Are you aware that both FedEx and UPS recently implemented annual rate increases and will likely implement at least one or two additional rate hikes within the next six months?
If you’re planning to fight back against these higher rates through negotiation, you’re on the right track—but you’ll need much more than confidence to achieve significantly improved rates. In the end, successful negotiations with major carriers like FedEx and UPS come down to knowledge, business intelligence, and accurate benchmarking—and MCG’s expert team can help you get there before your rates go up again.
How Prepared Are You?
The question of how prepared your business is to negotiate with FedEx and UPS—among other carriers—isn’t simply rhetorical. Rate increases occur throughout the year, and without the knowledge of how to mitigate these increases and the right negotiation tactics, the result could have a severely negative impact on your business’s bottom line.
For example, FedEx will more than likely impose peak season rate increases in September — this is in addition to general rate increases (GRIs) of roughly 5% that occur in January. Without a plan to mitigate or eliminate these inevitable rate hikes via contract negotiation, the resulting double whammy will make a major dent in many American companies’ business plans.
Confidence Won’t Cut It
FedEx and UPS both have business models that depend heavily on continually raising rates in their pricing agreements to maximize their profit margins. The reality is, as many CFOs know, that not all businesses will pay the same rates or end up hampered by the same increases during annual and peak season rate hikes.
You may believe, as many business leaders do, that you’ve been able to avoid these common financial drains in previous years through confident negotiation with the carriers. The problem? These major carriers rely on an opaque pricing system that makes it nearly impossible to discern whether you’re paying a fair price. On top of that, there are hidden areas of cost baked into nearly every pricing agreement. It’s in every carrier’s best interest to negotiate a deal that maximizes their margins and profitability—and being a skilled negotiator, while useful, won’t be enough to combat their strategies.
Knowledge Is Power
You have the power to mitigate—even eliminate—price hikes, ultimately agreeing on carrier rates that are much more amenable to your business’s bottom line. All you need is the right business intelligence to combat the opacity coming from FedEx, UPS, and other freight carriers and couriers —and MCG’s knowledge, best-in-class logistics tools, and strategies can help you arrive there quickly and easily.
It begins with our unique database, containing millions of comparable transactions, allowing for significantly increased transparency—and empowering your negotiators to arrive at a fair and reasonable pricing agreement.
We’ll put together a scorecard that determines market fit and eliminate inefficiencies that hamper your budget over the long term. We also provide robust business intelligence tools to help you monitor and improve the KPIs that truly make a difference when it comes to cutting costs and boosting profitability.
FedEx and UPS won’t wait to raise their rates over the next few months—which means there’s no reason to put off improving your knowledge and business intelligence to support more effective pricing negotiations.
Give MCG a call – we’ll put you in a position of strength at the negotiating table – try us out – see why so many companies rely on us to maximize cost reductions and profitability in this critical expense area of their businesses – take advantage of our complimentary market savings analysis to determine where there are hidden areas of savings within your contracts and pricing—
Contact me today – [email protected] – 949-525-7677