Things to be looking for when negotiating a parcel contract

1. Negotiating Parcel Contracts

2. IN CONFUSION
THERE IS PROFIT

3. You don’t get
what you deserve,
YOU GET
WHAT YOU NEGOTIATE.
WHATS NEGOTIABLE?
EVERYTHING!

4. Great News for shippers
• FedEx Express Standard List Rates
• Effective Jan. 7, 2013 FedEx Express package
and freight rates will increase an average of • 5.9%
for U.S., U.S. export and U.S. import services.
• The shipping rate increase will be partially offset by
adjusting the fuel price at which the fuel surcharge
begins, reducing the fuel surcharge by 2 percentage
points. (REALLY?)
• FedEx Express U.S. rates to Puerto Rico will change.
• FedEx International Premium® rates will change.
• Minimum rates for FedEx Express® services will change.
The carriers cant afford to loose
your shipments
And will fight to take your
shipments from a competitor

5. 2012 Rate Change Information
• Effective January 2, 2012, the published
rates have increased;
• Package
• Ground services increased a net 4.9%
through a combination of a 5.9% increase in
rates and a 1 percentage point reduction
in the UPS Ground fuel surcharge.

6. Lets fact check that fuel surcharge
UPS 1/3/2011 5.50% 9.00% FedEx 1/3/2011 5.50% 9.00%
UPS 2/7/2011 6.00% 10.00% FedEx 2/7/2011 6.00% 10.00%
UPS 3/7/2011 6.50% 11.00% FedEx 3/7/2011 6.50% 11.00%
UPS 4/4/2011 7.50% 13.00% FedEx 4/4/2011 7.50% 13.00%
UPS 5/2/2011 8.50% 15.50% FedEx 5/2/2011 8.50% 15.50%
UPS 6/6/2011 9.50% 16.00% FedEx 6/6/2011 9.50% 16.50%
UPS 7/4/2011 9.50% 14.50% FedEx 7/4/2011 9.50% 15.00%
UPS 8/1/2011 9.00% 14.50% FedEx 8/1/2011 9.00% 15.00%
UPS 9/5/2011 8.50% 15.00% FedEx 9/5/2011 8,5% 15.50%
UPS 10/3/2011 8.50% 14.00% FedEx 10/3/2011 8.50% 14.50%
UPS 11/7/2011 8.50% 14.00% FedEx 11/7/2011 8.50% 14.00%
UPS 12/5/2011 8.50% 14.00% FedEx 12/5/2011 8.50% 14.00%
UPS 1/2/2012 8.00% 12.50% FedEx 1/2/2012 8.00% 13.00%
UPS 2/6/2012 7.50% 11.50% FedEx 2/6/2012 7.50% 11.50%
UPS 3/5/2012 7.50% 11.50% FedEx 3/5/2012 7.50% 13.00%
UPS 4/2/2012 8.00% 14.00% FedEx 4/2/2012 8.00% 14.00%
UPS 5/2/2012 8.50% 14.50% FedEx 5/2/2012 8.50% 14.50%
UPS 6/4/2012 8.50% 14.50% FedEx 6/4/2012 8.50% 14.50%
UPS 7/2/2012 8.00% 12.00% FedEx 7/2/2012 8.00% 12.00%
UPS 8/6/2012 7.00% 10.00% FedEx 8/6/2012 7.00% 10.00%
UPS 9/3/2012 7.00% 11.50% FedEx 9/3/2012 7.00% 11.50%
UPS 10/1/2012 8.00% 13.50% FedEx 9/3/2012 8.00% 13.50%

