Some Negotiation Tips...Yeah, its that time of year!

Well, its getting to that time of year when carrier contracts will be negotiated...and the rate structure is just one issue that should be reviewed. Here are some tips for your upcoming negotiations:

Pickup performance. How can your delivery be made on time if your pickup isn't on time? Late pickups cost you money, perhaps at overtime rates. Find out your carrier's on-time pickup percentage and how it calculates that measurement. Carriers should also be able to provide this measurement on a customer-specific basis.

On-time delivery is calculated in a similar way as pickup performance. This statistic should be readily available on customer reports --by customer and/or terminal.

Invoicing accuracy. This important metric is often overlooked, but can save your company time and money. Carriers that invest in an imaging system that allows them to use information directly off a customer's bill of lading can ensure accuracy while improving invoicing efficiency. If this isn't one of the measurements you expect to receive from your carrier, it should be.

Interactive web site. Examining your carrier's web site can help you determine the availability of customer service when you need it. Is the web site interactive in a number of ways to provide you with the information you need? The site should allow you to enter pickup requests and download imaged documents and customized reports. It should offer a variety of tracking and tracing capabilities, rate quotes, transit times, and terminal information.

Good communication. Determining how much customers are involved in a carrier's decision-making process indicates the level of interest a carrier has in delivering quality service. Initiating a good communication program with customers is essential.

Responsiveness. You should be able to talk with experts in each of your carrier's departments when you need to. Is the line of communication open and results-oriented? Maintaining a strong communication link goes hand-in-hand with developing a strong, effective partnership.

Centralized customer service. A quick and readily available information resource is valuable to you and your customers. This resource should provide you with an answer to any question you might have about transporting or tracing your shipments.

Empathy and Proactive Account Management. A carrier should know when there are service failures and why. If your customer receives 98 percent of deliveries on time, what about the other two percent? Every service failure should be followed up on, not only to find out what is wrong, but also to correct the problem so that it isn't recurring. Taking this action will make the carrier a better company, and in turn, provide you with better performance. Ask your carrier how it analyzes service defects.

Continuous Improvement Mentality and Training. The kind of training available to your carrier's employees, how often they are trained, and the degree to which they are trained should be part of the company's strategy in providing superior service to customers. Asking questions about training will give you an indication of the company's emphasis on quality performance. Is there a dock workers'training program in place that emphasizes freight handling? Are drivers trained? Is hazardous material training available for all employees? What about general safety training measures? Additionally, the carrier should have accountability procedures in place on each dock to help reduce the number of claims.

Claims Structure and Response time. Getting a shipment to its destination on time doesn't matter much if it doesn't get there intact. How quickly are claims settled? What is the percentage of claims-free service? What is the claims ratio of the terminal that will service your customers? Your carrier should make all these performance statistics available for individual customers and terminals.

Invoice accuracy. This important metric is often overlooked, but can save your company time and money. Carriers that invest in an imaging system that allows them to use information directly off a customer's bill of lading can ensure accuracy while improving invoicing efficiency. If this isn't one of the measurements you expect to receive from your carrier, it should be.

These are just a few things that should be reviewed on a consistent basis...good luck this year! You guys are going to need it!