Although your incumbent carrier (UPS or FedEx) is performing a great service and you have a great relationship with the sales representative, I want to clear up the widespread confusion that exists with shippers; a great relationship with your carrier's sales representative doesn't mean you have to overpay for their service. It's business, NOT personal!

I find many executives are actually afraid to discuss formal bidding processes, transportation optimization, and validation (tactics deployed by companies that pay far less for transportation) with their incumbent carrier, for fear of repercussion. If you are paying more for the same service with UPS or FedEx than the company across the street, don't you have an obligation to find out why and then work on lowering your costs to be in line with theirs? Yes, you do. Continuing to pay more for transportation every year while your company's revenue/profits have stagnated is a recipe for disaster. It's imperative to continually seek out new methods of lowering costs to help your company remain competitive.

UPS just reported another impressive quarter with revenue topping 13 billion and profits soaring (as usual). Looking at their mounting revenue and profits, you'd never know most companies are struggling to break even or squeak out a small increase. There are several reasons for the continued upsurge in the carrier revenues and profits; the brilliant marketing strategies deployed by the Dynamic Duopoly (UPS & FedEx), the lack of (or perceived lack of) competition and a lack of in-depth industry knowledge on their customer's part. Get educated and beware: in just a few months, your shipping rates are going to go up again, about eight percent or more. Are you prepared? Take steps now to help your company's profits soar.

Here are three required steps: Negotiate, Optimize, Validate

Negotiate: You will need to start by making sure you have competitive contract rates, in line with other companies that fit your shipping profile. Getting a couple of additional percentage points over last year's discounts won't help you achieve your goals of reducing costs going forward. If the carriers increase their rates by eight percent and you negotiate a two percent additional discount, you still have a net increase of six percent. By UPS and FedEx forbidding their customers from seeking professional contract negotiation assistance, this should send every shipper in the US a loud and clear message: Get professional contract negotiation assistance, immediately!

Optimize/Validate: After you've negotiated your best deal, you must Optimize and Validate to realize significant savings. Note: It's beneficial to get one company to provide both services. That means squeezing every dollar possible out of those great rates, then being absolutely certain you are getting invoiced correctly from UPS/FedEx. That means paying the precise amount that you expect, so you can charge your customers back correctly and properly manage your business. If you aren't being invoiced what you expect, you'll get errors corrected and money refunded when you use this service. Optimization requires an investment in transportation management technology, whereas validation is generally provided as a service. There are plenty of occasions where your current technology may be letting you down. These issues below can end up costing your company 10-15% or more on your overall transportation spend. Here are five common areas:

1 - Shipping with incorrect addresses
2 - Inability to consolidate shipments to the same customer
3 -Using more expensive services
4 - Incorrectly charging back your customers
5 - Single carrier software, usually provided free

After you've negotiated - pick from among these great companies to help you Optimize to save the most money and Validate you're being invoiced properly:

In the words of Hyman Roth - it's business, not personal! I hope this helps your company Ship Better and Save Money.