7. How is AVERAGE calculated?
Carrier Year Carrier Year
Service Level 1 Service Level 1
Minimum Charge: 0.00 Minimum Charge: 0.00
Fuel Surchare: 0.00% Fuel Surchare: 0.00%
Weight Discounts Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 Weight Discounts Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8
Letter 0.00% 17.85 21.25 24.50 26.35 26.55 29.25 29.70 Letter 0.00% 18.75 22.35 26.10 28.10 28.30 31.20 31.65
1 0.00% 21.30 28.60 36.50 40.55 44.00 47.05 48.35 1 0.00% 22.40 30.05 38.75 43.05 46.75 49.95 51.35
2 0.00% 21.75 30.90 41.15 44.85 49.75 51.85 53.95 2 0.00% 22.85 32.45 43.70 47.65 52.85 55.05 57.30
3 0.00% 24.50 33.05 45.55 49.70 55.15 57.00 59.00 3 0.00% 25.75 34.75 48.35 52.80 58.55 60.55 62.65
4 0.00% 26.40 34.65 49.40 54.40 60.20 62.05 64.50 4 0.00% 27.75 36.60 52.45 57.80 63.95 65.90 68.50
5 0.00% 26.70 36.10 54.00 59.50 65.30 67.20 69.60 5 0.00% 28.10 37.95 57.35 63.20 67.95 71.40 72.40
6 0.00% 29.55 38.10 58.45 64.15 70.70 71.95 75.05 6 0.00% 31.05 40.05 62.10 68.15 73.55 76.40 79.70
7 0.00% 30.95 40.05 62.50 68.90 75.70 77.50 80.15 7 0.00% 32.50 42.35 66.40 73.20 78.75 82.30 85.15
8 0.00% 31.20 42.00 66.50 73.35 80.80 82.90 85.30 8 0.00% 32.80 44.40 70.65 77.90 85.85 88.05 90.60
9 0.00% 31.60 43.55 70.30 78.05 85.85 88.35 90.75 9 0.00% 33.20 45.75 74.65 82.90 89.30 93.85 96.40
10 0.00% 31.65 43.60 73.55 82.15 85.90 88.40 93.15 10 0.00% 33.25 45.80 76.50 85.45 89.35 93.90 96.90
11 0.00% 34.95 47.80 77.40 86.60 95.95 99.00 101.35 11 0.00% 36.70 50.50 82.20 92.00 101.90 105.15 107.65

8. Average Model
Remove Space
SHIPMENTS
If "#VALUE!" occur, try this button.
Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8
Letter 1 1 1 1 1 1 1
1 1 1 1 1 1 1 1
2 1 1 1 1 1 1 1
3 1 1 1 1 1 1 1
4 1 1 1 1 1 1 1
5 1 1 1 1 1 1 1
6 1 1 1 1 1 1 1
7 1 1 1 1 1 1 1
8 1 1 1 1 1 1 1
9 1 1 1 1 1 1 1
10 1 1 1 1 1 1 1

9. EVEN AS A PEDDLER
• I did not know all the concessions my peers
were getting form my own pricing
department (nor were they telling)
• I as a peddler did not tell shippers all the
discounts and waivers and concessions they
could get.

10. UNLESS
• You work for all three carriers (4 if you count the
USPS) in the pricing department, TODAY, you
don’t know what the best deal is or the lowest
price or incentives or concessions are.
• I WILL TRY TO FACILITATE
THE NEXT BEST THING

11. The basics

12. HAVE You
(or your employer)
EVER NEGOTIATED
Reduced
Address correction
Residential Surcharge
Delivery Area Surcharge
COD Fee
Dim Rule
Fuel Surcharge
Minimum charge
Insurance Minimum

13. HAVE You
EVER
NEGOTIATED
Waived
Address correction
Residential Surcharge
Delivery Area Surcharge
Oversize Rule
Din Rule
Fuel Surcharge
COD Fee
Minimum charge
Insurance Minimum

14. HAVE You EVER NEGOTIATED
Revenue Thresholds
Percentage’s off
Flat $ amount off
Flat rates
Start Up incentive
Per shipment pricing
Ramp up period
Quarterly incentive
Lock in the base year tariff &
rules
Yearly incentive

15. Fuel Surcharges
Caveat Emptor
Note to self: Are fuel surcharges Negotiable?
Can you tell your carrier
“the contract I sign now are the rates I want to pay for the duration of the
contract and you will not honor any additional charges for the length of the
contract.”
Currently the air fuel surcharge is 13.5% (example Jan 11 = 9%)(going to
14% Nov 5)
But the carriers have moved 2% of the fuel surcharge into the base tariff
every year for the last 6 years
So with compounding its about 13% of the fuel surcharge formula that’s
already baked into the base rate. They did this in anticipation of fuel
coming down so they did not have to forfeit all of it back to shippers

16. Do you have to agree that your
discount is off of the base tariff in
effect at the time of shipment
• Or would it be prudent to tell the carrier
• “the base tariff in effect on the day we sign the
contract is the base tariff that will stay in effect for
the duration of the agreement”?
• Nothing prevents the carrier from taking up the base
tariff all they want.

