Would you visit a car dealer and tell the salesperson you have no intention of evaluating the competition, money is no object, you've done no research, you'll trust his/her opinion and you absolutely have to leave that same day with a shiny brand new car? Of course you wouldn't. So why do shippers treat UPS and FedEx the same way and expect to see lower shipping costs?
Business is good for UPS/FedEx who, right now, are both pondering next years increase they will inflict on their loyal customers with the implementation of yet another GRI - General Rate Increase. The conversations in the boardroom probably sound something like this: "Hmmmm hey Charlie, should we hit them with 4.9, 5.9 or a 6.9% increase in January? Hey I know, we'll make it 8.9% and just advertise it as 6.9%, there are many inconspicuous ways we can spin that and our bonuses will be huge. But wait a minute if there's no recourse, why don't we just go for the largest increase percentage ever? Let's hit them with 10.9% and then offer them ways to lower their costs as a way to appease. We need not worry about the deteriorating US economy and our customers who are desperately trying to stay afloat and need to cut expenses. We can easily get away with it, there's no competition and Wall Street will love us."
Folks, If you're holding stock or working for the "Dynamic Duo", congratulations, because your income will probably increase next year, but for many of their shipping customers the situation will be quite different.
So what should you do if you want to take action? First, continue to utilize traditional methods, i.e. negotiations, policy enforcement etc. Next, don't let the personal relationship with your carrier rep prevent you from taking aggressive cost-cutting actions and then make sure you have all the leverage you need to win the best deal. How do you do that? Invest now in a multi-carrier shipping solution.
Foregoing "free" carrier provided technology and implementing your own multi-carrier shipping solution-one that processes shipments for ALL carriers-places you in an elite group of intelligent business owners and managers and will help you truly drive down costs. Shippers that have their own multi-carrier shipping software, instead of using "free" carrier provided technology have the single most important leverage tool in the industry and will save 15 - 30% over those that do not.
Logistics and transportation managers enjoy the coddling they receive from seasoned carrier representatives that UPS and FedEx hire to make promises and bear gifts. These carriers spend millions developing single-carrier shipping solutions to lock in your business to only one company and these tactics have worked and continue to work brilliantly. Remember this; once you accept this "free" shipping software you are accepting higher rates and missing out on potential savings. The trade-off for providing free shipping software is enormously in UPS/FedEx's favor. Why else would it be free? What is their incentive to give their customers the best rates when they are already using their proprietary technology with higher rates embedded right into the software?
A Multi-Carrier shipping solution is not for the "cheap at heart". It takes courage and will require an initial investment, like gold. Similarly, when you make an investment you expect to receive dividends or returns. Take the leap, and if you invest now you can expect these crucial savings:
· 10 - 15 % savings from negotiated lower rates
· 10 - 15 % savings from multi-carrier optimization
Bottom line - Total Savings = 20 - 30%!
There are countless UPS/FedEx customers locked in to using "free" carrier provided technology. It disturbs me to see so many small businesses put themselves in such a vulnerable position, especially at a time when saving money is so critical. The main reason this situation exists is simple; people are obsessed with receiving things that are "free" and usually don't realize that alternatives exist. There's still this flawed belief system in the business world that it's possible to get something for nothing.
Consider these two scenarios and decide if your "free" system is not costing your company:
Scenario #1 - Company A ships with UPS Worldship integrated to their SAP system. Their IT department worked long and hard with UPS's integration experts (provided at no charge, of course) to set the system up in their warehouses and integrate the consignee data. Since FedEx was the incumbent carrier, UPS provided great teaser rates to buy the business providing the manager that year with a big bonus. A couple of years have passed and now its time to renegotiate the rates. UPS systems are now solidly integrated and deployed throughout Company A's operations. It would take months and a huge effort to remove the UPS provided technology and switch to FedEx Ship Manager and no one wants to change.
2 - Company B invested in a multi-carrier shipping solution and integrated it into their SAP system with no help from any carrier. The multi-carrier system contains all the rates and compliance for regional, LTL, TL carriers, the USPS and others - all contained in one system. Company B can visually compare rates, find the least costly method of shipping and then pick from any carrier they want, any time they want with NO restrictions. Each year they receive bids from each carrier when the contract is up.
Which company do you think will get the best deal and save the most money?
Like I said earlier - to accept a free, carrier-provided shipping solution is the same as visiting a car dealership and telling the salesman you have no intention of evaluating the competition, money is no object, you've done no research and you absolutely have to leave that same day with a shiny brand new car.
Take that cost cutting, business-savvy entrepreneurial spirit you used when you purchased your car and use it to optimize your transportation spend and start saving today. Contact your logistics professional now and get a multi-carrier shipping solution.
I hope this helps you Ship Better and Save Money!
