Learning how to negotiate freight rates is an important part of business and can sometimes mean the difference between success and failure. Today I am going to share with you 11 strategies you can use when forced to negotiate!
11 Tips on How to Negotiate Freight Rates!
#1 Stop focusing on negotiating the price and start selling value! The problem with most freight brokers/agents is the fact that they are more willing to compromise profit and thus their commissions, than they are to sell the value that they can bring to the table.
#2 Always enter every deal with a win-win mindset that is focused on allowing both parties to benefit. It is critical to focus on long term win-win relationships with both carriers and customers!
#3 It is critical to first build trust and a positive climate. Everyone has heard of the old adage “People buy from people they like.” One of my favorites books and a must read book is “How to Win Friends and Influence People”, by Dale Carnegie.
#4 Be confident, cool and courteous. You must first have the confidence to ask for what you desire and then the ability to not let emotions blur either parties focus.
#5 Look for opportunities to match needs in other areas. For example, you’re negotiating a rate with a carrier on a load from Buffalo to Boston and are about $50 apart on the price but you find out the carrier can do Boston to Buffalo for $50 less than you are currently moving it for. This is how freight brokers and carriers develop more synergistic relationships that are based on more than just price. The same types of synergies can exist with customers if you take the time to look for them.
#6 Understand the range prior to discussing price and try to remember that when buying transportation you can always increase your offer but rarely can you ever decrease it. Conversely, when selling transportation, you can always lower your offer but rarely increase it. Regardless of how they react, be confident and most of all never negotiate with yourself.
#7 Be theatrical if needed. Make or take another calls to support your value proposition /urgency. “Hey Joe, can you hold on for a minute, my phone is blowing up. (One minute later) Sorry Joe, I have another guys on hold about this load…should I tell them I’ll call them back or do we have a deal?”
#8 Woman negotiating against a man, be make sure you use femininity because men love it. It also doesn’t hurt to learn about sports like baseball, football and Nascar even if you hate it because it’s like sweet music to their ears.
#9 Never make a concession without first getting something in return. For example, “Ok Joe, I will agree to that but only if you agree to make sure the driver calls me immediately after being loaded and does at least one check call per day until delivered…deal?”
#10 Ask lots of questions so you can better understand what they really want and why. Questions like, “How did you come up with that rate?” or “How many times have you run this lane in the past month?” or “If we can agree on this deal, what other areas do you have trucks regularly?” or “If I can give you steady freight in this lane are you willing to work on the rate?”
#11 Always allow the other party to maintain his or her dignity in order to leave the door open for future business.
The fact is, if you are going to be a successful freight broker or freight agent you will need to learn how to negotiate freight rates with both your shippers and carriers. If you keep these 11 tips and strategies in mind the next time you are forced to negotiate I am confident both sides can win in the long run.
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P.S. Did you know that my Freight Broker Boot Camp online training course comes with a 60 day 100% money back guarantee? Give the course a try and if your not happy for any reason I will personally refund your money!!!!
Freight Broker Trainer / 6X Inc. 500 Fastest Growing Freight Broker