17. DOES YOUR CONTRACT
PREVENT YOUR CARRIERS
FROM DOING THIS?
• Dimensional Weight Replaces • FedEx Ground Dimensional
Oversize in 2007 Effective January Weight Rate Calculation (effective
1, 2007, Oversize charges for large February 5, 2007)
packages shipped via UPS Ground • For FedEx Ground shipments, a
services will be replaced with a rate calculation based on
simpler rate calculation based on dimensional weight will replace
dimensional weight. oversize charges for packages
that are 3 cubic feet (5,184 cubic
Dimensional weight rates are inches) or larger. These packages
applicable only to UPS Ground will be billed based on dimensional
packages that are three cubic feet weight unless actual weight is
(5,184 cubic inches) or larger. greater. Packages smaller than 3
Billable weight will be based on cubic feet will be billed based on
actual package weight or the actual weight.
dimensional weight, whichever is
greater. Packages smaller than three
cubic feet will be billed based on
actual weight 194 166
Some shippers still enjoy the old girth rule
139

18. • Both FedEx and UPS changed
• in January 2011
• the divisor on air and ground domestic
shipments from 194 to 166,
• the factor used to determine whether a
package is subject to higher Dimensional or
cubic rates

19. Can they change this at will?
• Dimensional Weight
• Express. Dimensional weight is calculated by multiplying the length by width by height
• of each package in inches and dividing the total by 166 (for shipments within the U.S. and
• shipments between the U.S. and Puerto Rico) or 139 (for U.S. export and U.S. import-rated
• international shipments). If the dimensional weight exceeds the actual weight, charges
• may be assessed based on the dimensional weight. Dimensions of one-half inch or greater
• are rounded up to the next whole number; dimensions less than one-half inch are rounded
• down. The final calculation is rounded up to the next whole pound. Dimensional weight
• applies per package or per shipment to all FedEx Express U.S. shipments in customer
• packaging, and per shipment to all international shipments and U.S.-to-Puerto Rico
• shipments in customer packaging. Shipments in FedEx packaging may be subject to
• dimensional-weight pricing.
• Ground. Dimensional weight may apply to FedEx Ground packages that are 3 cubic feet
• (5,184 cubic inches) or larger. Multiply the length by width by height of each package in
• inches. If the total is 5,184 or greater, calculate dimensional weight by dividing by 166
• (for shipments within the U.S.) or 139 (for shipments to Canada). If the dimensional weight
• exceeds the actual weight, charges may be assessed based on the dimensional weight.
• If the chargeable weight exceeds 150 lbs., a prorated per-pound rate will be used.
• Dimensions of one-half inch or greater are rounded up to the next whole number;
• dimensions less than one-half inch are rounded down. The final calculation is rounded
• up to the next whole pound. If the package measures less than 5,184 cubic inches,
• dimensional weight does not apply and charges will be assessed based on actual weight.
Might the next move to
be to 139 ?

20. MIKE GLENN
EVP FEDEX
OCT 10, 2012

23. UPS Store franchisee
files suit
against UPS
• According to the complaint, franchisees weigh and
measure customer packages in their stores, and
charge customers accordingly. They then ship the
package to UPS, where the company re-measures
the package and charges the store owners for the
difference.
• Perhaps here is a flaw in some of the shipments you
tender for which they charge you dimensional weight
• Can you negotiate out those defects?

24. DO YOU KNOW ?
• The USPS is able to negotiate with
you a competitive, shipper specific
rate for
– Priority Mail; & Express Mail
• They are extremely competitive in the
lighter weights
• Have no delivery area surcharge, no
residential surcharge, no address
correction fee and no fuel surcharge
• Do you know that these products FLY
on the FedEx & UPS networks when
moving over 300 miles?

25. DO YOU REALLY HAVE A “CONTRACT”?
• You can ask carriers, including incumbents, for bids
any time you like
– Unless you agreed to one, there is no penalty
– You can drop your carrier at any time
– Their recourse is only to diminish your discount over time
• Your contract says they can drop your discount
at any time.
• You are not compelled to give all your freight
to one carrier
– Unless you signed up for same
• They are not compelled to give you service.
– Do they pay you a penalty if they go on strike
or miss a pick up?

