​It's no secret that parcel contract optimization is necessary for both businesses and carriers what with over $2 billion in refunds and credits going unclaimed by U.S. businesses every year. In fact, according to the Washington Post, neither Amazon nor the Post Service knows for sure what the revenue from their parcel shipping contract is despite the fact that Amazon uses the Postal Service for up to 40% of its shipping.

​Parcel contract optimization ensures that both parties are acting in compliance with their shipping contract and that no party is being overcharged. Parcel contract auditors will analyze contracts for service errors and to determine if any refunds or discounts are in order.

However, the parcel contract optimization market has been affected by the COVID-19 crisis like many other markets have been, and the future of the market is expected to shift. That being said, what market changes can we expect to see and what trends should people be aware of? Here we'll dive into the parcel contract optimization market pre-and-post pandemic.

Pre-Pandemic: Carriers Shifting Gears

Prior to the pandemic, the parcel industry saw significant changes. FedEx chose not to renew not one but two contracts with Amazon, UPS signed a five-year labor contract, and the US nearly departed from the Universal Postal Union.

E-commerce deliveries were growing for multiple carriers. This was especially true for FedEx, which began delivering packages on Sundays via Ground. FedEx also started allowing FedEx Express to hand off some of its deliveries to Ground when they were in the last mile. The trends that were expected to come in 2020 included General Rate Increases from carriers, expectations from consumers for faster deliveries, and increases in carrier capacity.

Current Pandemic: What Is the Market Doing?

With so many Americans staying home and social distancing to combat COVID-19, the e-commerce market has climbed 49% and retail sales have dropped significantly. Additionally, mail volumes are falling and putting greater pressure on profit for the United States Postal Service. Parcel volumes are growing and helping profitability, but the USPS isn't able to profit through types of shipment.

What Trends Are Expected in the Future?

According to Barron's, the probability of change happening for the USPS and other carriers is higher because of the COVID-19 pandemic. Issues that may have seemed small prior to the pandemic are now highly visible, and some shippers specializing in consumer products may continue to see their volumes climb while overs will see declining demand.

Shippers who have seen their volumes decline ought to be wary of their carrier pricing and discount structure. With e-commerce shipments expected to continue to rise and the USPS looking to improve its profit margins, parcel contract auditing, negotiating, and optimizing will be more important than ever. That's where AFMS comes in.

AFMS has parcel pricing experts your business needs to analyze shipping contracts and to provide parcel contract negotiations. For more information on parcel shipping contract benchmarking and contract optimization, contact AFMS today.

​​Many businesses feel confident in their ability to review their own parcel shipping contract when the time comes to renew their contract with their carrier. However, parcel shipping contracts can be difficult to navigate when you're not entirely sure what you're looking at, and you might just end up paying more for shipping than you need to.

This is where the parcel contract pricing support of AFMS comes in. AFMS offers a wide array of services including parcel contract negotiation, parcel contract auditing, and parcel contract optimization to make sure you're getting the most bang for your buck. Here are some of the benefits you can expect to take advantage of when you get parcel contract pricing support.

Know what not to sign

When you choose to work with parcel contract pricing support, you can feel secure knowing that you won't be signing anything that could do your business financial harm. For instance, in many parcel contract negotiations, there's a carrier GSR waiver. Your business should never sign a carrier GSR waiver.

A carrier GSR waiver, or a money-back-guarantee waiver, can mean a loss of revenue between 3-5% for your business. With parcel contract pricing support, you could obtain better incentives and discounts by keeping the Service Guarantee Policy part of your agreement.

Catch possible overcharges

In 2018 alone, there are 87 billion parcels shipped worldwide. Depending on the number of parcels your company ships, it can be difficult to spot overcharges. The good news is that, with support from parcel contract auditors, you can determine whether or not your carrier is overcharging you for your shipments.

Parcel contract auditors can not only ensure that your carrier is acting in compliance with your contract but also that there are no refunds that are in order. AFMS can audit your contract to correct discounts, identify service errors, and more.

Identify changes in the contract

It's all too easy to overlook details and contract changes when you're conducting your own parcel contract negotiation. Unfortunately, even the smallest of contract changes can have a domino effect. An overlooked detail can impact transit times, discounts, and service errors. Professional support during your parcel contract negotiations reduces the risk of signing off on a change that could negatively affect your business.

Interest in working with parcel pricing experts? We've got you covered. For more information on parcel shipping contract benchmarking and contract optimization, contact AFMS today.

View Original Article On FedEx website by clicking here.

When planning your budget, it helps to know the estimated cost of shipping. Here are the details of our shipping rate changes for list rates, surcharges, fees and other factors that can affect your shipping rates. Plus, you can download shipping rates for FedEx Express, FedEx Ground and FedEx Freight.