Nobody Beats My Shipping Rates

“I have got the best UPS rates in Manhattan.”

“My FedEx rates are better than anyone in my industry.”

“Nobody can get better DHL international rates than I can.”

“The Vice President of FedEx came to our warehouse and said he couldn’t compete with the rates we are getting from UPS.”

“I saw General Motor’s rates and ours were better.”

“I hired a professional parcel negotiator and he couldn’t do any better. In fact, he asked me if I would negotiate rates for his customers.”

“My UPS rates are better than the Federal Government.”

The above statements are ones that I have heard. The people stating them honestly believe them. Do you?

I don’t.

Over the past 30+ years in this industry, I have made friends with many former FedEx and UPS sales people, pricing managers, and executives.

Here is a secret.

The carrier sales people are trained in negotiation strategies and one tactic is to get you to believe that you already have the best rates.

I found an interesting site where I learned about various negotiation tactics, one of them is called Flattery.

This tactic involves making you look good by telling you how clever and intelligent you are. For example, what a great negotiator you are. It makes you feel good about yourself and puts you in a position where you will want to be a friend with them.

I have heard those lines too.

“My UPS rep is my friend; I couldn’t possibly ask him for more.”

“My FedEx rep is the greatest and really went to bat for me.”

You may indeed be friends with your carrier representatives but are you really getting the best rates possible?

How do you know?

Are you 100% confident that you couldn’t do any better?

And, if you could, let’s say even reduce your shipping costs by 10%, what impact would that have on your organization?

Could you compete more effectively?

Increase profits?

UPS did last quarter; they tripled to their profits and reported a fourth-quarter net income of $757 million dollars.

How did you do in comparison?

How to Beat the High Cost of Parcel Shipping!

I have been working in the mailing and parcel industry since 1976—34 years! I am still surprised at what I see and hear. If you don’t know what you are doing, you can waste a ton of money. The worst part is that the carriers don’t make it easy for you, the small parcel shipper, to do it right. In fact, it almost seems like they confuse you on purpose. Let me give you an example, let’s say that you want to ship a package on Monday and get it to your customer by Wednesday. Which service would you use? Many would choose a service like UPS 2^nd Day Air or FedEx 2 Day service. Others might use US Post Office Priority Mail. What if you want to be sure that it gets there and choose the most economical service?

What is the best way to ship this package: UPS, FedEx, or US Post Office?

I went online to FedEx.com, USPS.com, and UPS.com and researched shipping a 5 pound package being shipped from Plymouth MI to a residence in Lawrence KS.

Here are the results of my analysis:

• The most expensive choice was UPS 2^nd Day Air for $27.91—guaranteed.
• FedEx 2Day would get my package there for $27.58—guaranteed. (almost the same)
• USPS Priority Mail was only $11.76. This would save me 57% but it is not guaranteed.
• But wait, if you look at the display below, you would see that FedEx Home Delivery would get it there in “2 Business Days.”
  
• Why do they have to make me figure out that 2 Business Days is Wednesday! Why do they make it so hard!
  
• I could pay $11.85 and it would be guaranteed. Looks like the best deal, but why pay retail if I could get a discount?
• I checked my discounted rates and saw that it was only $9.21, 22% less than retail. (email me and I will tell you how to get this discount)

Look at how much difference there is between rates. If I didn’t know what I was doing, I could have paid as much as $27.91!

I saved $18.70 on one package, or 67%.

Even Small Parcel Shippers Can Save 50% or More!

Wow! It sure does cost a lot to ship a small package. Even though I advise people on shipping packages, the truth is that I don’t personally ship that much, maybe a couple of packages a month. So, when I do ship something, like I did over the weekend, I experienced firsthand the surprise and frustration of small parcel shippers. Here is what I saw and learned when I shipped several items.