26. DO YOU REALLY HAVE A “CONTRACT”
• What you really have is an “at will”
agreement that says
• “If you give a carrier “x” amount of
business (shipments/revenue/both)”
• They “will extend to you discount “y” as a
dollar amount, or percentage off a tariff,
or both.”
• Or some have hard wired cell by cell rates

27. 50% Off Of What ?
Carrier Year Carrier Year
Service Level 1 Service Level 1
Minimum Charge: 0.00 Minimum Charge: 0.00
Fuel Surchare: 0.00% Fuel Surchare: 0.00%
Weight Discounts Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 Weight Discounts Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8
Letter 0.00% Letter 0.00% 11.40 11.65 12.10 13.65 16.90 17.60 17.75
1 50.00% 6.05 6.20 6.43 7.28 9.18 9.60 9.73 1 50.00% 5.83 5.95 6.18 7.00 8.83 9.23 9.35
2 50.00% 6.15 6.33 6.58 7.75 10.13 11.03 11.53 2 50.00% 5.93 6.08 6.33 7.45 9.73 10.60 11.08
3 50.00% 6.18 6.53 6.95 8.53 11.65 12.80 13.23 3 50.00% 5.95 6.28 6.68 8.20 11.20 12.30 12.70
4 50.00% 6.35 6.73 7.50 9.95 13.45 14.60 15.05 4 50.00% 6.10 6.48 7.20 9.55 12.93 14.03 14.45
5 50.00% 6.55 6.98 8.18 11.03 15.00 16.23 17.13 5 50.00% 6.30 6.70 7.85 10.60 14.40 15.58 16.45
6 50.00% 6.83 7.23 8.90 12.05 16.70 18.05 18.78 6 50.00% 6.55 6.95 8.55 11.58 16.05 17.35 18.03
7 50.00% 7.10 7.93 9.65 13.18 18.78 20.00 20.65 7 50.00% 6.83 7.63 9.28 12.65 18.03 19.20 19.83
8 50.00% 7.40 8.65 10.33 14.35 20.75 22.05 22.73 8 50.00% 7.13 8.33 9.93 13.78 19.93 21.18 21.83
9 50.00% 7.80 9.03 11.15 15.40 22.58 24.18 24.95 9 50.00% 7.50 8.68 10.73 14.80 21.68 23.23 23.95
10 50.00% 8.15 9.60 12.00 16.45 24.10 26.30 26.98 10 50.00% 7.83 9.23 11.53 15.80 23.15 25.25 25.90
MOST ASSUME THE BASE PRICE IS THE SAME

28. Pricing is More
complex with
international
Afghanistan
DHL Scale L
FedEx Scale O
UPS ?????
Albania
DHL Scale E
FedEx ?????
UPS Scale 407

31. MINIMUM CREEP
Minimum
YEAR Charge Y/O/Y Increase %
2005 $3.62
2006 $3.80 4.97%
2007 $4.00 5.26%
2008 $4.20 5.00%
2009 $4.57 8.81%
2010 $4.84 5.91%
2011 $5.17 6.81%
2012 $5.49 6.19%
42.95%

32. Minimums
Do I really have a discount at all?
Many contracts are set
so that no discounts Discou
Weight nts Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8
will drop below the rate Letter 0.00%
of a 1 30.00% 3.84 4.08 4.16 4.34 4.54 4.61 4.68
Zone 2, 1 LB charge 2 30.00% 4.09 4.35 4.72 4.82 5.08 5.19 5.36
3 30.00% 4.15 4.54 4.96 5.11 5.38 5.53 5.92
4 30.00% 4.25 4.68 5.21 5.45 5.65 5.89 6.34
5 30.00% 4.38 4.74 5.43 5.66 5.87 6.15 6.68
6 30.00% 4.49 4.88 5.51 5.80 5.96 6.33 6.83
7 30.00% 4.71 5.02 5.61 5.94 6.14 6.49 7.05
8 30.00% 4.90 5.15 5.76 6.06 6.33 6.78 7.46
9 30.00% 5.00 5.29 5.85 6.18 6.45 7.13 7.92
10 30.00% 5.16 5.31 5.96 6.36 6.73 7.62 8.44
Current Minimum is $5.49 before the fuel surcharge
Note to self: Ask for no minimum or lower minimum

33. Minimums
Do I really have a discount at all?
Many contracts are set Discou
so that no discounts will Weight nts Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8
drop below the rate of a Letter 0
package below the Zone 1 30.00% $5.49 $5.49 $5.49 $5.49 $5.49 $5.49 $5.49
2, 1 LB charge 2 30.00% $5.49 $5.49 $5.49 $5.49 $5.49 $5.49 $5.49
3 30.00% $5.49 $5.49 $5.49 $5.49 $5.49 $5.53 $5.92
4 30.00% $5.49 $5.49 $5.49 $5.49 $5.65 $5.89 $6.34
Example: Given a 30% 5 30.00% $5.49 $5.49 $5.49 $5.66 $5.87 $6.15 $6.68
discount, the red cells 6 30.00% $5.49 $5.49 $5.51 $5.80 $5.96 $6.33 $6.83
below would not 7 30.00% $5.49 $5.49 $5.61 $5.94 $6.14 $6.49 $7.05
receive the entire 8 30.00% $5.49 $5.49 $5.76 $6.06 $6.33 $6.78 $7.46
discount level 9 30.00% $5.49 $5.49 $5.85 $6.18 $6.45 $7.13 $7.92
10 30.00% $5.49 $5.49 $5.96 $6.36 $6.73 $7.62 $8.44
Note to self: Ask for no minimum or lower minimum

