Your business has improved, and your needs have changed. However, have your logistics contracts advanced too? Odds are, they haven’t. The rates and terms you haggled in the past may not matter to your business’ current needs.
If your business has grown and you believe you deserve better deals, you have to renegotiate your terms with your logistics provider. Doing so will allow you to maximize your profit and potentially boost your growth even further.
How do you renegotiate with your logistics provider properly? Read below:
Prepare the Right Way
Present your shipping volume and frequency in detail. Doing so demonstrates your impact on the logistics provider as a client and will translate your business into real money, making it easier for them to see your value.
Present your surcharges and other fees, then explain them in the context of your operations and why you want them reduced or removed. These are areas to negotiate as they are usually flexible for the logistics provider. If you can show how reducing them will improve your business, your provider might reconsider as it will also mean more freight for them to move.
Present your business’ growth outside the logistics scope. Providing this information to your logistics partner gives them an incentive to appease you. Again, showing growth will encourage them to work with you long term as they see you as an opportunity. No logistics company would like to lose a client with a growing business as they are likely to mirror such progress.
Proper presentation of your business and putting your business as a valuable revenue source for your logistics partner is the key to renegotiate your terms successfully. Always try to demonstrate your value through figures and explain why your growth is extremely beneficial for your logistics partner.
Do Not Renegotiate to Force a Result
Rate negotiations should never boil down to intimidations. “Lower my freight rate, or I will find another partner” is not an approach you want to take. Even if it does work and your logistics company will reduce its rates for you, it won’t take long before tension rises and end up in disagreement or performance deterioration. Always follow the principle of balance in negotiations and aim for a conclusion that will benefit both parties.