1. NEGOTIATING
WITH
PARCEL
NEGOTIATION FIRMS

2. NEGOTIATING WITH
CONSULTING COMPANIES
• Are you familiar with gainshare and why it sounds
like a good deal?
• “If I don’t save you money then it costs you nothing.”
• Gainshare works for some,
• In particular the first year

3. NEGOTIATING WITH
CONSULTING
COMPANIES
• Their fees are negotiable.
• Consider asking for both a flat fee for a project as well as a gainshare
model.
• The project could be a combination of both by the way
• Ask for diminishing gainshare over time or as your volume goes up.
• Vey important if your company acquires a company during the term of the
agreement
• Ask for the first “x” percent for yourself as you would have been able
to achieve some discount without a consultant
• Put a cap on the gainshare paid out
• Ask for a performance guarantee
• If they have ongoing services like reporting ask for that for free as
part of the deal

4. NEGOTIATING WITH THE
NEGOTIATORS
• Make sure consultancy provides shipment level detail so you
can audit their savings calculations
• Make sure contract states they can’t take savings for modal
changes (e.g., they can’t take savings between FedEx Ground
by switching you to FedEx Smartpost) unless this was a
recommendation by the consultant and agreed to upfront and
there is a valid way to discern for example what shipments
now going Smartpost would have gone Commercial Ground
with Residential add on fee prior to their recommendation
• Or even more difficult to discern what shipments now moving
ground used to be the ones that formerly moved air

5. NEGOTIATING WITH THE
NEGOTIATORS
• Term of contingency is negotiable
• State in contract that savings is for current
company and not applicable to acquisitions
• Make sure contract states what ongoing work is to
be performed by the consultant (carrier
management, Quarterly Business Reviews (QBR’s),
impact model of carrier annual rate increase,
reporting, etc.)

6. NEGOTIATING WITH THE
NEGOTIATORS
• A consultant may be willing to give a percentage of
compensation to yourfavorite charity forthe
duration of the contract
• You may want to separate freight auditors from
consultants specializing in contract negotiation.
What’s the core competency?

7. NEGOTIATING WITH THE
NEGOTIATORS
• Most companies are not good at both
• Auditing for correct rate application
• Auditing for late shipments
• Negotiating parcel contracts
• There may not be a motive on the part of some
companies to negotiate the best for the shipper if it
diminishes the audit companies income for late
shipments or incorrect invoices
7

8. NEGOTIATING WITH THE
NEGOTIATORS
• If your shipping is significantly growing, you can cap
the total compensation in Years 2 & 3 to Year 1
compensation (so the consultant is not getting
unduly compensated simply based on your growth)
• A competitive bid of your business to the consulting
community will get consultants to significantly come
off their typical fees, however the low cost
consultant may not maximize your
net savings... evaluate capability,
experience, the
individual who will work your bid, and cost

9. NEGOTIATING WITH THE
NEGOTIATORS
• Give each firm a sample of your distribution (one
month Package Level Detail (PLD)) and ask them
to model potential savings.
• Granted this might get you thinking about trying to do this
on your own but the stakes are too high and the tariffs and
offers too complex for shippers to get the very best deal
on their own today.
• Compare results, you may want to go with the
company that can save you the most – but make
their compensation contingent on achieving that
result (or better) ... .
• (To avoid a firm assessing unrealistic savings, you may want to add a
clause to contract stating that if they don’t reach savings target, they’re
paid nothing.).

10. NEGOTIATING WITH THE
NEGOTIATORS
• Ask your carrier rep to find out what their
company’s experience is with consultancy.
• For example some parcel negotiation firms are in
litigation with the two major parcel carriers.
(Note, some carrier reps
may try to disparage consultancy to avoid revenue
dilution. Non-incumbent carrier may be better to
ask about references.)
• Deal only with principals, not untenured junior
associates that often don’t yield the same results...
• Know WHO will be handling YOUR account, and their
experience...ask for resumes of the consultants who will
be analyzing and negotiating.

11. IF YOU WOULD LIKE INFORMATION
OR A RECOMMENDATION AS TO
WHAT FIRM MIGHT BE THE BEST
FIT FOR YOU
• Jerry Hempstead
• 1724 Buckhorn Pl
• Orlando Fl 32825
• 407-342-3825
• gmhempstead@aol.com