34. Shipment Pricing
• BUNDLED PRICE HAS 200 LB MINIMUM
FROM ONE SHIPPER TO ONE
CONSIGNEE
• BUNDLED PRICE HAS MINIMUM
CHARGES
• BUNDLED PRICE USES AVERAGE 15 LB
PIECES

35. NEW AND IMPROVED WAYS TO ENHANCE YEILD
Its not always apples-to-apples
AT THE MOMENT UNIQUE TO UPS

36. Accessorial Charges Analysis
SAT P/UP
1.88%
SAT DDL
17.29% DIM
19.32%
Accessorial charges
COD
7.97% can account for as
much as 40% of total
DAS
FUEL 19.79% spend!
26.32%
ADDRESS
Note to self: Do I know
09.18% the impact to my
INSURANCE
01.76% business

37. Delivery Area Surcharges (DAS)
Over 25% of the US population now lives
in a DAS zip
23,427 DAS zips
out of a total
of about 43000 or
53% of all zips
16,826 or 83% of the Commercial Delivery
Area zip codes carry an Extended

38. Declared Value
Going up again
• UPS and FedEx $0.80
in 2013
• $2.40 minimum
• Check to see if your employer is self insured
or has a cargo rider on its corporate
insurance policy
• Look into PIP www.pipinsure.com
• U-PIC www.u-pic.com
• Shipsurance www.shipsurance.com
Never ever buy carrier provided insurance.

39. Parcel Contract Negotiations

40. Retention
Penetration
Conversion

41. Penetration Selling for the Carriers:
They have some of your business and are
pursuing more.
Ground, Air, International

42. Conversion Selling for the Carriers:
They have NONE of your business:
•Expect Aggressive Discounts
•Make sure all service concerns are covered
•Test for smooth operational transition
•Expect your incumbent carrier back in a few
months with a “Conversion Quality” contract
Note to self: Conversion status gets the best pricing!

43. Is this news?
• A District Sales Manager has more pricing latitude than a
sales rep
• A Regional Sales Manager has more pricing latitude than
a Sales Manager
• An Area VP has more pricing latitude than a Regional
Sales manager
• A Senior VP has more latitude than an Area VP
• An Executive VP has more latitude than a Sr VP
• The President has more latitude than an EVP
• And whomever you get involved wants to win and would
hate to be blamed for loosing a deal
Note to self: Get my deal up the food chain as high as I can!

44. UPS Says the same folks
make the decisions
for all the products
Note to self: Promote ALL the biz to get the best pricing !

45. UPS says the sales folks are
commissioned more for inbound
collect. Therefore you can get a
better deal by holding out the
inbound you can control

