Why are you a holding on to those stale, outdated shipping contracts?
You know that quarterly meeting where you’re tossing around ideas on ways to cut costs, and someone points out your shipping numbers and says “WHAT THE HECK IS THIS AND WHY IS IT SO HIGH”? Then everyone looks around for someone to answer the question, “What’s being done about this and who’s responsible”?
Sometimes, you have tried to re-negotiate contracts with your carriers, and after dozens of calls and meetings, it’s still completely unclear if you are in a better position at all.
Truth is, shipping costs are always going up, but the carriers are telling you “you’re fine, your rates are competitive and in line with what your company should be paying”. They tell you “we’ll take a look at it”, then come back with nothing. All that digging and digging, and the problem only gets bigger and bigger.
Look… My clients just want a fair deal.
Many of them have told me “I’ll just keep all of the savings by negotiating myself”. So, they keep 100% of the savings, as opposed to sharing it with a 3rd party.
What eats at them, and what they soon realize is, if they don’t have the data to compare with best in class contracts signed by similar companies in their industry, how do they know if they’re getting a fair deal?
The answer is… they don’t.
Without having the vast benchmark data that ICC can provide, knowing for sure the competitiveness of their contracts is impossible, and therefore their laborious efforts have little effect on their bottom line .
What does that look like on that next quarterly report?
Perhaps surprising to some, one more thing that prevents some of my clients from re-negotiating is that some are understandably content with their relationships with their carrier reps. They want to re-negotiate better rates but don’t want to “shake up” their comfortable relationship. They’ve held back for years in fear that any shake up would cause a riff between them, and in the end, will yield few results, if any.
Sometimes, they’ve tried to re-negotiate better rates but their rep tells them they’re getting the highest discounts already, so there’s no more room to negotiate, giving them a sense of security that they’re in good shape. But then they ask themselves, “Could I do better”?
On top of that, with all of the other cost saving tasks they already have in place, even if they did facilitate a re-negotiation, who has the time?
One client didn’t negotiate for 15 years. He thought he was ok. He was told he was ok. We persisted. And in the end, when we went in and demanded rates and discounts we knew he deserved, we saved them $3.1 million dollars over 3 years. Imagine that. He wasn’t ok after all.
Imagine the loss.
Begs the question… Why do we negotiate with our suppliers, but rarely our carriers?
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