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How do you know when or when not to negotiate?

So many things are set and nonnegotiable, like grocery prices in the store, speed limits, information in the textbooks and rules and guidelines of all sorts. We are raised not to question authority, and it's only through adversity and painful schooling, that we get some authority and room to negotiate some things. So as an owner operator, we can't negotiate what taxes we will pay to each state. IFTA is set beyond our reach. There is so little wiggle room to negotiate anywhere, even though everything can be negotiated. How to negotiate line haul, for example?

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There is a saying used by skilled negotiators, that says "Anything is Negotiable"

While that may be true, I think many of us need to look at what the odds are of succeeding in the negotiation. I would certainly rule out most negotiations where the government would be concerned.

I do however know people who do attempt and sometimes succeed in negotiating in grocer or department stores.

When it comes to freight rates, I would highly recommend that you always negotiate. There really is no set pricing. Even carriers have different pay scales for their mileage contracts.

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Point well taken, but the subject warrants a little more investigation. If in grocery store I see tomatoes are priced twice of what I'd pay for them at Walmart, talking to cashier about matching the price would get me nowhere, I would have to talk to at least manager of the store, if not to the central office. That is lot of effort for few bucks, and not to account for having to keep up with all the pricing etc.

To correlate this to trucking scenario, when we call brokers, we may encounter first receptionist, then dispatch, who transfer the call and or read off the computer screen what the linehaul was set to be. So like with cashier in the grocery store I may get nowhere by asking for better rate.

Many times even if it is the same shipper, two different brokers offering same commodity, but to ship to different locations, one load can pay twice per mile the the other. This actually happened to me recently, where i took a load from one broker and was called by another one, as i was pulling outt of the shipper, he was offering me the load from the same location for twice per mile, a shorter run, to different destination. So different lanes may warrant different pricing, as we can't compare apples to oranges.

Just these two issues give you the glimpse at the complexity involved with pricing, and learning to know what different lanes are and if shorter runs should pay more. This is not even touching the people side of equation. The personalities, the length of the temper fuse, or the height of the greediness factor.

It takes courage to press the envelope. Every one wants more. Sometimes broker would say I could do 50 bucks more, and still not meet my requirements. Sometimes it seems good enough just to find something going in a desired dirrection I don't want to question it, when there may be 10 other trucks waiting for a load.

That touches upon load board that offer truck to load ratios and the usefulness of that information. There are so many variables, one has to first determine what is it they are negotiating for. I don't think it's always the money. I don't think that it always should be. It should be the best value for the persons involved and that can take some time to determine.

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you should not negotiate until you gather information before the negotiations begins, knowledge is power.

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you need to know your numbers, and know what supply is demanding in that area

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The difficulty is in that the changes occur fast, prices are going up and down, lanes change, it seems like as soones as you learn one thing, it gets outdated or changed. Like shifting sand, negotiating about linehaul is like shooting in the dark and hoping you'll get that desperate shipper who needs you and will pay handsomely. Mostly you get, this is all I can do, take it or I got three others who will.

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Only negotiate when it will improve your standing in a deal . If you can see a window for improvement, then approach the other party and engage in discussion about the deal. If no improvement can be found ,then you'll have to decide if you can live with the deal,or not.

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Yes, I agree. You addressed the when to negotiate and when not. So there is some strategy involve in getting a better deal. I wish you could expand on it.

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Give them your price, if they sound taken aback and you've got room to move down, tell them it includes F.S.C.

If on the other hand they seem relieved, you've under priced it, quickly tell them that " of course there is a F.S.C. (or permits, pilot car or whatever,) on top of that."

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Are we here dealing with brokers or shippers?

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When dealing with brokers I use as many research tools as possible. ITS has negotiation indicator, loads to available trucks. Also use Transcores Rate index.

Also if they call me, I shoot 10% higher, when they post the rate I also shoot 10-20% higher.

When they call me saying, Hi I have an urgent load, a driver never showed up, there going to pay well for the transportation.

Know as much as you can about the lane and region.

the tools are well worth the money in my opinion.

