Small Parcel Negotiation with FedEx and UPS

Posted by shiprx on February 12th, 2021

Business owners often make the mistake of reviewing their contracts at the time of renewal. One should always review their deals occasionally.

The best method to decrease shipping costs is to negotiate your present small parcel contracts to obtain lower rates from FedEx and UPS. Did you know you can also lower your shipping costs with a small parcel audit? You can consider using small parcel management software for parcel audits for FedEx, UPS, and DHL invoices.

Here are several tips for you to negotiate your shipping contracts. Let's know more about them.

Tips for Small Parcel Negotiation

• Keep Your Data Ready-You need to provide all the information about your shipping structures, special requirements, supplements, and quantities to your carrier. By doing so you increase the chances of lowering your shipping rates. If you fail to provide all this data, you will have to pay a much higher shipping rate to your carrier.

• Understand DIM- Remember both FedEx and UPS use dimensional weight pricing for packages. This pricing system calculates based on the space occupied by the packages.

However, understanding the divisor value is very vital. So note that the higher the divisor, the lower the rate. This pricing system is new. If your deals were made before the new system was introduced, know its impact on your costs.

• Examine Your Invoices- Remember auditing invoices can provide you the points where your costs can be reduced. Going through the recent invoices can show the places you've spent the most. Accordingly, you can reduce those costs.

However, auditing can vary from carrier to carrier. FedEx audits differ from UPS audits.

• Keep Checking the Rules and Surcharges- Always be attentive to the rules and the surcharges. Rules keep changing and the surcharges can be very tricky. FedEx or UPS often have surcharges that you'll be able to see only in the invoices at the month-end.

In this case, invoice auditing helps a lot in saving money.

• Review the Contract Regularly- As mentioned earlier reviewing your agreement occasionally is an integral part of small parcel negotiation. If you don't understand any part or term of your contract immediately consult an expert or your carrier representative. Don't assume everything.

Summary

If/when a contract does not align with a business, the owner should consider renegotiating. Remember while negotiating small parcel shipping rates, your approach can make a huge difference. Besides, the above-mentioned tips should help you through the process of negotiating shipping costs.

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