Why Shippers Need a Carrier Contract Negotiation Partner

Shippers are overpaying their carriers and don't even know it. That's right, carriers are often inflating margin collections. Without an industry-knowledgable carrier contract negotiation partner, shippers can mitigate these excessive margin collections and find significant cost savings. The truth is, most companies have no idea how much money they are leaving on the table with their existing carrier contracts. Nor do they realize that working with a carrier contract negotiation partner can enable them to save considerably. In fact, some shippers could save up to 18% on their shipping costs with a carrier contract renegotiation. Who wouldn't like to save 18% on shipping costs?However, not all carrier contract negotiation partners are created equal. First and foremost, shippers need to find a partner that has deep industry knowledge and experience in order to work with carriers to negotiate the best possible contract. Contract negotiation partners need to be able to analyze the entire supply chain, using deep analytics and technology-powered solutions to identify opportunities for cost savings with a new contract. Carrier contract negotiations need to be built on a data-driven approach:

1. Analytical Assessment

When a carrier contract is up for renewal, the first step in negotiating a new contract is to analyze historical shipping data, enabling you to have a holistic view of how carriers see your business.

2. Validating KPIs

Every shipper has their own unique Key Performance Indicators and any worthwhile carrier contract negotiation partner will be able to industry-wide knowledge in order to validate internal KPIs with industry-wide data.

3. Analyzing Cost

Negotiating a new contract that is more advantageous requires a partner that can identify existing costs and inflated margins by service, weight, zone, etc.

4. Benchmarking

The value of having vast industry knowledge is found most in the ability of a carrier contract negotiation partner to benchmark costs against industry-wide data. By having access to this data, they can develop better RFPs. In addition, being able to understand the true impact of a new contract on a shipper.