#Matthew white idrive logistics series#
ConclusionThank you for reading this four-part series on Understanding the Fine Print of Carrier Agreements. Adding these items to your list of available concessions can help you keep your agreement an "agreement." Don’t let itbecome a contract. Carriers put this language into agreements hoping to prevent you from shifting your parcel spend to competing carriers.Whether the issue is “early termination” or “minimum commitment,” flexibility is often under-appreciated until the day your company changes and it becomes necessary to renegotiate your carrier agreements. Minimum Commitment LanguageAlong similar lines is minimum commitment language where shippers are charged fees for failing to meet a minimum spend threshold.
Note: UPS almost always has this language in the fine print while we only see it occasionally with FedEx. With UPS changing course and adding early termination language into the fine print, shippers should prepare themselves and make elimination of this language an agenda item in negotiations. UPS used to provide this language as part of an addendum, separate from the main agreement, which made iteasy to instruct clients to only sign the main agreement but not the addendum. But what if your company's characteristics change? Is your agreement renegotiable to reflect new characteristics? Carriers can lock you in with some pretty simple language: “If you terminate this agreement before than you accept a termination charge equal to 2% of your net spend over the previous 52 weeks.” This language is what can turn a carrier “agreement” into a carrier “contract,” and preclude you from renegotiating (without paying fees) even when your company's characteristics change.'Early termination' language is much more prevalent in UPS agreements and have become more aggressively inserted into agreements in recent years. Part 1: Minimum Package Charges Part 2: Guaranteed Service Refunds (GSRs) Part 3: Surcharges Early Termination LanguageCarrier agreements are meant to be tailored to your company's shipping characteristics. To read parts one through three of this series, visit the links below. In this installment, we discuss the ways carriers can transform your agreement into a penalty-ridden contract. By Shaun Rothwell and Carl Hutchinson Welcome to part 4 of our series on “Understanding Fine Print” for carrier contract negotiation.
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