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National package delivery services are more willing than ever to negotiate pricing, e-retailer and cataloger Magellan’s says.
National package delivery services are more willing than ever to negotiate pricing, Steve Miskulin, director of distribution for e-retailer and cataloger Magellan’s International Travel Corp., tells InternetRetailer.com. “With consolidation they are all trying to build their business. Everybody’s hungry,” Miskulin says. “All of them are willing to negotiate.”
Miskulin attributes that hunger to the general state of the economy and to Wall Street’s demands for continued revenue growth.
He says Magellan’s is more than willing to take advantage of the situation. “If your outbound volume is significant enough, all carriers want a piece of that,” he says. While Miskulin will not reveal Magellan’s volume, he says, “It’s volume that any small-package carrier would want.” Thus they are open to negotiating and re-negotiating pricing deals, he says.
Magellan’s has used carriers’ new aggressiveness in pricing to switch providers and keep its costs in check. In the past year, it has switched from UPS to FedEx for overnight deliveries and from UPS to DHL for 2nd day deliveries, Miskulin says. He also notes that the U.S. Postal Service’s recent rate increase has pushed Magellan’s to a different carrier for packages over two pounds.
The cost of shipping is ultimately dictated by the consumer, Miskulin says. “Customers will be willing to pay only so much for freight charges,” he says. “We haven’t increased what we charge our customers so that puts even more pressure on me to contain freight costs.”