What’s in Your Shipping Profile?

by | May 25, 2020

3 min read

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Imagine for a second trying to go one-on-one with Michael Jordan. Or compete for a part in a movie against Meryll Streep. Or play a round with Tiger Woods. Who’s up for those challenges?

*Waits for a hand to raise*

How do you compete with someone with more experience, more information and more tools at their disposal than you?

That’s what it’s like when you try to negotiate with your carrier without all the right data backing you up. They have a very clear shipping profile built for your business that they’ll use to strike a deal that, sure, might benefit you some, but is mostly designed to add to their bottom line.

What makes up your shipping profile

Your shipping profile is incredibly valuable — to you and your carrier. It’s complex, but is made up a few basic parts:

  • Service types
  • Package weights
  • Package dimensions
  • Pick-up and delivery locations

Your carrier has all this information at their fingertips and uses it to create the rates and terms in your contract. Shouldn’t you have it as readily available as they do? If you don’t understand your profile deeply, you’re going to be at a distinct disadvantage any time you deal with your carrier.

Why you need to understand your shipping profile

Digging deep and understanding your shipping profile as well as your carrier does will put you in a much better position to answer questions like:

  • What’s different about your shipping profile from last year to this year?
    It’s hard to track all your data manually, much less compare it with last year and understand what changed and why. But tracking these changes will help you keep costs under control and give you a lot of great insights into your business.
  • What does it tell me about how I should run my shipping operations?
    Your shipping profile can tell you a lot, like whether your distribution network is optimized, whether you can offer free shipping, and changes you need to make to avoid surcharges. But only if you know how to gather and interpret it all, of course.
  • How will it change next year?
    This year has been game-changing for almost every shipper out there — some for the better and some for the worse. No matter which category you fall in, knowing exactly what’s changed in what and how you ship is imperative for your business next year and beyond.
  • How does it map to the General Rate Increase (GRI)?
    The GRI is an indication of the general increase in costs for each carrier, but how various rate changes within the annual update affect individual shippers is very, very different. For instance, in l2020, a 20% increase in the weight-based additional handling surcharge far exceeded the GRI of 4.9%. That surcharge will affect a company that sells toilets a lot differently than one that sells towels, won’t it?
  • What rates are shippers with similar profiles getting?
    Outside of calling up competitors and asking them, this one’s tough to crack on your own. Technology to help you anonymously see how your rates stack up can help.
  • How did COVID-19 affect your shipping profile?
    Like many shippers, you’re probably shipping a lot more residential these days — and getting hit with the residential surcharge a lot more often. Or perhaps you used to ship primarily overnight but are using more ground services now — at a rate that your contract isn’t optimized for. Knowing your shipping profile inside and out at all times will help you navigate abrupt changes more easily.

Knowledge is power

When you position yourself to be as informed as your carrier, you empower yourself to protect your profits and your business. Arm yourself with your own data so you can go to your next negotiation prepared to advocate for your business.

Speaking of knowing your data — do you know if any of the surcharges in our new eBook, 5 Budget-Busting Surcharges & How to Lower Them, are costing you more than they should? Read and find out!

Topics: Carrier Negotiation, Contract Negotiation