46. The complexity
Of Earned Discounts with package or revenue
thresholds

47. IN CONFUSION THERE IS PROFIT
They do this, because they can

48. EXAMPLE $ PER WEEK
Band ($$ per week)
$0 - $969 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
$970 - $1399 22.3% 26.5% 24.7% 26.8% 13.0% 18.0% 0.0% 4.9% 0.0%
$1400 - $1749 31.9% 37.8% 35.3% 38.3% 18.5% 25.7% 0.0% 7.0% 0.0%
$1750 - $2139 45.5% 54.0% 50.4% 54.7% 26.4% 36.7% 0.0% 10.0% 0.0%
$2140 - $2519 47.8% 56.7% 52.9% 57.4% 27.7% 38.5% 0.0% 10.5% 0.0%
$2520 + 50.2% 59.5% 55.5% 60.3% 29.1% 40.4% 0.0% 11.0% 0.0%
Company 4 1DA LTR 1DA PKG 1DP LTR 1DP PKG 2DA LTR 2DA PKG 3DS PKG GR COM GR RES
Band ($$ per week)
$0 - $26,399 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
$26,400 - $37,719 6.4% 14.2% 7.4% 8.8% 2.5% 14.6% 0.0% 6.9% 1.5%
$37,720 - $48,499 9.1% 20.3% 10.5% 12.6% 3.5% 20.9% 0.0% 9.8% 2.1%
$48,500 - $59,279 13.0% 29.0% 15.0% 18.0% 5.0% 29.9% 0.0% 14.0% 3.0%
$59,280 - $70,059 13.7% 30.5% 15.8% 18.9% 5.5% 31.4% 0.0% 14.7% 3.5%
$70,060 + 14.4% 32.0% 16.6% 19.8% 6.0% 33.0% 0.0% 15.4% 4.0%
Company 8 1DA LTR 1DA PKG 1DP LTR 1DP PKG 2DA LTR 2DA PKG 3DS PKG GR COM GR RES
Band ($$ per week)
$0 - $8,030 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
$8,030 - $11,250 15.3% 17.5% 12.5% 12.0% 6.7% 16.9% 9.5% 9.8% 1.5%
$11,250 - $14,460 21.8% 25.0% 17.9% 17.1% 9.5% 24.2% 13.5% 14.0% 2.1%
$14,460 - $17,680 31.2% 35.7% 25.6% 24.4% 13.6% 34.5% 19.3% 20.0% 3.0%
$17,680 - $20,890 32.8% 37.5% 26.9% 25.6% 14.3% 36.2% 20.3% 21.0% 3.5%
$20,890 + 34.4% 39.4% 28.2% 26.9% 15.0% 38.0% 21.3% 22.1% 4.0%

49. EXAMPLE PKGS PER WEEK
Company 5 1DA LTR 1DA PKG 1DP LTR 1DP PKG 2DA LTR 2DA PKG 3DS PKG GR COM GR RES
Band (Pkg per week)
0 - 94 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
95 - 134 21.2% 19.7% 23.7% 17.2% 7.9% 0.0% 0.0% 0.0% 0.0%
135 - 154 30.3% 28.2% 33.8% 24.5% 11.3% 0.0% 0.0% 0.0% 0.0%
155 - 184 43.3% 40.3% 48.3% 35.0% 16.1% 0.0% 0.0% 0.0% 0.0%
185 - 214 45.5% 42.3% 50.7% 36.8% 16.9% 0.0% 0.0% 0.0% 0.0%
215 + 47.8% 44.4% 53.2% 38.6% 17.7% 0.0% 0.0% 0.0% 0.0%

50. 4 BANDS OF REVENUE
• Band 1: 0%-49.9% of target revenue
• Band 2: 50%-89.9% of target revenue
• Band 3: 90%-109.9% of target revenue
• Band 4: 110%+ of target revenue
Company 3 1DA LTR 1DA PKG 1DP LTR 1DP PKG 2DA LTR 2DA PKG 3DS PKG GR COM GR RES
Band ($$ per week)
$0 - $339 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
$340 - $619 20.8% 20.8% 20.8% 8.2% 0.0% 17.1% 0.0% 3.4% 0.0%
$620 - $759 29.7% 24.7% 29.7% 11.7% 0.0% 24.5% 0.0% 4.9% 0.0%
$760 + 31.2% 31.2% 31.2% 12.3% 0.0% 25.7% 0.0% 5.4% 0.0%

51. 4 BANDS OF
INCENTIVES
• Band 1: 0% of target incentive
• Band 2: 70% of target incentive
• Band 3: 100% of target incentive
• Band 4: 110% of target incentive
Company 3 1DA LTR 1DA PKG 1DP LTR 1DP PKG 2DA LTR 2DA PKG 3DS PKG GR COM GR RES
Band ($$ per week)
$0 - $339 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
$340 - $619 20.8% 20.8% 20.8% 8.2% 0.0% 17.1% 0.0% 3.4% 0.0%
$620 - $759 29.7% 24.7% 29.7% 11.7% 0.0% 24.5% 0.0% 4.9% 0.0%
$760 + 31.2% 31.2% 31.2% 12.3% 0.0% 25.7% 0.0% 5.4% 0.0%