• My first observation was that the retail cost to ship an envelope across the country (from New York City to Beverly Hills, CA) was exactly the same for FedEx Priority Overnight and UPS Next Day Air. I knew that the prices for ground shipments were the same but I did not realize that it was also true for express shipments.
• Of course I was shocked that the price was $32.05! I can’t believe that anyone pays that much.
• Of course, I was glad that I only paid $14.11 with the discounted rate that I was able to obtain because of my industry knowledge. I saved 56%!
• I wondered how people that don’t know where to get a discount feel about paying so much to send an overnight letter. If you email me at mark.taylor@myshippingcoach.com, I will be happy to share with you how I received that rate.

My second package was 2.2 pounds that I was sending to my son in Texas.

• I went to USPS.com to get the rates. I was surprised that this small package was going to cost me $9.95 to send Priority Mail.
• I saw that I can save $.60 by shipping it online and get Delivery Confirmation for free, saving another $.70 for a total savings of 13%.
• I wished that it could fit into Priority Mail® Small Flat Rate Box for only $4.85 online.
• While it could have fit into the Priority Mail® Medium Flat Rate Box, that would have cost $10.20 online or $.85 more.
• I wondered if people sometimes made the mistake of thinking that the Flat Rate Boxes were always the cheapest way to ship something.
• I then went to FedEx.com to compare prices. The retail rate for FedEx Home Delivery was $11.50.
• But my discounted rate was only $8.57, 25% less than retail!
• I thought about all the people I see standing in line at Kinko’s to ship a package and pay more; I wondered how they compete with bigger companies if they were businesspeople.

The Dirty Secret to Getting the Best Shipping Rates

When it comes to getting a discount from UPS or FedEx for shipping parcels, there is a dirty secret that most companies don’t know. I learned this secret almost by accident. 

I founded TAYLOR Systems Engineering Corporation (TSE) from the living room of my home in 1989 after 13 years of working at Pitney Bowes. I was one of the launch managers for their first computerized shipping system and at TSE we became one of the fastest growing companies in the State of Michigan through integrating hundreds of shipping systems with our clients order entry and accounting systems. When we were in the process of implementing a system, we would program the client’s UPS or FedEx rates and discounts so that the client could reconcile their bills. It was then that I noticed a great disparity in the rates that our customers paid. We put systems in for companies as big as GM and in small to medium size distributors/manufacturers. While the carriers would have you believe that rates are based on a scientific formula that is not based on shipping volume, the difference in the discounts between significantly varying volumes amazed me. 

Here is the dirty secret stated perfectly by Chester Karrass,

“You don’t get what you deserve, you get what you negotiate.”

A few weeks ago, a colleague of mine and I met with a New York based company that had negotiated their UPS agreement three months earlier. The controller said, “I guarantee you won’t be able to save a penny on this contract.” We said that we may not but would be happy to look and see if he was getting the rates that he deserved. After a detailed examination and an in-depth analysis of his services, accessorial charges, and volume, we discovered some anomalies. We benchmarked his data and used that information to renegotiate his contract with UPS. The result was that we saved him $243,000 or 15% of his annual spend.

Are you getting the rates that you deserve? How do you know? We know. If you’re not sure, let me know and we will help you to find out.

Get 30% Discount on FedEx!

Last week, I announced that FedEx was offering discounts up to 16% for DHL shippers. A reader informed me today that there are discounts up to 30%!

Of course there are terms and conditions and it is only for a limited time. But still, it is a pretty good deal for smaller shippers.

I am not an agent or employee of FedEx nor am I endorsing them; my intention is simply to share information that could be valuable to you.

How to Get a Discount from UPS, FedEx, or DHL

I am here in Orlando at the National Conference on Operations & Fulfillment (NCOF). This event is focused on managing and directing vital areas of catalog, online, and multichannel operations: product fulfillment, distribution, the customer experience, the warehouse, the workforce, material handling.

Rob Martinez, Tim Sailor, and I presented a seminar entitled, Cost-Effective Shipping Strategies. Rob & Tim are partners at Navigo Consulting Group, a leading transportation consultancy representing large shippers in their carrier contract negations. Since 1995, Navigo has reduced its clients shipping costs by more than 30%. I asked Rob if he could provide some tips for eBay sellers and small business shippers. He shared on video several tips on how to get a discount with UPS, FedEx, or DHL.