How Freight Contracts were negotiated

Freight Contracts: Freight companies provide transportation internationally, domestically and within the same city. They ship everything from tangible products to liquid food items to hazardous chemicals. Businesses rely on freight companies to transport inventory from suppliers and to ship finished products to customers. In both cases, the company signs a contract with the freight company to provide this service. Companies who successfully manage their freight costs learn how to negotiate freight contracts with these businesses.


1. Research current rates. Determine your freight needs. List your standard routes, frequency of shipments, the size of a typical shipment and any special requirements, such as temperature control. Email competing freight companies asking for price quotes to meet your freight needs. Review the quotes and identify the highest and lowest prices in the market.

2. Set your own parameters. Before meeting with the freight company, determine what your limits are. Find out how much your company budgeted for freight costs. This represents your starting negotiation point. Determine the maximum amount your company can afford for freight charges. This represents the ceiling parameter for your negotiation.