NEGOTIATING PRICING IN AN ENVIRONMENT OF RATE INCREASES:
3 BEST PRACTICES TO MAKE YOUR MARK
BY ADI KARAMCHETI
n the current parcel market, demand heavily outweighs supply. The carriers are leveraging their temporary advantages as much as possible. So, is there really nothing to do but wait until things come back into balance? Thankfully, no. It’s still a competitive market with plenty of alternatives you can leverage. The carrier you’re not using today can be your best friend in your next contract negotiation. But regardless of whether you want to switch, here are three proactive steps you can take to optimize your chance of success, even in the current seller’s market. Everyone likes working with people or companies that make their jobs easier. There’s a lot you can do to make your drivers and sales reps happy and create incentives for them to ensure your operational and pricing needs are met. My colleague, Paul Yaussy, recently published an article called “The Key to Success for the Carrier/Shipper Relationship,” in the July/August edition of PARCEL. Some of his underutilized practices for drivers might seem like small gestures, but they go a long way.
Come negotiation time, having allies in the carrier operations department is surprisingly helpful. Proactive steps like ensuring packages are ready when your driver arrives, making it easy for your driver to access your pickup area and keeping it clean of debris, being flexible with your pickup window, and helping them keep their tight schedules and stay healthy by providing water on hot days all go a long way in establishing goodwill. Carrier sales reps also have challenges you can simplify. Carriers have laid off salespeople, placing increased demands on remaining reps. As we come out of COVID, reps will likely add more travel time to an already historically busy workday. Like the drivers, reps have goals to meet. In addition to volume and revenue targets, they’re often measured on other, more nuanced administrative goals like completing a number of client visits per day (sometimes accompanied by their manager), delivering a certain number of business reviews each month, and pitching certain products. Making yourself available to help them hit these goals will build goodwill with your rep, provide you with valuable insights into your own shipping profile, and potentially expose additional ways to collaborate. And making anyone look good in front of their boss is something they will definitely remember come negotiation time.
22 PARCELindustry.com SEPTEMBER-OCTOBER 2021
Your shipping profile: Understand it and communicate it to strengthen your negotiating position. You rely on your carrier reps for insight into the complex carrier pricing structures and increasing number of rate changes each year, but their heads might be spinning just as quickly as yours. They’re often granted limited insight into the reasoning behind pricing decisions, even for their own accounts, and rarely have access to the same data used by other departments. Similarly, their internal partners are relying on those same reps to offer insight into the needs of your account. Help them simplify at least half this process by proactively communicating what you have to offer and what you need. The better you are at telling your own parcel story, the easier it will be for your sales rep to communicate those details to their pricing department. Provide packages per day, average weights, dimensions, service levels, commercial/residential, designation, etc. Put your story on paper. This becomes a business case your rep can hand to their pricing department. The more of YOUR story they can tell, the greater the impact you can have on your negotiation. In the absence of information, pricing departments must assume the worst to
PARCEL September/October 2021