Parcel Rate Negotiation
What UPS and FedEx don't want you to know
Parcel Rate Negotiation
In the U.S. small parcel industry, a small number of carriers use sophisticated pricing engines to determine your parcel rates. It’s very difficult to get them off their standard rates without an equal level of sophistication on your end. Trans-solutions Consulting can bring this level of sophistication to your parcel rate negotiation process and reduce your parcel shipping costs by 10% to 35%.
Simply comparing rate discounts is inadequate in assessing parcel rates since the rates involve many cost components. A carrier can say “We won’t increase your parcel shipping base rates” but they may take a bigger increase in an accessorial charge such as hazmat shipping, residential delivery or fuel, or they may increase rates on a shipper number. These parcel rate charges must be included, along with any rate discount, to accurately assess the carrier’s proposal. But few shippers have sophisticated tools to capture all relevant charges.
Our Core Strengths
- Visibility to ALL carrier rates.
Unless they want your freight badly, the large parcel carriers will quote you a standard rate. Without visibility to other shippers’ rates, you don’t know what’s possible. As parcel consultants, Trans-solutions has negotiated many parcel contracts and our knowledge of other shippers’ rates is extensive. We leverage this knowledge during negotiations to save your company money. - Proprietary tool.
Trans-solutions has built our own proprietary tool, the Xact Negotiator, to determine, specifically, how a carrier’s proposal affects you financially. For instance, does a discount actually result in savings? The tool functions much like the model used by carriers to determine your rates, making elements of the carrier’s charges visible to the finest detail. Did you know UPS adds fuel surcharges before applying your discount? - Experience.
Because of the volume of parcel contracts we have negotiated, we have an in-depth understanding of the process parcel carriers use to develop these rates and the type of freight they want and don’t want. We know why they give discounts and can work with you to meet these criteria.
Negotiating Discounts on UPS And FedEx Rates
Are you a shipper or third-party logistics provider with a small parcel freight spend? If so, you may be paying higher parcel shipping rates than you should. Contrary to popular opinion, UPS rates and FedEx rates ARE negotiable.
If you’re looking for someone to mow your lawn, our guess is that you know the going rate. Without that knowledge, how would you know how to evaluate bids and prevent someone from overcharging you?
Same with parcel shipping rate negotiation.
Based on our in-depth knowledge of parcel freight and visibility to carrier rates across many parcel freight customers, Trans-solutions can advise you on your parcel spend. We have reviewed more than 500 UPS and FedEx contracts and have hands-on knowledge of what freight they want.
Trans-solutions tools let you analyze your rates like parcel carriers
Trans-solutions has built our own proprietary tool, the Xact Negotiator, to determine specifically how a carrier’s proposal affects you financially. The tool functions much like the model your carrier uses to determine your parcel shipping rates. We make elements of the carrier’s charges visible to the finest detail. By taking these cost elements out of the “black box” and moving them onto the negotiating table, we can negotiate your parcel rates from a position of knowledge and strength.
Real small parcel savings for a variety of Trans-solutions clients.
| Company | Spend | Annual Savings | Savings % |
| Pharmaceutical | $45m | $9m | 20% |
| Pharmaceutical | $62m | $11.7m | 19% |
| Pharmaceutical | $52m | $11.2m | 21% |
| Biotech | $3m | $.75m | 25% |
| Biotech | $2m | $1m | 50% |
| Entertainment | $60m | $15m | 25% |
| Entertainment | $52m | $10m | 19% |
| Retail | $32m | $6m | 18% |
| Retail | $4m | $.75m | 19% |
| Entertainment | $12m | $2.5m | 21% |
| Retail/ Catalog | $6m | $1.2m | 20% |
| Retail/ Catalog | $6m | $1.5m | 25% |
| Electronics | $48m | $7m | 14% |