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?

UPS 2010 Rate Increase—In-Depth Analysis, Great Links, and How to Get a 31% UPS Discount

Attention UPS Shippers: the rates will be increasing on January 4, 2010. Most of you probably know this by now, but what you may not realize is how the rates will impact your budgets for 2010. My friend and colleague, Doug Kahl, wrote a useful analysis for PARCEL magazine which I would encourage you to read, called, UPS 2010 Rates: An In-depth Look.

In a nutshell, UPS Ground UPS Ground service will increase 4.9%. Doug provides an in-depth initial analysis of the 2010 Ground Rates UPS List Rate Increase that you can download. You will see that the lower weights and zones, less than five pounds, go up a little over 6%.

UPS Air and International Services will increase 6.9% in the base rate and will reduce the Air and International Services fuel surcharge by 2%. Doug also provides an analysis of the express services that you can download.

If you would like to see how UPS will compute the fuel surcharge next year, you can download the PDF, Fuel Surcharge Calculation Changes. You can download Doug’s analysis of fuel surcharges here.

Some of the highest increases occur with the 2010 Surcharges. You can download an excel spreadsheet.

The 2010 UPS Rate and Service Guide for Daily Rates is available here for download. You can also see the Retail Rates here.

The difference between retail and daily rates is significant. Retail is $7.05 for a zone 2 one-pound package compared to $4.84 for Daily Rates. You pay 31% more for retail! Nobody that ships regularly should pay for retail. Retail rates are for what is known in the industry as “gift shippers” or consumers. (see my blog on Consumer Parcel Shippers Pay More for Shipping). These are people that only ship once or twice a year and don’t have an account with a carrier.

Here is how to get up to a 31% Discount on UPS:

Discounts are available for shippers; in fact, eBay shippers can get an account with UPS and qualify for the lower daily rates and save 31%. You can find out more about the eBay discount here. So even if you ship a few packages a month, you could save a lot of money on shipping!

 

 

 

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.

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.