What Are You Shipping Out? - Six Essential Questions To Ask Before Signing Your Next Shipping Contract

Having a solid shipping contract for your product-based business is essential. From small startups sending small batches each week, to larger companies with complicated supply chains, shipping contracts keep your business moving forward.

The wrong contract can cause supply chain issues, delay shipments to customers, and keep you from your business goals. As you get ready to negotiate or renegotiate a contract, it’s important to ask all the right questions before you commit.

Let’s discuss the top 6 questions you should ask to ensure you get the best possible shipping terms.

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What Are Your Shipping Volume Commitments And Flexibility?

The volume of goods you plan to ship plays a crucial role in negotiating your shipping contract. Asking about volume commitments is essential because many shipping providers offer tiered pricing based on the amount of goods you ship.

Understanding whether there is flexibility to adjust these numbers as your business needs change is also vital. For instance, if you are prone to seasonal fluctuations in your business, you’ll want a contract that accommodates these variations without penalizing you for lower volumes during off-peak times.

This initial question not only helps you manage costs but also prepares you for scaling operations up or down as needed.

How Does The Provider Handle Common Shipping Mistakes?

Mistakes in shipping, such as delays, lost items, or damaged goods, are inevitable. The way your shipping provider manages these issues can have an impact on your customer satisfaction and your reputation. Early in your negotiations, discuss how common shipping mistakes are handled.

Ask about the processes in place for resolving such issues, including their policies on refunds, replacements, and claims filing. This inquiry will help you understand the level of risk you’re assuming and the support you can expect when problems arise.

It also gives you a clearer picture of the provider’s customer service quality and reliability.

What Are The Terms For Service Upgrades Or Modifications In Your Shipping Contract?

As your business grows, it’s likely that your shipping needs will change with it. You may find yourself needing faster delivery times, additional handling services, or increased geographical reach.

Asking about the terms for service upgrades or modifications during your contract negotiations ensures that you can adapt your shipping services without renegotiation from scratch. Find out if there are any fees associated with service changes and how quickly adjustments can be implemented.

This question not only prepares you for future growth but also keeps you agile in a competitive market.

How Can You Optimize Costs For Small Parcel Deliveries?

When dealing with small parcels, the stakes are different, and the strategies you employ in your negotiations should reflect that. Small parcel contract negotiation often revolves around finding the most cost-effective methods for shipping smaller volumes.

Ask your potential shipping partners about their pricing structures for various parcel sizes and the thresholds that affect pricing tiers.

You should also inquire about any discounts for frequent shipments or loyalty programs that might be available. This is crucial because small savings per package can add up to significant amounts, especially for businesses that regularly ship small parcels.

Also, explore whether there are different rates for residential versus commercial deliveries and any surcharges that might apply depending on the delivery location or time.

What Are The Insurance And Liability Terms?

Shipping isn’t without its risks, and how these risks are managed through insurance and liability terms can be a game-changer for your business. Inquire about the types of coverage options available and what the claims process involves.

Understanding the extent of liability the carrier holds, and what falls on your shoulders, is crucial.

For instance, some carriers might offer limited liability for lost or damaged goods unless additional insurance is purchased. Clarifying these terms will help you assess your risk exposure and decide whether you need to seek additional insurance to cover potential losses.

Can You Access Customized Reporting And Tracking?

In today’s data-driven business environment, having access to detailed shipping reports and real-time tracking can offer a significant competitive edge. During negotiations, ask if the shipping provider offers customized reporting tools that align with your business’s logistics needs.

These might include detailed delivery reports, performance analytics, and real-time updates on shipments. You can also check how these tools integrate with your current systems to ensure seamless operation. Tracking shipments in real-time enhances your operational efficiency and also improves customer satisfaction by providing transparent and prompt shipping updates.

Asking the right questions during contract negotiations with shipping and small parcel companies can ensure that you get the right services for your business needs.

Whether you’re looking for services that can grow with you or ones that provide detailed data reports, there are plenty of great companies out there. And when you ask good questions, you’ll get the rates and services you need the most.