Don’t Overlook This Important Step Prior to Holiday Shipping
This time of year, e-tailers are finalizing preparations for seasonal sales spikes. Efforts have included everything from stockpiling inventories to bolstering the labor force. However, one important and necessary action many have overlooked will contribute to higher costs and lost profits.
Has your organization recently negotiated better shipping discounts with FedEx, UPS and other parcel carriers? If you haven't — and based on Shipware's research that includes most of you — it could cost your organization tens of thousands of dollars (or millions for larger operations) through the holiday season alone!
If you're like most shippers, two thoughts are stopping you:
- you believe you already have good discounts in place; and
- the holidays are already upon us — you don't have time to work out a new contract.
As an outside consultant who has analyzed parcel contracts every day for the past 25 years — on both sides of the negotiating table — you're likely spending more than you should. Nine out of 10 parcel contracts can be improved by 10 percent or more. This is based on direct experience having worked with hundreds of large shippers.
It's not too late to make changes to your parcel contract over the next three weeks to four weeks in order to have new, lower rates in time for Thanksgiving. The process can take as little as a few hours, and new, lower pricing can be coded in as little as a week!
So, how do you get FedEx, UPS and other parcel carriers to improve your pricing, and to do it quickly?
Use your business and pending volume as leverage. FedEx and UPS want your seasonal business. They're typically willing to concede small contract improvements than risk losing business to competition. And minor changes can have significant impact.
Rob Martinez is the CEO of Shipware LLC, a professional services firm that transforms businesses through intelligent distribution solutions and strategies. Rob has helped some of the world’s most recognizable brands reduce parcel shipping costs an average of 25 percent through contract negotiations, rate benchmarking, modal optimization, invoice audit and other savings vehicles. A cum laude graduate of UCLA, Rob has 20 years of transportation industry experience, including executive positions at DHL and Stamps.com, in addition to his work as an outside consultant since 2001.