Tips to help you Negotiate Freight Contracts more Successfully
When you negotiate freight contracts, you should use a variety of strategies depending on the nature of the contract. The first step is to define what contract you are negotiating. Freight contracts can be simple or complex and can be negotiated with different parties. A simple contract is one that is straightforward—for example, a contract to ship X tons of Y material from Z city to A city for a price of $B by date D. In this case, negotiating could involve determining the optimal price for both parties and deciding whether to add contingencies such as penalties for delays or weather-related issues. More complex contracts could involve performance incentives such as bonuses for delivering before the deadline or extra payments if the material is delivered in excellent condition. The more complex the contract, the more skilled negotiators, should be involved on both sides.
Once you have defined your freight contract, you need to decide who should be involved in negotiation on either side. If it’s a simple contract, you may not need more than one or two people on each side; if it’s complex, you may need lawyers and/or other professionals (such as engineers) working together to negotiate terms and contingencies.
Elements to consider when you negotiate freight contract
When negotiating freight contracts, there are a number of elements to take into account.
The first is the terms of the contract, which can be one-time or recurring, and should make clear what happens in case of overages, damage, or other issues.
It’s also important to consider the pricing model: will you be paying by weight, volume, or something else? What are the minimums and maximums? Are there any additional fees?
Are you working with a broker or a motor carrier? If it’s a broker, who is the motor carrier that will actually be performing the work?
It’s important to know how often cargo will be inspected throughout its journey, as well as how long it will take for your cargo to get from point A to point B.
And finally, are there any special shipping requirements that need to be considered?