Top 5 Things to Negotiate With Shipping Carriers
Did you know that you can negotiate with shipping companies over service fees and charges? Now you do, and that probably already has you excited. After all, shipping is a huge expense for part retailers, and also a great place to squeeze out some additional margin.
While this is not a complete list of price negotiable services, these are important things to consider negotiating with your carrier.
Dimensional Weight Pricing
In 2015, one of the biggest shipping changes was the addition of Dimensional Weight Pricing (DIM weight) to every packaged shipped using UPS ground. This used to only be applied to packages larger than three cubic feet. This new process can really rack up the fees and is certainly worth negotiating with your carrier.
UPS applies a surcharge to any delivery to or from a residential location, even if you have a home business. Even if you could negotiate this charge down a few cents per transaction, you can save a good amount over a year’s time. For example, UPS charges $3.50 per transaction, if you could negotiate that down to $3.10, you’d be saving around 5% of your total shipping cost over 1,500 transactions.
Insurance is an item that allows for several areas of negotiation. Say you’re shipping a package with a value of $1,000, UPS would cover the first $100 for free, leaving $900 in the wind if something happens. To have the rest covered, it could cost $8.10, or $0.90 per hundred dollars. You could try to negotiate how much is covered before you pay, or the rate you pay per hundred dollars.
Large Package Surcharge
A package that exceeds 130 combined inches will have a Large Package Surcharge applied to it. They are also subject to a minimum weight of 90 pounds. The fee for a large package is a set $57.50, but there have been cases where this fee was negotiated down by as much as 50%.
Collection on delivery comes with a service charge of $12.50. The important thing here is to try and work down any added services to keep the fee from becoming astronomical.
The biggest take-away here: Your negotiating leverage will depend greatly on the volume and frequency of shipping through a particular carrier. Sometimes you’ll find that you’ll get a better price on certain services that you use more frequently than others.
The best plan of action is to shop carriers, get quotes, and approach your carrier with incentives from their competition. That increases the odds that you’ll get a good deal.
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