Advanced Strategies for Negotiating Parcel Pricing Agreements

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Advanced Strategies for Negotiating Parcel Pricing Agreements

Rob Martinez, president and CEO of transportation spend management firm Shipware, offers a couple of tips for parcel shippers who want to save money when negotiating pricing agreements.

MORE FROM THE
OPERATIONS SUMMIT

With fuel surcharges impacting shippers, what are a couple of things they can do to lessen the financial blow? Ask for and negotiate a discount.

“We’ve seen FedEx and UPS give anything from a 10%-100% discount on fuel surcharges,” Martinez says.

Every January, UPS and FedEx increases pricing an average of 5%-6%, but these General Rate Increases (GRI) are negotiable, Martinez says. “Add language to your carrier agreement that caps the annual increase at 2% per year. For example, if the GRI is 5.9%, and you’ve negotiated a two-point reduction, your effective rate increase is only 3.9%.”

If you want to know more, Rob will be speaking on this topic at the Operations Summit in Memphis May 2-3. For more information, go to
http://www.operationssummit.com.

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