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.


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