The Price Is Right: How Shippers Can Negotiate More Competitive Carrier Rates

To negotiate more competitive carrier rates and protect their bottom line, shippers need to approach the negotiation table from an informed, empowered position—or they might end up overpaying. This requires not only comprehensive, up-to-date shipping data but also a keen understanding of what competitors are paying.

Whether you’re establishing a relationship with a new carrier or renewing a contract with a longtime partner, here are some tips to help you improve your negotiations and ensure you’re getting the best possible rates.

Gather benchmarking data

On the surface, a proposed rate might seem like a fair price, especially if you’re going by gut instinct alone. But before locking it in, it’s always worth digging deeper—because that good deal may start to seem like daylight robbery the more information you gather.

Benchmarking your company’s own shipping costs on a regular basis allows you to easily compare proposed pricing against what you’ve previously paid. Of course, shifts in the market can cause pricing to fluctuate, so you might not be able to get the same rate during a capacity crunch, for example, that you did in previous years, but this exercise can still help you approach negotiations from a more informed standpoint.

You can also analyze what competitors are paying to ensure the rates a carrier is offering are truly competitive. This isn’t easy to do alone, but working with a logistics provider like CTSI-Global that has extensive reach can provide a clearer view of industry-wide trends—further strengthening your negotiating power.

Evaluate a carrier’s past performance

Before renewing a contract with an existing carrier, confirm they deliver on their promises. If they’ve fallen short in the past, this is something to factor in before blindly agreeing to the same price, or even a rate hike.

It pays to bring concrete data to the table to prove your case. If you use Honeybee TMS™ from CTSI-Global, you can leverage the carrier report card feature on your analytics dashboard to compare and drill down into a carrier’s performance, helping you determine both the value of the partnership and any specific terms you’ll need to negotiate. If the carrier has historically charged high accessorial fees, for example, and is unwilling to adjust their rate or waive these fees in the contract, the relationship may prove too costly to preserve.

Weigh up other options

Before approaching a rate negotiation with a carrier, take the time to explore the alternatives available to you. As the saying goes, there are plenty more fish in the sea—and if the carrier is unwilling or unable to offer a rate you’re comfortable with, it’s useful to know in advance whether you have other options.

Test the water with other carriers and find out what kind of rates they can offer—especially if you haven’t explored the market for some time. When you know what other carriers are able to charge, you can take the best rate to your preferred carrier and see if they’re willing to match it. If you work with CTSI-Global, you can also leverage our powerful modeling application to evaluate alternate scenarios, compare proposals, and optimize distribution.

Find the right carrier rates, every time

When your budget is tight, an effective negotiation strategy can make all the difference. CTSI-Global’s data-driven solutions and industry-wide reach can help you approach negotiations with confidence—and walk away satisfied.

Unlock better carrier rates. Contact us today.

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