With hurricane season upon us and extreme weather events becoming an increasingly common reality nationwide, the arrival of bad weather tends to illustrate that there are two types of people in the world: those who are prepared, and those who are not. The latter can be seen running around town in a frantic hurry to secure last-minute goods, perhaps not even knowing what it is they’re looking for, shouting anxiously as uncertainty bears down on them. The former rest comfortably, knowing their work is done, greeting the impending trials and tribulations with a confident smile.

The consequences of a bad negotiation can cause just as much damage to a company as if a massive storm blew the roof off. While physical damages can be repaired, being locked into long-term rates that are unfavorable is much harder for any business to crawl out from under.

If you want to be smiling comfortably during your next carrier negotiation, here are four steps you can take to prepare and weather the storm.

Have a Carrier Evacuation Plan

Understanding leverage during a negotiation, on both sides, is critical for your company to come out on top. It’s important to ask yourself the right questions while preparing, such as:

- Am I willing to switch carriers?

- If we did switch carriers, how would that affect the company operationally?

- If we were to switch carriers, who else is available to handle our business?

Knowing your options from an operational standpoint and who else in the marketplace could potentially be better for you are vital factors in being prepared for a contract negotiation.

Stock Up on Usable Data

During a bad storm, having potable water on hand is essential for survival. There’s a reason it flies off the shelves at stores when bad weather is on the horizon. During a negotiation, having usable data on hand is critical and is one of the reasons the supply chain industry is moving to embrace the digital revolution. Centralized access to real-time data across all modes can help you know where to set the bar before beginning a negotiation and can quickly and efficiently help business leaders make the necessary pivot during a tricky stretch of the back and forth.

Stock up on the necessary supplies beforehand, and know exactly what your company is shipping, plus when, where, and for how much.

Know the Warning Signs

Nowadays we can predict when and where storms will hit days before they ever make landfall. This kind of knowledge and foresight saves lives, and if you can manage to bring the same kind of preparedness to the negotiating table, it just might be your company that you’re saving.

Just like with an impending storm, it’s important to know what you’re looking at when comparing carrier contracts. How do minimums affect my base discounts? What revenue tier are we in, and what tier will we likely be in next year? What’s a guaranteed service waiver? The carriers deal with hundreds of these contracts each and every day. They know exactly what’s inside and where to look to increase their own savings. Do you?

Knowing the warning signs of what to look out for during a negotiation is crucial to avoid locking your business into a long-term deal that could potentially wipe out your bottom line. Familiarize yourself with carrier contracts, or reach out to industry leaders who can help.

Patience Is a Virtue, but Act Decisively

Storms can be terrifying, especially when we are faced with the prospect of losing the things that are most precious to us. The same is true for a business, and oftentimes the fear of missing out on potential savings can cause business owners to act impulsively without properly analyzing the situation. Having the patience to accurately identify real opportunities and sift through the fluff of false promises can be hard, but it is well worth it when your company is reaping the benefits of increased profits for years to come. Set your own timetable and don’t let anyone rush you into a poor decision.

When it IS time to act, do so decisively. Doing nothing can just as easily lead to profits leaking out of your supply chain. Change is hard, but the companies that are willing to speak up and make moves at the negotiating table are the ones who will walk away the most satisfied.

Whether you’re ready or not, the storms will come. Before going into any carrier contract negotiation, review your four-step preparedness plan. Don’t let your business be caught out in the storm.

Brad A. McBride has been in the transportation industry for 30 years. He founded Zero Down Supply Chain Solutions in 2003 after many years in high-level sales and operations roles in the logistics industry. Determined to make an impact on traditional industry practices and provide considerable savings for businesses, Brad also launched FreightOptics, the cutting-edge technology that provides one-login access to view and optimize all modes of transportation. Brad can be reached at brad@zdscs.com

This article originally appeared in the July/August, 2019 issue of PARCEL.