According to NBC26, FedEx and UPS ship more than 34 million packages every day. All these items attract charges that range from a few bucks to hundreds of dollars. If you have a big shipment coming in through the usual carriers, here are must-know tips you can use to lower the applicable charges.


Top Surcharges Have a Great Impact on the Final Sum

In many cases, surcharges can be reduced if you make a compelling case to the shipping agent. Generally, it’s easier to negotiate on some surcharges rather than others. For example, residential and common fuel charges are unlikely to be scrapped because they are based on the distance of the shipping.


Discounts and Incentives are Better than Value-Added Services

Incentives are greatly helpful and should be used, especially when you want to make claims for incorrect dimensional weight charges. If the shipping agent insists on their value-added services, make it clear that you appreciate the kind offer but are looking for discounts on the full parcel shipping contract.


Service Refunds Make Shipping Less Risky

What really sets a shipping company apart from the competition is the refund policy. If you are going for the top brands, it helps to compare the terms. In many cases, companies that have invested heavily in protecting your shipping and reducing errors will have better refund terms.


Be Bold Enough to Negotiate

Knowing how to negotiate for cheaper or friendlier terms when shipping is a valuable skill that will serve you well. Shipping contracts will determine whether you can claim refunds or discounts for inconveniences such as incorrect dimensional weight charges or delays in package arrival.


With at least 2,760 packages being shipped every second, you want to protect your packages at the cheapest costs possible. Learning some negotiation tips will help you secure the best contracts especially if you are a regular customer or tend to move expensive merchandise.


Contact us today if you are looking to learn more about parcel contract negotiation.

The global parcel shipping industry is experiencing a transformation as e-commerce and online services rush to adapt to changing consumer needs and behavior. In the last decade, the global parcel volume has more than tripled. In 2019, the parcel volume reached 103 billion parcels, up from 87 billion units delivered in 2018.


The Prices Also Shifted

For 2021, most traditional carriers have already announced their General Rate Increase (GRI). FedEx announced a 4.9-5.9% increase for 2021. USP announced a similar rate of approximately 4.9% increase. Additionally, there are extra surcharges placed on some shippers.


With the tumultuous year that 2020 has been, the expanding costs of parcel shipping may continue to challenge companies that are fighting for survival in these tough times. However, you do not have to let your carrier's GRI dictate your budget in its entirety. You can seek parcel shipping contract negotiation support that can help you save more money.


Optimizing Your FedEx and UPS Rates

Firms such as AFMS continually track and analyze the market changes to better serve you in getting your carrier GSR waiver. Parcel contract auditing, negotiation, and optimization can help save your company's bottom line. Here are three tips to help you save more on your parcel shipping costs.


1. Understand Your Data

You may need to sit down and pour over your data to familiarize yourself with the numbers before heading out for the parcel contract negotiation. With a variety of hidden fees and discounting options, staying informed about your shipping profile can help you have the upper hand as you negotiate with the carrier's rep. Understand your weekly package volume, the average cost per package, the average time in transit, and service type mix (LTL, FTL, ground, express, etc.)


2. Craft A Plan of What You Wish to Achieve with the Optimization

You may need to come up with a plan that will help you save money. It would be in your best interest to bring in parcel shipping consultants such as AFMS to help you craft a strategy to achieve your optimization goals. Their carrier reports can help even the negotiation playing field, allowing you to double on your discounts. You can identify 5 or 7 points of optimization that you wish to achieve and understand their impact on your shipping costs. Remember to focus on the bigger picture, the overall impact of the contract rates.


3. Talk to Multiple Shipping Carriers

FedEx and UPS are the two most popular carriers in the US. It is always smart to speak to smaller parcel shipping companies and understand their rates and services. Find out how they can meet your company's needs and those of your customers. You may need to negotiate the best deal as a shipper, and carrier pricing experts such as AFMS can help you achieve it.

With UPS and FedEx announcing a General Rate Increase (GRI) for 2021, it may be time for your business to consider entering into a new parcel contract negotiation to determine the best possible shipping rates. Unfortunately, your parcel shipping contract may not be as cost-effective as it could be: it is estimated that over $2 billion in credits and refunds go unclaimed every year by businesses in the United States.
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The best way to ensure you are receiving the best available shipping rates for parcel contract optimization is to be informed of all the options available to you and your business. Below are some items to bring to the table for negotiation support when you are looking to settle the best possible parcel shipping contract.

