Parcel - October 2008 - (Page 29)

Of course negotiation for negotiation’s sake will most likely yield you some level of improved result; however, coming to the negotiation table well-informed and in a spirit of collaboration will provide you with the best return for your effort. Preparation is where the real money is saved in a negotiation. With the advent of shipping systems that capture package level detail and transmit it to UPS and FedEx, the carriers are able to more closely analyze all of the business that travels through their networks. What they can capture they can, and do, analyze in great detail. This analysis enables them to determine the cost to provide their services as a whole, but also determine costs down to the customer level by weight, zone, service and surcharge. They price these elements according to their cost and pass these charges on to the shippers. The best way to level the playing ﬁeld in your negotiation is to have a strong internal understanding of what your own business looks like and be able to articulate a number of important ideas to the carrier representative. First, understand what your company is looking to gain from the negotiation. This may sound easy, but by asking the different departments within your company what they need (such as service, IT support, customer service, etc.) that picture may become more complicated. But it is important that those needs are conveyed to the carriers. Second, you’ll also want to share information regarding any growth, acquisition or interest in a previously unutilized service the carrier offers. This will provide them with an oppor- tunity to increase their business, increase your discounts and not simply dilute their existing revenue. Finally, it is important to discuss leverage in more detail. In addition to understanding market conditions and what effect they have on what pricing the carriers offer, it is equally as important to understand what your business looks like to the carriers. Emphasize what elements are positive from the carriers’ perspectives in order to utilize that information to your greatest beneﬁt. The sales person you are talking with must “sell” internally to get the pricing warranted by your package metrics. The more aggressive the pricing, the more internal selling must be done. By sharing with the carrier representative your company’s attractive package attributes, the more likely they are to be victorious on your behalf. Yes, the United States is experiencing trying economic times. However, by using this time as a strategic negotiating period, you can assist your company in shouldering the increases in fuel and decreasing costs in order to weather any contraction in business. In addition to these beneﬁts, the results from a renegotiation will assist your ﬁrm in maintaining or gaining a competitive edge. So even if you’ve negotiated a great deal, it might be the very best time to revisit, research and reap the rewards of a renegotiation. Melissa Priest is Managing Director at AFMS. During Melissa’s tenure as a National Account Executive with FedEx, her strategic negotiating skills resulted in over $200 million in new business for the company. Contact her at melissa.priest@afms.com or 714-961-1160. www.PARCELindustry.com October 2008 29 http://www.dmgincorporated.com http://www.dmgincorporated.com http://www.PARCELindustry.com

Table of Contents Feed for the Digital Edition of Parcel - October 2008

Parcel - October 2008 Contents Editor's Note What Would Augello Say? Best Practices Survey Results Going with the Flow Is Your Parcel Network Optimized? Last (Mile), but Not Least Moving From Manual to Automated Fulfillment A Race for Excellence Making Ends Meet Is Your Job Killing You? Software Selection Demystified Controlling Costs On the Mark Product Profile New Products & Services Advertiser Index Wrap Up

Parcel - October 2008

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