How to negotiate rates with FedEx?

Taming the Shipping Beast: How to Negotiate Rates with FedEx

Shipping costs can be a significant drain on any business, especially for those heavily reliant on carriers like FedEx. But accepting the listed rates as gospel is a mistake. Negotiating with FedEx is possible, and with the right approach, you can secure significantly better terms and tame the shipping beast that eats into your profits. Effective negotiation, however, hinges on thorough preparation and a clear understanding of your leverage.

Know Your Shipping History Inside and Out:

Before you even think about picking up the phone, delve deep into your shipping data. Compile a comprehensive overview of your shipping history with FedEx over the past year, or even longer. This data is your ammunition. Focus on these key elements:

• Volume: What’s your total number of shipments? The higher your volume, the more bargaining power you wield. Even if you’re a smaller business, consistent, predictable volume can be a strong negotiating point.
• Size and Weight: Analyze the typical size and weight of your packages. Are you shipping predominantly small, lightweight items or larger, heavier ones? This information helps FedEx understand your shipping profile and tailor potential discounts.
• Destination Breakdown: Where are your packages primarily going? Understanding your shipping lanes – domestic, international, or a mix – is crucial as rates vary significantly based on destination.
• Current Costs: Calculate your average cost per shipment and your total annual spend with FedEx. This provides a clear baseline for negotiations and allows you to quantify potential savings.

Highlighting Growth Potential and Leveraging Competition:

Presenting yourself as a growing business adds significant weight to your negotiation. If you can demonstrate projected growth in shipping volume, you become a more attractive customer. Back up your projections with concrete data, such as expanding product lines, new market penetration, or increasing sales figures.

Don’t be afraid to leverage the competition. Obtain quotes from other carriers like UPS and DHL. Presenting these competitor offers to FedEx demonstrates that you’re exploring all options and strengthens your bargaining position. However, avoid using this tactic as a bluff. Be genuinely prepared to switch carriers if FedEx doesn’t offer competitive terms.

Presenting a Compelling Case:

Once armed with this information, you’re ready to contact your FedEx account representative. Clearly and concisely present your shipping history, emphasizing your volume, growth potential, and competitor offers. Focus on building a collaborative relationship rather than an adversarial one. Frame the conversation as a mutually beneficial opportunity: you’re offering them increased business in exchange for more favorable rates.

Beyond the Baseline: Exploring Additional Savings:

Negotiating isn’t just about the base rate. Explore other potential cost-saving areas:

• Fuel surcharges: Negotiate a cap or discount on these fluctuating fees.
• Residential delivery charges: If you ship frequently to residential addresses, seek a reduction in these premiums.
• Value-added services: Negotiate discounts on services like Saturday delivery or signature confirmation.

Persistence Pays Off:

Don’t expect to secure significant discounts overnight. Negotiation is a process, and persistence is key. Be prepared to go back and forth with your FedEx representative. Even small concessions can add up to substantial savings over time. Regularly review your agreement and renegotiate as your business evolves and your shipping needs change. By taking a proactive and informed approach, you can successfully negotiate with FedEx and control your shipping costs, freeing up valuable resources for your business growth.