Many businesses have a tendency to go hastily through small package contract negotiation processes. Unfortunately, many of these entities to end to have a large, small package or parcel spend, but a small package outside negotiator can help save significant revenue. Rather than only taking small package contract negotiation at face value, shippers need to understand why a small package contract negotiator is vital to reducing spend and what best practices can further savings in both the short-term and long-term goals.
A small package contract negotiator has more experience cumulatively than anyone in your office staff. For example, the negotiator works with more than 3,500 carriers of different sizes to ensure the best small package rates and contract stipulations are retained. Moreover, small package contract negotiation is not a process that should be taken lightly. Some shippers may feel small package contract negotiation is only something to look at in the days before contract renewal. In reality, the small-package contract negotiation should follow a series of sequential steps to achieve the best savings possible.
Using a small package outside negotiator is also beneficial as it reduces the amount of red tape and legwork required of your internal staff. The negotiator will work to define what your current processes are, what needs to be changed and what services you need among many other tasks.
It can seem as though small package contract negotiators are completely immersed in getting you the best rate and terms. However, your business can be proactive during the process if you know what best practices to follow. These best practices reflect both the steps your negotiators should take and how your business can further the savings. During your small package contract negotiation, consider following these best practices and how they relate to the use of a small package outside negotiator.
Benchmarking your current processes is the most important step in small package contract negotiation. If you do not complete this process, you cannot realistically determine how your current processes are functioning, which further lends itself to defining what processes need to be improved or reduced to maximize revenue. More directly, benchmarking let you see what you need. When you use a small package outside negotiator, you do not have to worry about developing internal resources, such as staff members or computer terminals to complete this analysis.
After determining what you need, your business should focus on small package contracts and turned that satisfy your required service levels. In other words, this is finding the right balance of value-added services and shipping option to reach a heightened return. During the negotiation process, the outside negotiator will work to create large requests for proposal (RFPs), which contain all of the details of your needed service levels, for each carrier.
There is another step that is part of the RFP process, and it involves highlighting how your business will benefit the carriers bottom line or public perception. For example, green businesses may be able to help carriers achieve incentive-based savings as government organizations become more involved in preserving the environment. This is one of the critical best practices small shippers can take to help carriers provide more competitive rates and services, explain John Heckman of Inbound Logistics.
Incentive discounts are similar to the benefits your business brings to the carrier, but that does not mean they are inherently identified during the small package negotiation process. As a shipper, you or your contract negotiator should ask for base incentive discounts, and these discounts should be included in writing within the response to the RFP.
During small contract negotiation, your business could potentially receive thousands of lives on what you need. As a result, sifting through these documents represents a significant internal time investment. However, an outside negotiator can eliminate all of that work for you by reviewing all bids and selecting the most profitable and beneficial carriers.
Outside negotiation is made more attractive as outside negotiators have a third-party viewpoint of what is and is not considered ideal solutions for unique businesses. In other words, your negotiator should suggest which carriers your business will benefit most from, but you still should have a voice in selecting the winning carrier, which is a fundamental part of small package contract negotiation with Cerasis.
Implementing the terms of your small contract is the final step in successful small package contract negotiation processes. Pricing needs to be implemented correctly, and you need to work to make sure your company is receiving the appropriate services defined within your contract. For example, Cerasis works to monitor carrier invoices for instances of double billing, incorrect freight classification, and other potential errors. As a result, you can get more saving from your small package contract negotiation and sequential processes. In other words, your small package contract negotiator needs to be present after negotiations are complete.
Small package contract negotiation does not have to be a burden, and your business could realize significant reductions in the small package by thinking outside of the box and utilizing third-party small package contract negotiator. In fact, small package contract negotiator should work with you through a compensation model that warrants payment as cost savings are realized in future months. In other words, there is little upfront investment in using an outside negotiator.
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