Negotiating USPS, FedEx and UPS Shipping Rates

Negotiating USPS, FedEx and UPS Shipping Rates

Cost-effective shipping rates are mandatory for anyone selling online. In order to successfully compete and improve the customer experience, you need to do your homework and find the shipping mix that best suits the needs of your business.

High-volume shippers can receive deeply discounted rates by negotiating prices with FedEx, UPS and the U.S. Postal Service®. Why? Shipping carriers want your business and, if you have high shipping volumes, are willing to reduce rates if it means you’ll use them to ship more packages.

Negotiating with FedEx and UPS

Negotiating lower shipping rates is typically as simple as establishing a relationship with the account manager of each of these shipping carriers and asking if you can discuss a discounted shipping rate for your account.

Neither FedEx nor UPS publishes volume threshold rates, so negotiations for discounted rates work on an individual basis. If you aren’t considered a company with high-shipping volumes yet but you’re projecting a significant increase in sales, UPS and FedEx may extend a three-month grace period which will allow you take advantage of lower negotiated prices. You will lose that lower rate if your sales goals aren’t met, which is why it’s important to provide accurate predictions.

Negotiating with USPS

USPS® offers Commercial Plus Pricing (CPP), deeply discounted postage pricing that is based on shipping volume. CPP is available for certain mail classes at varying shipping thresholds – in other words, your business qualifies if you ship a certain amount of pieces each year. That threshold is based on your shipping quantity (measured in pieces or postage value) from the preceding calendar year, with the exception of Priority Mail Express®, where qualification is based on the quantity sent in the previous four quarters.

The chart below shows the qualification threshold for USPS mail classes.

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It’s worth noting that the Postal Service has a long-term goal to eliminate CPP in 2017 to align with the industry standard of publishing only one set of commercial rate tables.

You can also negotiate deeper discounts with the USPS by requesting a Negotiated Service Agreement (NSA) from your account manager. USPS determines rates on an individual basis in these situations, as with the private carriers.

Author: ShipWorks

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