What is a rate or small parcel benchmarking in shipping contract negotiations? Have you ever wondered what your neighbor paid for his new car? Did he get a good deal? Say you liked that car and could walk into the dealership knowing the price and the negotiated finance rate. This information would undoubtedly give you an idea of what kind of price you are being offered. What would be even better is if you had that same information for about 20 other buyers. That would put you in the driver’s seat – in more ways than one.
Shipping Contract Negotiation
Apply this same principle to your FedEx and UPS rates and discounts. Each service you use, such as FedEx Ground or UPS 2nd Day Air, is discounted at a rate off the published rate. The published rate is the rate that anyone who opens a UPS or FedEx account can get without question.
Suppose you want to ship a 10 lb UPS 2nd Day Air package to your aunt in Boise. According to UPS, the zone for your location in Boise is Zone 205. Per the UPS daily rate chart, that package would cost $39.60. However, any shipper with volume knows this package will not cost them $39.60 as more volume will earn percentage points off this daily rate – perhaps a 25% discount.
Carrier Rate Benchmarking
But how do you know if a 25% discount rate is a good deal based on your shipping volume? UPS or FedEx do not publish a set scale showing that you will get a specific rate if you ship a certain amount. Maybe you could get a 35% discount? How do you know to ask for 35% and not 55%? This is where benchmarking comes in.
Businessdictionary.com defines benchmarking as “a measurement of the quality of an organization’s policies, products, programs, strategies, etc., and their comparison with standard measurements, or similar measurements of its peers,” and claims the main objectives of benchmarking are: “(1) to determine what and where improvements are called for, (2) to analyze how other organizations achieve their high-performance levels, and (3)to use this information to improve performance.”
Free Carrier Discount Benchmarking
Many 3rd Party Negotiators live and die by their shipping contract negotiation benchmarking. This secret sauce allows 3PNs to convince shippers to hand them over 20-50% of potential savings. STOP PAYING FOR THIS. Refund Retriever gives you this for free. That’s right, F-R-E-E! Refund Retriever will benchmark your data with shippers of similar size for each service you use. We do not share any of their confidential information with you – just a tick on a graph. You can see where your rates stack up with other shippers.
Take a look at the graph above. You are the red dot, and other similar-sized clients are the blue dots. Does it look like you are getting a good deal? Should you ask your account rep for a 5% better rate on your 2nd-day air or a 15% rate on your ground shipping? With Refund Retriever, you will have all this information at your fingertips 24-7.
This is not rocket science, and you should not be paying thousands for some outside service with more data than you; shipping contract negotiation takes time. Skip the middleman. Sign up with Refund Retriever, save instantly with our late package GSR refunds, and take advantage of our FREE small parcel benchmarking.
