state or within 500 miles. Several of these regional carriers offer lower rates for multiple reasons – including their network of flexible drivers who prefer to stay close to home.
When you’re negotiating shipping rates, get estimates from regional carriers and consider adding them to your network of go-to carriers when the larger companies are not flexible with their rates or availability.
Work with a Proven 3PL
While these steps above are quite easy to implement into your freight rating and estimation process, some shippers simply think it’s too time-sensitive or difficult to implement. If you’d like to rapidly improve your shipping rates for all modes of transportation, consider working with a proven third-party logistics company like Redwood Logistics.
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