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In the 21st century couriers have become an integral part of global business, traversing virtually every sector. As with any industry, a huge majority of this trade is swallowed up by the largest multinational companies, for example DHL, Fedex, UPS etc. These immediately recognisable brands have rigid SOPs (standard operating procedures) in place, and firm pricing structures that are typically updated monthly. What’s most surprising is the difference in price between these major global players. You may find that for certain destinations DHL is the cheapest option, or for slightly heavier parcels Fedex might work out to be your best bet. And this could potentially vary from month to month. So how to choose between them?
One option could be to use a price comparison website. They will run algorithms using the data you have input to scan the market, factor in their own cut, and present you with the options available. All well and good, but are you really getting the best value for money? Not necessarily, as we will see below.
Another option would be to contact one of the companies and ask for preferential business rates. Depending on how often you send couriers, they may offer you terms based on a minimum amount of business. The more you send, the more discount you will be offered. Sounds great in theory. The downside to this will manifest itself if for some reason your business doesn’t send enough couriers for the month in order to qualify for your negotiated preferential rate. In this event you will relapse to the standard tariff rates and face a substantially larger bill at the end of the month. In addition you may struggle to subsequently renegotiate a lower rate.
As previously discussed there may not necessarily be a cheapest option for all couriered items, again you might find one firm typically works better for a certain size or weight of parcel, another works out cheaper for domestic business, a third might offer strong rates to China, and so forth. So in the absence of a ‘one size fits all’ courier company, and without tying yourself in to monthly contractual obligations to a specific firm, how can your company guarantee a good deal?
A third party company, such as a freight forwarder (3PL) will usually be happy to help you. Although generally associated with palletised and container loads of goods, they will already have preferential terms in place with any given number of couriers, so you don’t need to worry about negotiating with all of them in turn. They’ll also be able to guide you through the options available and present you with the most economical and expeditious method of transporting your goods. Even after factoring in a nominal fee for their time, their terms can be anything up to 80-90% cheaper than the standard tariff. A final benefit, particularly with an independent 3PL provider is a more focussed customer service than you would naturally expect from a multinational courier company. Should anything go wrong with your consignment, your firm would have a dedicated contact to fall back on who could deal with it on your behalf.
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