Parcel Contract Auditing
Parcel Contact Auditing is a great way to analyze your shipping contract before a parcel contract negotiation. Audits are in-depth reports that have the potential to save you big money on shipping costs. These audits, when performed by experts, can determine whether or not your shipping company is charging the correct rates, your eligibility for a guaranteed service refund (GSR) or GSR waiver, potential billing inconsistencies, and recovery of funds for items lost during shipping. A line-by-line analysis of your shipping contract by an expert is the best way to gather important information before a parcel contract negotiation.

Negotiation Support Through RFI and RFP
It is essential to have as much information as possible during a parcel contract negotiation. This is where a third-party pricing expert may be useful in offering negotiation support. Using a request for general information (RFI) or a request for proposal (RFP), a third party may be able to assist you in developing a strategy for information gathering.

For example, an RFI can be useful because it presents facts and essential information from a shipping carrier such as basic products, services, costs, and approaches to the marketplace. An RFP can also be an important asset to a parcel contract negotiation because it is more specific than an RFI and may rely on the carrier to provide alternative solutions to your company and its shipping needs.

Parcel Contract Benchmarking
Benchmarking studies can also be an important asset when negotiating a parcel shipping contract. A detailed benchmarking study can be undertaken by a third party to determine if any savings opportunities are available to you. Benchmark analyses can also be beneficial in other ways as they can also identify whether or not you are eligible for certain discounts on your shipping rates, and also compare your shipping costs to other similar businesses in the marketplace. A detailed benchmarking study completed by a third party expert is an essential tool to your parcel contract negotiation because it contains valuable, in-depth information that can ensure you receive the best shipping rates when negotiating your parcel shipping contract.

When entering into parcel contract negotiation, it is important to be in possession of as much information as possible. A third-party expert can help you and your business perform analyses such as benchmarking studies and parcel contract auditing that give you a better understanding of your current contract—and how it can be improved.

Additionally, an RFI and an RPF can be useful ways to gather information from the carrier themselves such as how they operate, what they offer, and what they can do for your business. Information is the best tool for a successful parcel contract negotiation, make sure your business is armed with the most informed and detailed material available to ensure you are guaranteed the best shipping rates possible.

In 2018, approximately 13 billion parcels were shipped in the United States. With shipping rates set to increase in 2021, the cost of shipping these millions of parcels is set to go up significantly for you and your business.

The FedEx and UPS General Rate Increase (GRI), may have a significant impact on the shipping industry moving forward. This is why it is important to consider employing a third party pricing expert to determine the best available shipping rates for your business. Below are the best reasons to use a third party with inside pricing knowledge to assess your pricing needs—and find you the most cost-effective solutions.

Benchmarking
A third party pricing expert will be able to find you the best pricing opportunities for your shipping needs. Benchmarking studies can determine any possible savings opportunities, review your current shipping carrier discounts, and ascertain if your current rates are in line with other businesses with similar shipping needs. These benchmarking studies will ultimately benefit your current parcel shipping contract because they can offer informed and detailed information. These analyses also serve as data for negotiation support when you want to compare rates and consult with shipping companies to develop a new parcel shipping contract.


Experience and Expertise
Third party pricing experts must have the necessary expertise to conduct the studies mentioned above. This is why it is essential to choose a company that has experience in consulting, pricing, logistics, and expert knowledge of the shipping industry and markets. An experienced pricing expert will not only offer detailed, fact-based benchmarking studies but also negotiations support to ensure you get the best shipping rates based on in-depth analysis of shipping invoices and data.

Big Savings
The ultimate objective when consulting a third party pricing expert is to save you money. This is not only done through benchmarking, analysis, and negotiation, but through parcel contract auditing. Parcel contract auditing assesses your current costs and determines whether you are overspending, eligible for any discounts or a guaranteed service refund, or if there are any invalid/fraudulent charges on your account (to name a few). These reports are an essential part of the process, and, when coupled with parcel shipping contract benchmarking, can ensure that you get the most optimal contract available.

Shipping costs account for a large part of your business overhead, so it important that you determine whether you are receiving the best possible rates. A third party pricing expert can help with an informed analysis of your current parcel shipping contact, performing detailed benchmarking studies and audits that evaluate your current spending to determine the best possible rate. By offering negotiations support, thorough assessments, experienced and expert advice, and opportunities for potential service refunds, third party pricing experts are the answer to all of your shipping needs—improving your business, and your bottom line.
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Did you know that more than $2 billion, in the form of refunds and credits, are unclaimed every year by U.S. businesses? This means that it is especially important to be aware of parcel shipping costs and how your carrier could be impacting expenses. From UPS refunds to avoiding GSR waivers, you should always make sure to stay up-to-date on ways to save. Keep reading to see some of the top ways to negotiate shipping rates with FedEx and UPS in 2021.