By Jim LeRose
Jim LeRose - known in the industry as "TheFreightSpendAssassin" is Principal of Agile NYC Metro and President of Advantaship.com and has been a transportation industry consultant for over 25 years. His clients have saved millions on transportation costs. Agile has helped companies such as JP Morgan, Audiovox, Intuitive Surgical, Panasonic Electric, Petco and over 1,000 others. Advantaship helps small businesses get the same discounts on shipping as the big guys. Jim welcomes your comments and can be reached at jim.lerose@agile-network.com or @888.214.1763
Business is good for UPS/FedEx who, right now, are both pondering next years increase they will inflict on their loyal customers with the implementation of yet another GRI - General Rate Increase. The conversations in the boardroom probably sound something like this: "Hmmmm hey Charlie, should we hit them with 4.9, 5.9 or a 6.9% increase in January? Hey I know, we'll make it 8.9% and just advertise it as 6.9%, there are many inconspicuous ways we can spin that and our bonuses will be huge. But wait a minute if there's no recourse, why don't we just go for the largest increase percentage ever? Let's hit them with 10.9% and then offer them ways to lower their costs as a way to appease. We need not worry about the deteriorating US economy and our customers who are desperately trying to stay afloat and need to cut expenses. We can easily get away with it, there's no competition and Wall Street will love us."
Folks, If you're holding stock or working for the "Dynamic Duo", congratulations, because your income will probably increase next year, but for many of their shipping customers the situation will be quite different.
So what should you do if you want to take action? First, continue to utilize traditional methods, i.e. negotiations, policy enforcement etc. Next, don't let the personal relationship with your carrier rep prevent you from taking aggressive cost-cutting actions and then make sure you have all the leverage you need to win the best deal. How do you do that? Invest now in a multi-carrier shipping solution.
Foregoing "free" carrier provided technology and implementing your own multi-carrier shipping solution-one that processes shipments for ALL carriers-places you in an elite group of intelligent business owners and managers and will help you truly drive down costs. Shippers that have their own multi-carrier shipping software, instead of using "free" carrier provided technology have the single most important leverage tool in the industry and will save 15 - 30% over those that do not.
Logistics and transportation managers enjoy the coddling they receive from seasoned carrier representatives that UPS and FedEx hire to make promises and bear gifts. These carriers spend millions developing single-carrier shipping solutions to lock in your business to only one company and these tactics have worked and continue to work brilliantly. Remember this; once you accept this "free" shipping software you are accepting higher rates and missing out on potential savings. The trade-off for providing free shipping software is enormously in UPS/FedEx's favor. Why else would it be free? What is their incentive to give their customers the best rates when they are already using their proprietary technology with higher rates embedded right into the software?
A Multi-Carrier shipping solution is not for the "cheap at heart". It takes courage and will require an initial investment, like gold. Similarly, when you make an investment you expect to receive dividends or returns. Take the leap, and if you invest now you can expect these crucial savings:
· 10 - 15 % savings from negotiated lower rates
· 10 - 15 % savings from multi-carrier optimization
Bottom line - Total Savings = 20 - 30%!
There are countless UPS/FedEx customers locked in to using "free" carrier provided technology. It disturbs me to see so many small businesses put themselves in such a vulnerable position, especially at a time when saving money is so critical. The main reason this situation exists is simple; people are obsessed with receiving things that are "free" and usually don't realize that alternatives exist. There's still this flawed belief system in the business world that it's possible to get something for nothing.
Consider these two scenarios and decide if your "free" system is not costing your company:
Scenario #1 - Company A ships with UPS Worldship integrated to their SAP system. Their IT department worked long and hard with UPS's integration experts (provided at no charge, of course) to set the system up in their warehouses and integrate the consignee data. Since FedEx was the incumbent carrier, UPS provided great teaser rates to buy the business providing the manager that year with a big bonus. A couple of years have passed and now its time to renegotiate the rates. UPS systems are now solidly integrated and deployed throughout Company A's operations. It would take months and a huge effort to remove the UPS provided technology and switch to FedEx Ship Manager and no one wants to change.
2 - Company B invested in a multi-carrier shipping solution and integrated it into their SAP system with no help from any carrier. The multi-carrier system contains all the rates and compliance for regional, LTL, TL carriers, the USPS and others - all contained in one system. Company B can visually compare rates, find the least costly method of shipping and then pick from any carrier they want, any time they want with NO restrictions. Each year they receive bids from each carrier when the contract is up.
Which company do you think will get the best deal and save the most money?
Like I said earlier - to accept a free, carrier-provided shipping solution is the same as visiting a car dealership and telling the salesman you have no intention of evaluating the competition, money is no object, you've done no research and you absolutely have to leave that same day with a shiny brand new car.
Take that cost cutting, business-savvy entrepreneurial spirit you used when you purchased your car and use it to optimize your transportation spend and start saving today. Contact your logistics professional now and get a multi-carrier shipping solution.
I hope this helps you Ship Better and Save Money!
By Jim LeRose
Jim LeRose - known in the industry as "TheFreightSpendAssassin" is Principal of Agile NYC Metro and President of Advantaship.com and has been a transportation industry consultant for over 25 years. His clients have saved millions on transportation costs. Agile has helped companies such as JP Morgan, Audiovox, Intuitive Surgical, Panasonic Electric, Petco and over 1,000 others. Advantaship helps small businesses get the same discounts on shipping as the big guys. Jim welcomes your comments and can be reached at jim.lerose@agile-network.com or @888.214.1763
