If you’ve ever used a travel pricing website to plan your vacation, used a realtor to buy a house or called 1-800-GOFEDEX, then you know the routine. Priceline.com, Century 21, Convergys – none are specifically contracted to you, but all are in place to facilitate what one party or the other is trying to accomplish.
And when what you’re trying to accomplish is small parcel savings for your company, let’s face it, most companies don’t have the time nor the resources to dissect immensely complex parcel agreements and obtain information pertaining to the rates that are available in today’s market.
But in the unique industry of small parcel transportation, where few competitors exist, discussions involving processes and cost reduction must be looked at on a completely different level.
With UPS and FedEx being the only true current primary players surrounding this industry, the competitive advantage weighs heavily on their side. How many other companies, within any market, can implement annual rate increases that have such enormous negative impacts on the vast majority of their customers? In a business sense, the concept is great – two “suppliers” with eerily similar pricing structures and services bidding on one company’s shipping revenue. Too bad that concept isn’t great for your business.
Anyone can pick up the phone and call his or her respective carrier account manager and ask for better pricing, the same way any of us can call each of the dozens of airlines and compare rates. Even when the pool of competitors is two, you generally can receive a token discount. You might even hear how important your account is and how difficult it was for that account manager to even secure those additional savings. But the bottom line is that you can never know for sure whether the incentives you’ve negotiated are as good as they could have been.
This is the basis of the true need for utilization of a 3PN. Here are three reasons why any client will benefit from involving an outside party:
Knowledge
Like many aspects of modern business, transportation is ever-changing. Staying on top of service changes, rate increases, surcharge modifications and adjustments, as well as operational changes and/or improvements that carriers routinely make is a full-time job.
The expert attention to detail that a reputable 3PN can provide to the client will ultimately be the driving factor to securing the overall cost savings at the end of the process. Every possible element of a client’s shipping process must be reviewed and understood, from order taking to final delivery.
Expertise
Let’s say you ship, oh, I don’t know, scented candles. You probably know the ins and outs of every type of every candle your company sells, right down to the gauge of the wick. If I’m looking for a candle that burns brighter, lasts longer and smells better than all the rest, I’m coming to you.
I could always walk down aisle seven at the local supermarket for a 15-minute sniffing spree, but once I make a purchase, who’s to say I won’t be the one getting burned? They certainly aren’t going to tell me on the label!
Why should shipping be any different?
Strategy
Maybe you’ve spent your entire career in logistics. Hey, maybe you’ve spent the whole time with the same company. You know what makes each carrier tick, as well as everything there is to know about DIM weights and zone 2, 1-pound minimums. Chances are, you’ve negotiated more than one contract in your day.
But how can you be sure that they wouldn’t have tacked on a percent here or there if you were only sure where to ask for it?
As a third party negotiator, I have seen customers that can confidently check all three to the affirmative. But for each of those, there are dozens that cannot, and their companies lose money every day – without ever even knowing it – as a result.
Either scenario usually involves an exceptionally qualified, extremely intelligent individual or team. They simply specialize in other areas.
The reality is that, as with just about everything, if you want to be sure, it helps to have an expert. And whether you uncover savings you’ve never seen before, or confirm the great rates you knew you had all along, you’ll come away with a value-add that is hard to put a price tag on – peace of mind.
Tim Brock, Director of Sales, Transportation Impact can be reached at 910.297.5787,tbrock@transportationimpact.com or www.transportationimpact.com.
And when what you’re trying to accomplish is small parcel savings for your company, let’s face it, most companies don’t have the time nor the resources to dissect immensely complex parcel agreements and obtain information pertaining to the rates that are available in today’s market.
But in the unique industry of small parcel transportation, where few competitors exist, discussions involving processes and cost reduction must be looked at on a completely different level.
With UPS and FedEx being the only true current primary players surrounding this industry, the competitive advantage weighs heavily on their side. How many other companies, within any market, can implement annual rate increases that have such enormous negative impacts on the vast majority of their customers? In a business sense, the concept is great – two “suppliers” with eerily similar pricing structures and services bidding on one company’s shipping revenue. Too bad that concept isn’t great for your business.
Anyone can pick up the phone and call his or her respective carrier account manager and ask for better pricing, the same way any of us can call each of the dozens of airlines and compare rates. Even when the pool of competitors is two, you generally can receive a token discount. You might even hear how important your account is and how difficult it was for that account manager to even secure those additional savings. But the bottom line is that you can never know for sure whether the incentives you’ve negotiated are as good as they could have been.
This is the basis of the true need for utilization of a 3PN. Here are three reasons why any client will benefit from involving an outside party:
Knowledge
Like many aspects of modern business, transportation is ever-changing. Staying on top of service changes, rate increases, surcharge modifications and adjustments, as well as operational changes and/or improvements that carriers routinely make is a full-time job.
The expert attention to detail that a reputable 3PN can provide to the client will ultimately be the driving factor to securing the overall cost savings at the end of the process. Every possible element of a client’s shipping process must be reviewed and understood, from order taking to final delivery.
Expertise
Let’s say you ship, oh, I don’t know, scented candles. You probably know the ins and outs of every type of every candle your company sells, right down to the gauge of the wick. If I’m looking for a candle that burns brighter, lasts longer and smells better than all the rest, I’m coming to you.
I could always walk down aisle seven at the local supermarket for a 15-minute sniffing spree, but once I make a purchase, who’s to say I won’t be the one getting burned? They certainly aren’t going to tell me on the label!
Why should shipping be any different?
Strategy
Maybe you’ve spent your entire career in logistics. Hey, maybe you’ve spent the whole time with the same company. You know what makes each carrier tick, as well as everything there is to know about DIM weights and zone 2, 1-pound minimums. Chances are, you’ve negotiated more than one contract in your day.
But how can you be sure that they wouldn’t have tacked on a percent here or there if you were only sure where to ask for it?
As a third party negotiator, I have seen customers that can confidently check all three to the affirmative. But for each of those, there are dozens that cannot, and their companies lose money every day – without ever even knowing it – as a result.
Either scenario usually involves an exceptionally qualified, extremely intelligent individual or team. They simply specialize in other areas.
The reality is that, as with just about everything, if you want to be sure, it helps to have an expert. And whether you uncover savings you’ve never seen before, or confirm the great rates you knew you had all along, you’ll come away with a value-add that is hard to put a price tag on – peace of mind.
Tim Brock, Director of Sales, Transportation Impact can be reached at 910.297.5787,tbrock@transportationimpact.com or www.transportationimpact.com.
