Negotiate Freight Contracts

Freight Contracts: If your business ships large amounts of products over a wide geographic area, you’ll need to rely on transportation that goes above and beyond parcel delivery. A contract with a freight carrier is a necessity if you plan to get products to your customers in a timely and cost-efficient manner. This is especially true for a small businesses that needs to build a customer base while expending as little capital as possible. In-depth knowledge of your company’s needs and the benefits of different carrier companies is required to negotiate the best freight contract for your business.[/box]

[box type=”shadow”]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.

3.) Ask questions during your meeting with the freight company to determine its high and low parameters. These questions include asking what the company’s best price is and what it includes at that price. Ask about the difference between shipping a full truck of product versus a smaller shipment. Inquire about handling fees if the driver helps unload the truck.

4.) Wait for the provider’s offer. Ask about specific services provided by the freight company. Ask the freight company how these services impact the price.

5.) Counter with your offer. Consider the services offered by the freight company and the price offered. Create a revised offer with a lower price. Drop any services that you don’t need.

6.) Repeat the offer and counteroffer process until you reach an agreement.

7.) Request the freight company to draft a contract and send it to your attention. Sign the contract. Make a copy. Send the original back to the freight company.