Travis

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I make an attempt to negotiate everything. My thought is; the worse that can happen is they say no, and that is where I'm at if I don't ask, so I have nothing to lose.

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Well, if you are dealing with brokers, most of them, especialy the 'big box' brokers, will always low ball the rate. If I am calling about a load on a load board (I use the Trucker's Edge board) I double check the mileage, check the rate on that lane just to get an idea of what the average is. I know my numbers (cost of operations) and I come up with the dollars I WANT to do the load and the dollars I NEED to do the load.

Call the broker and if he says "How much do you want to do this load?" I give him the high number. Sometimes, they just hang up...lol. Usually, they say. "Well, we were looking at about $XXXX..." So now you have the two extremes. You have to come down and they have to come up.

Now, if the broker calls me, I know from the start that they are in a bind and I hold pretty firm to my 'want' number. I have had situations where I have been paid more for running a load than the broker is getting from his customer. If I am the one looking for the load, I have to ask myself 'how bad to I want to go where this load is going?'

You may not be able to negotiate the price of tomatos in the grocerystore, but freight rates are almost ALWAYS negotiable....

Know your numbers, be professional, be polite.

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In regards to loads I negotiate every time and consider everything in business negotiable.

My very first step is to check the broker's credit. It must be good to excellent. I look at the credit rating on the load board I use and I check with RTScredit.com If they don't have good to excellent credit I don't do business with them no matter what kind of deal they offer, because obviously they don't always pay their bills if they don't have good credit.

Sometimes a broker will call me with a load that doesn't pay all that well. I'll ask questions. Sometimes there is no more money in the load...by itself. But I'll need a load after this one so I'll ask the broker if they have a load after this undesirable load. If averaging the two loads together the rate is good we have a win-win. But sometimes it doesn't work out and so I don't make a deal.

I always ask the broker what their needs are. Not just for this load, but in general too. I also ask if they can help me in situations like I described above. I also tell the broker my needs. Sometimes you both get a better deal as a result. I sometimes get calls from brokers asking if I'm in a certain area or when I will be next, because they know where I usually run. There is no sense in keeping that kind of information to yourself. Tell them what you're looking for. They're trying to move loads too.

When it comes to pricing and deciding the terms of a load(s), I always negotiate.

As far as how to do it, use the tools on the load board you use. If you don't know how to use them, learn. Remember what you were paid previously in a given lane (or look it up from your records before you call). You'll want to know what you were paid, by who, for what commodity and the weight. You should have an idea for the rate you want based on what you know before you call. When I call I ask for all the details about the load. I'll map out the route using something like Bing Maps to see the miles, estimated drive time, are their toll roads, are there cities to get around, hills or mountains, possible alternative routes and the difference in miles and drive time. I then check my calculations or if necessary make new calculations based on the new information about the load. Then I'll make an offer.

Sometimes the broker will counter your offer with a lower rate. When that happens I'll ask how close can they come to my offer (a counter offer to their counter offer). Or I may ask for something else. Maybe better detention pay (especially if I'm expecting detention). Or I might ask for altering some terms of a contract for this specific load. Maybe the master contract states I must make appointment times or pay a penalty, depending on the circumstances I may ask a broker to waive that penalty or I'll ask for better payment terms. Many times the broker/agent doesn't have the authority to waive a quick pay fee and they will say oh well it's only $20 for the quick pay anyway...well how about paying me $20 more for the load then?

Don't forget, when the fuel goes up to charge more. I had a broker ask me to do a load that I previously did for them. I asked for $50 more because my fuel costs have gone up. Initially they said no. A few hours later they called me back and accepted my offer. But sometimes they don't do this. So you have to be willing to walk away, but you have to make some money rather than no money too. So learn from every load you haul.

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Always negotiate when you can demonstrate added value to the customer. To say it another way you must be able to justify the additional cost as a benefit to them as well as you.

I feel that if you can't do this you might not want to waste your time or theirs.

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Milica Virag will be eternally grateful.
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