52. 4 TIER DISCOUNT STRUCTURE
Company 1 1DA LTR 1DA PKG 1DP LTR 1DP PKG 2DA LTR 2DA PKG 3DS PKG GR COM GR RES
Band ($$ per week)
$0 - $939 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
$940 - $1699 38.5% 38.5% 0.0% 0.0% 0.0% 25.0% 0.0% 3.6% 0.0%
$1700 - $2079 55.0% 55.0% 0.0% 0.0% 0.0% 35.7% 0.0% 52.0% 0.0%
$2080 + 57.8% 57.8% 0.0% 0.0% 0.0% 37.5% 0.0% 5.7% 0.0%
TARGET
Company 3 1DA LTR 1DA PKG 1DP LTR 1DP PKG 2DA LTR 2DA PKG 3DS PKG GR COM GR RES
Band ($$ per week)
$0 - $339 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
$340 - $619 20.8% 20.8% 20.8% 8.2% 0.0% 17.1% 0.0% 3.4% 0.0%
$620 - $759 29.7% 24.7% 29.7% 11.7% 0.0% 24.5% 0.0% 4.9% 0.0%
$760 + 31.2% 31.2% 31.2% 12.3% 0.0% 25.7% 0.0% 5.4% 0.0%

53. They can price specifically to
•
your shipment distribution
by weight and zone
Cell by Cell / Matrix Incentives

54. All Services
Make sure they count all the Commercial
revenue
Residential
Agreement Page - 42 Services
Inbound
Outbound
Third Party
Make sure all
sites and
account
numbers are
included
Note to self: Have I asked for a discount on all the services, all the
sites and all the billing types!

55. Anybody can get 44% off on air
They know
and 19% off on ground the tricks

56. WHAT SHIPPER
KNOWS WHAT THEY ARE PAYING
AND
HOW WILL A SHIPPER EVER COMPARE
WHAT THEY ARE PAYING TO ANOTHER
CARRIERS OFFER

57. Parcel Magazine & Morgan Stanley
SURVEY RESULTS
PARCEL TRENDS REVEALED
Rate Your Carriers
Part 1: Results of the Annual Best • 11 percent of survey
Practices Survey:
Over 250 Respondants, respondents use
Over 90 million parcels consultants to negotiate
rates.
• Consultants negotiate
more favorable rates,
driving discounts 49%
lower than if the
company negotiates.

58. WHAT MIGHT BE NEGOTIABLE
• EVERYTHING!!!
• RATES
• DISCOUNTS
• ACCESSORIALS
• DELIVERY COMMITMENTS AND
GUARANTEES
• FUEL SURCHARGES
• CLAIMS RATIO’S

59. Presenting your
Freight Characteristics
What's attractive to the carriers
Attribute Good Bad
Number of locations Few Many
Number of shipments Lots Few
Weight High Low
Commercial v residential High Low
Pick up density High Low
Delivery density High Low
Ground distance Long Short
Air Distance Short Long
International v Domestic High Low
Multi piece shipments Many Few
Liability Low claims exposure High Claims
Seasonality Year round Seasonal peak
Note to self: Package my book of business to maximize the
appeal to the carrier

60. WHATS POSSIBLE
• MONTHLY, QUARTERLY, YEARLY
INCENTIVE PROGRAMS
– BASED ON REVENUE OR SHIPMENTS
OR BOTH
• AUTOMATION INCENTIVES
• START UP INCENTIVES
• RAMP UP/IMPLEMENTATION PERIODS

61. Pay Attention
money is wasted on selecting air services where next day is guaranteed via
ground and or second day ground where 2 day air is being used.
Note to self:
Ask for a
service agnostic
tariff

