Shipping Contracts: Everything You Need to Know
Shipping contracts are documents that will clearly define a legal relationship between a client and their shipper. 3 min read
Shipping contracts are documents that will clearly define a legal relationship between a client and their shipper.
What Is an Ideal Shipper or Trucking Client?
When you own and operate a small business, there are several important issues that you must consider, including what constitutes your perfect client. For example, accepting every client that visits your business isn't a good idea, possibly interfering with your goal of long-term success. The better idea is to be very selective when picking your clients.
When looking for shipper or trucking clients you should keep these issues in mind:
- The business the client will bring to your company.
- How well they pay and how quickly.
- How easy they are to work with.
- If they value quality service and not just low prices.
While it may be impossible to find clients that fulfill every item on this list, you should be able to find people that meet the majority of your criteria if you are diligent.
One of the best ways to find work for your shipping or trucking company is working with load boards.
There is a great deal of competition for quality loads, as well as popular trucking routes, which can force you to price your service lower than you would like. Because you can only transport one load at a time, you will have to make frequent visits to the load board to find your next job. While load boards can be an invaluable resource for people just entering the trucking business, they aren't an effective way of finding long-term clients.
If you want your trucking company to succeed, you should invest in marketing materials such as merchandise with your company's phone number and logo. Distributing these materials will make it easy for potential clients to find your company.
How to Find Regular Trucking Clients
The best way to find trucking clients that will regularly give you loads is to directly contact shippers, either by phone or email. This method of securing clients is both effective and affordable. Unless you can be sure of a return on your investment, you shouldn't break the bank on advertising. Most ads, particularly those in magazines, are easy to ignore and typically won't bring new business to your trucking company.
Consider Working with the Government
Many people are surprised to learn that the United States government is the country's biggest shippers. In many cases, the government will outsource their shipping needs to small companies, providing you with a great opportunity to grow your business. The Postal Service, for example, commonly uses contractors to ship their freight. To find shipping jobs offered by the US government, you can visit FedBizOps.
Shipping Agreement Basics
Whether you're a company offering shipping services, or you need to find someone to help you ship your own goods, it's always a good idea to use a shipping agreement or shipping contract. These agreements can outline the relationship between a shipper and the client who needs goods shipped.
You should use a shipping agreement if:
- You need to hire someone to ship your products.
- You are a shipping company.
Shipping Contracts and Negotiating Deals
The most common reason for a company to renegotiate their shipping contract is they want more beneficial terms that are being offered to other companies. So, during negotiations, it's common for the client attempting to renegotiate their contract to use the contracts of other companies as a benchmark. The main goal of re-negotiation is typically getting lower shipping prices.
One of the most underused approaches when renegotiating shipping contracts is comparing a company's shipping needs with the costs the carrier must cover to meet those needs. For example, with a Cost Model Approach, the company attempting to renegotiate their contract may be able to save a great deal of money.
The goal of contract negotiations should be making sure that both parties are benefiting from the contract. To accomplish this goal, using “total package” analysis is a good option. This method of model analysis considers factors such as a company's shipping needs, the typical costs of the carrier, and the current language of the agreement to determine if there is a way to renegotiate the contract that would be amenable to both sides.
If you need help understanding or writing shipping contracts, you can post your legal needs on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.