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Why Shipping Data Is a Necessity at Contract Time

Feb 26, 2020 7:00:00 AM

Full knowledge of your shipping data is a sure way to gain leverage at the negotiating table. Here’s what the big carriers don’t want you to know, and where 71lbs can help.

Wouldn’t it be great if your business knew all the ins and outs of big carrier policy before negotiating your next shipping contract? Data is the best way to empower yourself and get the most cost-effective deal possible. Sadly, many businesses simply renew the contract, no questions asked.

These businesses either assume they’re already getting the best deal possible, or they don’t want the hassle of research, negotiations and maybe even switching carriers. That’s an expensive mistake. We recommend thinking twice. The reality is that a 17-page carrier agreement makes no sense if a company spends more than 80% of their spend on ground shipments, average zone 5 and 12 lbs. There is only one discount to focus on and the other 16 1/2 pages are fluff.

You may not have mastery over your shipping metrics, but we can assure you that a carrier will know your shipping data backward and forwards, and they’ll use that knowledge at your next contract meeting to ensure things go in their favor.

A data gap sets you up for carrier tricks

Picture this: A carrier and a customer are at the negotiating table. The carrier is offering savings and discounts on various areas of their service. The customer is impressed and signs on the line. The carrier, of course, is very happy — but they’re also relieved.

Why? They just offered those discounts and savings in service areas the customer doesn’t even use or will see very little benefit from. And since the customer’s own shipping data is a mystery to them, they’ll never know they’ve been exploited. A data gap can also cause an imbalanced negotiating attitude, meaning the customer forgets that they are the valuable ones.

Being able to show a carrier your shipping data reveals (among many other things) your business’s shipping volume. The higher it is, the more business you’re giving the carrier and the more money you’re making for them. This is a good time to negotiate rates. If your current carrier isn’t willing to compromise, there’s always another one happy to take your business.

Even if your business isn’t currently moving a particularly high volume of freight, you may have plans to scale up in the future. Hard data will corroborate ordering/shipping patterns and prove to your carrier that your business is growing. This may net you a discount in the present based purely on projected numbers.

A good deal goes both ways

Shipping data is also invaluable in making yourself an attractive customer for carriers. Yes, carriers do love an uninformed business they can take advantage of, but they don’t want one so disorganized that they become a liability. If your shipping department lacks data awareness, they’ll constantly be confused, making mistakes and causing conflict with carriers who eventually won’t come back to the negotiating table.

Another important tip to remember is that any time is contract time. You may have been renewing a carrier contract on a set date, but as the customer, you can call the agreement into question year-round. To have the advantage here, your shipping department needs real-time data that can be accessed any day of the week to deliver current and accurate information.

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Self-aware data with 71lbs

Your shipping department can become the smartest player at the negotiation table by leveraging the power of 71lbs Premium Analytics. Shipping exceptions, proof of delivery, inbound/outbound activity, specific cost centers, transfer costs and miscellaneous fees — all these metrics and more go under the microscope to inform our customers about every part of their shipping spend.

Our dashboard maps allow our customers to know immediately the top three states they ship to and from, along with average weights and the average cost per shipment to those states. Our team can also audit your shipping operations to make sure you’re paying only what you should now and after a new contract agreement.

Our track record of successful contract negotiations average about 20% in shipping savings for our customers. We’re diplomatic enough to maintain your carrier relationship, but at the same time, we don’t compromise on getting you the best possible deal.

Every penny you save can be redirected into growing your operations, which in turn makes you a bigger and more valuable business with a stronger negotiating position. Connect with us at the link below for more information on our data and contract services.

At 71lbs, we focus on two things: a) helping customers save money on shipping, and b) helping customers understand their shipping costs. We provide refunds and savings on shipping insurance, freight and imports, among other benefits. Our automated dashboard displays easy-to-understand shipping costs and insights so you can make better business decisions. Drop by the contact page to get in touch!

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Topics: shipping data, shipping contracts, transportation data, carrier contract negotiations

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