How 3PL's Negotiate Shipping Rates

3PL’s handle a variety of supply chain tasks for their valued clients. One of the most important things a good 3PL does though is to negotiate shipping rates.

In this blog post, we will look at how the best 3PL’s negotiate exceptional shipping rates for their clients. More specifically, we are going to tell you the 5 steps that any good 3PL employs to achieve it!

Understanding How 3PL’s Create Customized Solutions for their Shipping Clients

In order to provide anyone with value in any service industry, it’s first vital to understand how their business operates. When it comes to how a third-party logistics company serves its shipping clients, it all begins with discovery. An experienced 3PL will start the discovery process with a thorough review of your shipping data, analyze the shipping trends, weights & classifications, and supply chain lanes used in the transportation of their commodities and supplies. After reviewing all shipping related data, they are able to then compile this data into a full bid package. From that point, it goes out to their extensive carrier network.

There are five specific steps that help 3PL’s determine the best rates for your shipping needs:

• Collecting the Data: Not all data is identical – even in similar industries. Each business has a unique platform, customer base, and individual shipping needs. An experienced 3PL understands this reality and often collects data from multiple systems and vendors. They complete all the leg work for you to ensure the shipping data is consolidated, accurate, robust, yet simplified – for expedited, low-cost estimates.
• Personalized Bidding to the Carrier Network: One of the biggest reasons why some 3PL’s are better than others is the personalized relationships they maintain with carriers. Instead of sending bulk emails through multiple random carriers, the most professional 3PL’s contact national and regional carriers directly, prep them on all bidding requires and offer any information to ensure the bids are competitive.
• Leveraging their Portfolio: Carriers love working with 3PL ’s because they bring them millions of dollars in business each year. The best 3PL’s maintain a portfolio of qualified carriers that specialize in different shipping services, are regionally and nationally based, and operate with exceptional safety and service records. The 3PL often has redundant carriers on standby which increases competition and ensures the customer receives maximum shipping savings.
• Establish Savings Programs: Smart shippers understand the reality that the freight estimate process never ends. 3PL’s discover shipping discounts, minimums, and accessorials into account and update freight shipping costs when they are beneficial to their clients.
• Handling the Shipping Process: Shippers understand the frustration that typically comes with trying to take on the shipping process. The most experienced and value-based 3PL’s are able to become an extension of their supply chain. They can handle administrative work such as freight bill auditing, customer service, and even store and ship all of your products.

Final Thoughts

The best 3PL’s create carrier portfolios and negotiate shipping rates that fit preference and budget. By partnering with a proven 3PL, you’ll have peace of mind knowing that you’re getting the best shipping rates. All you need to do then is focus on growing your business.

Want to get a head start? Reach out to the experts here at Redwood Logistics!