Most carriers have a guaranteed service refund. This means that if a package isn't delivered by the time your carrier promised, you're entitled to a refund. How convenient right?! It would be if this were something that was tracked automatically by the carrier. Unfortunately for you, it isn't.
Shipping carriers will honor their agreement as long as it's valid, but it is 100% up to you (the shipper) to review shipping invoices and submit errors to the carrier in order to receive a refund. It can be a pain, but auditing your parcel invoices to find valid refunds is necessary if you want to save the most on your shipping. So why would you agree to waive your rights to that?
Yearly Parcel Negotiation
To guarantee that you're getting the best deal on your shipping it's best to renegotiate your shipping contract every year. You never want to blindly sign something just because you've been happy with your current deal. Most carriers will have multiple changes to the contracts they send out based on things such as new legislature, increased tariffs, changing fuel costs etc.
There are countless factors that can affect the costs of shipping from year to year which carriers will always make adjustments for. So knowing this, never assume that you've been handed the same contract and blindly sign. Always read it thoroughly, especially the fine print, and always negotiate with your carrier.
Currently, many shipping carriers are adding GSR Wavers - a bit of language which waives your rights to refunds if you were to sign it. Know that you are under no obligation to agree to this and you never should.
Even if you doubt that anyone in your business will have the time to hunt down failed deliveries, jump through the hoops, and claim your refunds - you may decide to hire a parcel auditing company down the line and you'll need your rights and guarantees intact in order to benefit from them.
Surcharge discount changes are another item that you will want to be sure to look over. The language change will be the specified discount amount. It will normally be something similar to a dollar off or a percentage off. Always choose a percentage off since that percentage can continue to increase as time goes on.
Don't Let Simple Oversights Cost You
Even the most diligent business owner can have an "off day" and miss something that can cause financial loss. Let ShipSigma help you steer clear of shipping contract mistakes, help negotiate carrier contracts and locate money that you're owed. We have the experience to go head to head with the biggest and baddest of carriers and all of the data to back you up. Contact us today for a free evaluation to begin saving on your shipping costs.
Frequently Asked Questions About Yearly Carrier Contract Changes
What is a Guaranteed Service Refund?
A Guaranteed Service Refund is a carrier commitment to issue a refund when a package is not delivered within the promised delivery window. Carriers honor the agreement, but the shipper must review invoices and submit claims manually; refunds are not issued automatically. Auditing parcel invoices is required to recover money owed.
What is a GSR Waiver in a carrier contract?
A GSR Waiver is contract language that strips the shipper of the right to claim guaranteed service refunds. Carriers are adding this language to new contracts; signing it eliminates access to refunds for missed delivery commitments. Shippers are under no obligation to accept a GSR Waiver and should refuse it.
Should I waive guaranteed service refunds in my carrier contract?
No. Waiving guaranteed service refunds eliminates the right to claim money back when a carrier misses its delivery commitment, resulting in direct financial loss over time. Even businesses that do not audit invoices today should preserve their refund rights in case they engage a parcel auditing firm in the future.
How often should businesses renegotiate their shipping contracts?
Shipping contracts should be renegotiated every year. Carriers regularly update contract terms based on new legislation, tariff changes, and shifting costs, meaning a previously favorable agreement becomes less advantageous without notice. Never assume a renewed contract is identical to the prior year's version without reading it thoroughly.
Is a dollar-off or percentage-off discount better for surcharge reductions?
A percentage-off discount is better than a fixed dollar-off reduction for surcharge savings. As carrier rates increase over time, a percentage discount scales with the higher base rate and continues to produce proportionally larger savings. A fixed dollar amount stays static while the underlying surcharge grows.