64. Service Guarantee
Lets cut to the chase
• In the event Brown, Purple or Yellow Carrier • (or postal code for international shipments). In
fails to attempt delivery within the time addition, Brown, Purple or Yellow Carrier reserves
published on the Brown, Purple or Yellow the right, in its sole
Carrier website, or as • discretion, to refuse to honor a request for a credit or
• provided when 1-800-PICK-Brown, Purple or refund of transportation charges for a
Yellow Carrier is called, Brown, Purple or • package when that package is not accompanied by a
Yellow Carrier, at its option, will either credit smart label and timely Package Level Detail
or refund the • (PLD) information, as defined in the Brown, Purple or
Yellow Carrier Tariff, at the time the package is
• transportation charges for each such tendered to Brown, Purple or Yellow Carrier.
package to the payer only, upon request, • (d) Each Brown, Purple or Yellow Carrier 2nd Day Air
subject to the A.M. package is addressed to a commercial, not
residential, address.
• following conditions. This is the sole • A residential delivery is defined as provided in the
remedy available under the Brown, Purple Brown, Purple or Yellow Carrier Tariff and in this
or Yellow Carrier Service Guarantee. service guide.
• (a) Brown, Purple or Yellow Carrier’s • (e) Each package in a shipment bears a Brown,
guaranteed delivery schedule has been Purple or Yellow Carrier Saturday Delivery routing
obtained by referencing Brown, Purple or label when optional
Yellow Carrier’s website or • Saturday service is requested and available.
• (f) Each package in a shipment is tendered to Brown,
• contacting a Brown, Purple or Yellow Purple or Yellow Carrier during Brown, Purple or
Carrier Customer Service office. "On-time" Yellow Carrier’s published business hours.
means, subject to the terms of this Brown, • Packages received from or destined to certain
Purple or Yellow Carrier locations may require earlier pick up times
• Service Guarantee, delivery is attempted • (available at the Brown, Purple or Yellow Carrier
within the Brown, Purple or Yellow Carrier website) to meet delivery time commitments.
guaranteed delivery schedule. • (g) Brown, Purple or Yellow Carrier is notified in
writing or by telephone of a service failure within
• (b) Each package is properly recorded on a fifteen (15) calendar
Brown, Purple or Yellow Carrier source • days from the date of scheduled delivery and is
document or in a Brown, Purple or Yellow advised of the consignee’s name and address,
Carrier automated • date of shipment, package weight and Brown, Purple
• shipping system. or Yellow Carrier tracking number.
• (h) For Brown, Purple or Yellow Carrier Worldwide
• (c) Each package in a shipment bears the Expedited shipments, the guarantee shall apply only
appropriate Brown, Purple or Yellow Carrier to shipments
tracking label and an address label, or • originating in, or destined for, the United States, and

65. Waive the service guarantee
• All carriers fail
• All the guarantee means is that is the carrier fails, you can
apply for your money back
• So the failures require work on your part to find them and file
for them
• Or for a third party to do, with whom you are now going to split
some of that savings
• So why not figure out what percentage of your bill is saved by
filing for service failures
• Then say to the carrier that you will waive the right to file
service claims and that the carrier just reduce the tariff by that
amount
• Or send you a refund for a percentage at the end of the month.

66. It’s the win-win
• You don’t have to research them and file
them
• You don’t have to split the savings with an
audit firm
• The carrier does not have to research them
for validity
• And you get the savings you deserve
inherent in the service guarantee

67. PREpurchased Options
• FedEx Express® Prepaid Stamps
• These prepaid shipping labels for FedEx Express® • USPS
shipments take the place of airbills, allowing you
to allocate shipping costs — and specify a FedEx® • Has a menu of flat
delivery service — upfront. FedEx Express Prepaid
Stamps are nonrefundable and nontransferable. rate priced options
FedEx reserves the right to bill an additional
amount for packages that exceed standard
acceptance limits or require special handling.
• Service DescriptionDelivery AreaAvailable for
FedEx Priority Overnight®, FedEx Standard
Overnight® and FedEx 2Day® delivery
throughout the contiguous U.S.Instructions
• To order, call 1.901.397.3650 or download our
online order form.
• If you have questions, please
download FedEx Express Prepaid Stamps FAQs.
• Minimum order is 10 prepaid stamps.
• You must specify a shipment weight and FedEx
Express delivery service.
• Contact your FedEx account executive for more
information.
• Exceptions
• FedEx SameDay®, FedEx First Overnight®, FedEx
Express Saver® and FedEx Express® Freight
services are not available.
• No additional service options, such as Saturday
delivery or Hold at FedEx Location, are available.
• Special FeesA $4 fee may apply for courier pickup
if the shipper does not have regular scheduled

68. Carrier Agreements
Important to Review RIGHT NOW:
• Revenue commitments
• Locations included
• Discounts offered
• Terms and conditions
• Addendum’s
• Rate charts
• Portfolio Services
Note to self: Have things changed and what's negotiable?

69. If you liked what you heard
• Jerry Hempstead
• 1724 Buckhorn Pl
• Orlando Fl 32825
• 407-342-3825
• gmhempstead@aol.com

70. Notes to Self
Note to self: Conversion status gets the best pricing!
Note to self: Get my deal up the food chain ad high as I can!
Note to self: Package my book of business to maximize the
favorable and downplay the unfavorable!
Note to self: My LTL is eventually going to be a big carrot to the
parcel carriers!
Note to self: Promote ALL the biz to get the best pricing
Note to self: Start contract during highest volume or have the carrier
start you off got a guaranteed time with the highest discount!
Note to self: Have I asked for a discount on all the services, for all
my sites and all the billing types
Note to self: Have things changed and what's negotiable?
Note to self: Consultants can get you a 49% better discount than
you can achieve on your own