Are you prepared for another UPS and FedEx rate increase?

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By Ken Wood, President, LJM Consultants

Effective January 2, 2012 UPS and FedEx will again increase their rates and fees. Do you know what this increase is going to cost your company? Likely between 6% and 12%!!! As the published rates from the two major carriers go up, at a rate of more than three times inflation, and the accessorial charges, such as Dimensional Weight, Address Corrections, Residential Deliveries, Delivery Area Surcharges etc. continue to increase, companies need to look for ways to reduce these out of control costs. One way that smart shippers are reducing shipping expenses is by renegotiating their carrier agreements. Companies who aggressively re-negotiate their carrier contracts, with the assistance of a professional 3rd party negotiation firm, are saving on average 49% more than companies who choose to negotiate themselves; and sometimes quite a bit more.

Most companies I speak to have little or no idea whether their FedEx and UPS agreements are truly competitive. Too often I hear clients tell me "I have the best rates in this area" (they are usually basing this on what they are being told by their trusted UPS/FedEx account representative) or "I don't want to negatively affect our relationship with our UPS/FedEx account rep because he takes care of us and does special favors for us", etc. A news alert, with the amount of money you are paying these carriers for their services, they should be taking real good care of you; and guess what; they are taking care of all of their clients; the ones that have great contracts as well as the ones that don't. The bottom line is this, Shippers typically have no point of reference to determine whether or not they have a competitive contract, other than by comparing their new contract to what they received during their last contract negotiations; and who says they had a good contract last go around?

LJM has helped hundreds of companies of all sizes negotiate favorable carrier contracts. LJM has the knowledge, the resources, the industry experience as well as the most sophisticated analytical software tool available to make certain that our clients (partners) are getting the best possible carrier agreement. We have seen it all and we have heard it all and we can share our vast knowledge with you. We work strictly on a contingency basis. Our only compensation is a percentage of the savings.

To engage our services in re-negotiating your carrier agreement, or to inquire about any of our parcel auditing or consulting services, please contact us by phone at (631) 844.9500 or by e-mail at kenwood@myLJM.com . Also, please visit us at www.myLJM.com.