To add some more fuel to the fire, we are now hearing rumblings that UPS and FedEx are telling their shipper customers they will not negotiate contract pricing with a shipper’s third party consultant. Even though this has been a practice for years. Many companies rely on these third party consultants because of their expertise in the field to negotiate unbiased and competitive contracts on their behalf with the parcel carriers. Some of the responses we have heard from the shipping public indicate that UPS and FedEx feel they can handle these negotiations more effectively because THEY have the shipper’s best interest at heart. In fact some sales representatives for these companies have put words to this effect in writing! Yeah right! That’s what the fox said when he suggested he would be best suited to watch the hen house. Imagine closing on a new home and your real estate agent stating you cannot use a lawyer to review the contract language before signing it because the sales agent obviously has the buyer’s best interest in mind! Or, imagine your primary care physician telling you he always has had your best interest in mind so he will perform the open heart surgery, no need to go to a heart surgeon!

While we jest here, there is a real problem when there is limited competition in the market place as in the case of UPS and FedEx. UPS and FedEx have apparently drawn a line in the sand. We must assume the decision to block out third party consultants in these negotiations was made independently of each other, at least we hope it was. Did you ever hear the term “restraint of trade”! We are pretty sure however that once one player knew the other’s position it was easy for them both to express to their customers that the shipper will no longer be allowed to seek advice from an industry expert for the betterment of its business! Well, what’s good for the goose is good for the gander. We know for a fact that UPS and FedEx both use consultants to help them run their business more efficiently and to help them improve profits, so what are the shippers … chopped liver!

With UPS and FedEx a duopoly in today’s parcel shipping world, taking this action will surely be tested by shippers and major shipper groups, perhaps even in the courts. It is time for shippers to stand up for their rights and let these carriers know that it’s the shipper’s business and the shipper will ultimately decide what is in their best interest, not the carriers. Stay tuned folks this is going to be interesting.

Tony Nuzio