For businesses seeking to guard against unforeseen freight market shifts and liabilities, continual freight contract reviews are an essential component of routine shipping operations. By regularly reviewing existing agreements, shippers can better understand their current obligations, improve adaptability, and ensure they are getting the most out of negotiated carrier contracts, including competitive rates and terms on everything from delivery times to shipping zones and equipment availability.
Effective and continual contract reviews with an eye to cost savings, risk management, and compliance demand shippers adopt efficient and flexible approaches and tools. Transportation management systems (TMSs) offer just that. In one unified digital dashboard, businesses can store, locate, share, manage, and review their freight agreements with speed and ease.
Review important contract dates and deadlines
Continuous freight contract reviews give shippers the opportunity to refresh themselves on their contracts’ renewal, renegotiation, and opt-out dates and windows. That way, shippers have more time to identify unfavorable terms and clauses and prepare for renegotiations before contract renewals. If, in doing so, a shipper instead decides to terminate that agreement, they may be able to avoid financial and legal repercussions by notifying relevant parties in a timely manner.
Clarify ambiguous terms and clauses
Reviewing contracts helps shippers clear up any terms and clauses they or other parties find ambiguous—or even ones that favor opposing parties’ interests. In doing so, shippers can avoid renegotiation conflicts and more confidently make future business decisions. They can also identify and correct any ongoing operational errors and prevent past mistakes from recurring—all to secure savings and peace of mind.
Mitigate legal and financial risks due to unforeseen circumstances
In March 2021, when the Ever Given container ship became lodged in the Suez Canal, organizations shipping via that vessel and the over 400 others it blocked risked numerous legal and financial complications, in part from being unable to fulfill contracted shipments through no fault of their own.
Suffice to say, the global freight landscape is prone to unpredictability. Whether geopolitical events, changes to tax laws or international shipping regulations, or operational ripples from the global 24/7 supply chain pivot, these rapid and often abrupt developments can, at best, catch shippers off guard or, at worst, massively disrupt operations.
TMS platforms make it fast and easy for shippers to locate and review freight contracts and terms that serve as lines of defense against unanticipated shipping impacts, including:
- Delivery delays
- Loss and damage claims and management
- Compliance risks from new and revised laws and regulations
Revise contracts to accommodate business shifts
Shippers and carriers agree on a contract based on the knowledge available at the time and the then-current freight shipping environment. But as time passes, earlier decisions may no longer reflect either party’s business interests or the current market, and businesses may want to make a change.
For example, if a shipper agrees on a contract’s freight size terms based on the size and space needs of a specific good but later stops shipping that good, they can use a platform like CTSI-Global’s Honeybee TMS to shed light on important negotiations insights as they accommodate only the freight they’ll ship going forward. With this strategic pivot, they save money and improve sustainability by reducing space and packing materials needs.
Regular freight contract reviews empower shippers to maximize every agreement
Securing the most competitive freight contract rates and terms demands the right partnerships and contract review technology—not just on day one, but throughout the entire agreement lifecycle.
CTSI-Global’s logistics management experts have experience managing contract negotiations for leading carriers, affording us unique insights into the latest negotiation strategies. Acting as a single source of truth, our Honeybee TMS platform offers a document center that can collate contracts from across disparate enterprise systems and transportation service providers and increase transparency into need-to-know terms. Backed by our expertise and best-in-class logistics platform, shippers can more efficiently locate, review, and renegotiate their contracts as new needs arise.
Mitigate contract inefficiencies and liabilities to pave the way for growth. Contact CTSI-Global to tackle contract review challenges with a robust transportation management system and trusted partner.
