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March 25, 2020

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A Guide to Parcel Contract Negotiations

For every individual working in the fast-growing space of e-commerce, shipping and transportation play an integral role in the general scheme of your business. They can, to a great extent, be the difference between success and failure. You need your products transported from the manufacturer to your warehouse or distribution center, and you want to be in a position where you can deliver the given products to your clients and expect them to get to them on time. This co-dependent liaison is noteworthy, more so when you consider that shipping takes up around 45 percent of the operational budget of the retailer.

For that reason, accommodating the status quo relative to carrier mix simply since it is stress-free compared to considering a transformation or because they have the lowest rate might lead to a lot of problem in the long run. If you operate a business or are you’re in a position where you oversee shipping and logistics, then it befits you to re-check your existing parcel pricing as well as carrier selection criteria to make sure it suits your corporation.

The Parcel contract optimization and the negotiation are not always simple to address efficiently. Doing your homework to understand better parcel carriers, as well as jargon used in their pricing arrangements, will assist you in negotiations as you will have a more useful set of bargaining tool at your disposal. In the piece, we will discuss how to address parcel contract negotiation and how to master it.

Maybe you are fulfilled with your parcel carrier, the services offered to you and the agreed-upon terms of pricing. Or perhaps you are not. Whether you are happy with the services or not, it is necessary that you understand what was agreed to when you put your pen on the dotted on your existing contract. Unless you have language in the agreement or in a successive addendum that binds you into agreed terms for a given period and forbids you from ending the contract prematurely, you can always re-negotiate with your carrier any time. Bear in mind that everything in that prior contract is open.

Supposing that you already have a current parcel agreement and you need to re-negotiate, the first step should be to check every characteristic of your contract with a fine-toothed comb. In case you don’t understand the lingo, solicit the assistance of someone who does. Seek views or feedback from contacts in the industry with whom you feel free to talk such matters. When probing into the agreement, develop a checklist so that you can determine whether your carrier is conforming to the terms of the contract and fulfilling to their end of the bargain.

It is best that you acknowledge carrier fees that are frequently hidden within the invoice. Known as Value Added Services, surcharges, these are merely extra charges that carrier adds in addition to of the transportation fee which can be as high as 50 percent of the agreed on base rate. These added charges comprise residential delivery charges, Additional Handling Charges and the weekly pick up costs and others.

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