Parcel BI Case Study: Negotiating Rates and Minimums

Parcel BI is a powerful business intelligence tool built to help companies that ship often. Our platform holds many resources for these businesses to manage their parcel spend by identifying opportunities, exposing errors, and reducing costs.

When "4%" isn't really 4%

In today's blog, we are discussing a Parcel BI client who was looking to negotiate a better rate with their carrier. Since this client saw such a huge spike in ground sales, they wanted to contract a better rate.

This client went to their carrier and was very happy to hear that their rep was able to give them a 4% discount on their ground shipping rates! That sounded like a huge win for their business and should have saved them $400,000.

However, in reality it was only going to save them about $27,000, which is still big, but not what they thought they had agreed to based on how the carrier rep made it sound. What happened?

In a Word: Minimums

Impact of Minimums

The discounts only take your shipping costs so far. Every service has a minimum charge that every package will be billed at, regardless of the discount.

In the case of this client, 80% of his packages were already hitting this minimum charge, so only 20% of his packages were going to be impacted by this additional 4%, and many of those would continue to hit the minimum.

A lot of shippers don't really understand the impact that minimums have, and they think that a 4% discount means a 4% savings. Unfortunately, that is not the case. Our clients are able to use our negotiation tool, Contract Edge, to expose how much they will actually save with new rates and discounts.

By using Contract Edge to leverage your contract negotiations, you will be better equipped to discuss a new rate or discount. 

Learn More About Parcel BI 

If you are looking to manage your parcel spend, especially now that the holidays are fast approaching, contact us today at Parcel BI to learn more about how we can help you identify opportunities, expose errors, and reduce costs.

You can also watch more videos like this in our video library!

Loading Form...
Most Recent

Parcel BI Case Study: Identifying Fraud

By Parcel BI
February 25, 2021 Category: Case Studies

Parcel BI software is your custom solution to manage your parcel spend. Our BI solutions are designed to make it easy for your business to expose errors, identify savings opportunities, and reduce costs. We can also help protect your business from fraud by giving you the tools to identify compromised account numbers and more!

Are You Still Paying for Ground Collect Shipping?

By Parcel BI
January 26, 2021 Category: Savings, BI Solutions

Are you shipping using ground collect? If so, you might be getting hit with costly charges from the receiver! Parcel Bi is here to help shippers identify opportunities, expose errors, and reducing costs.

Parcel BI Case Study: 50% is Still a Failing Grade

By Parcel BI
January 14, 2021 Category: Case Studies

Brokered rates can seem like a great way to reduce costs on parcel spend, but more often than not, they actually do more harm than good. Check out this week's blog to see how Parcel BI can help expose unnecessary costs and other issues included with brokered rates.

© , Vizion360 | Powered by Virteom Logo Virteom