At what volume should I start negotiating?

200 packages per month is typically the threshold where carriers start offering meaningful discounts. Below that, use shipping aggregators like Pirate Ship or Shippo that provide pre-negotiated rates.

How much can I realistically save?

15-30% off list prices is common for moderate volume (500-2,000 packages/month). Higher volume can achieve 30-50% or more. The exact savings depend on your shipping profile and negotiating skill.

Should I hire a broker or negotiate myself?

For under 2,000 packages/month, negotiate yourself—you know your business best. Above 5,000/month, consultants may uncover savings that justify their fees (typically 20-30% of savings).

How long do carrier contracts last?

Typically 1-3 years. Shorter terms give flexibility but less discount. Longer terms provide better rates but less flexibility. Two-year terms often balance these factors.

What if I don't hit volume commitments?

Most contracts have consequences for missing volume: reduced discounts, penalty fees, or contract termination. Negotiate realistic commitments you're confident you can meet.

Can I negotiate mid-contract?

Yes, if circumstances change significantly (your volume grows substantially, carrier raises surcharges, service issues). Carriers prefer adjustments to losing accounts entirely.

How to Negotiate Better Shipping Rates with Carriers

You're paying list prices for shipping. So is everyone else who doesn't ask for better rates.

Carriers expect negotiation. Their published rates are starting points, not final prices. Yet most Shopify stores never negotiate—leaving thousands of dollars on the table annually.

This guide explains when you have negotiating leverage, what to ask for, and how to structure conversations that result in better rates.

When You Have Negotiating Leverage

Volume Thresholds

When carriers start listening:

Monthly Volume	Negotiation Power	Typical Discount
Under 100	Minimal	Use aggregators instead
100-199	Limited	5-10% possible
200-499	Moderate	10-20% achievable
500-999	Strong	15-25% common
1,000-4,999	Very strong	20-35% possible
5,000+	Maximum	30-50%+ with commitment

Other Leverage Points

Beyond volume, carriers value:

Factor	Why It Matters
Consistency	Predictable volume is easier to plan
Growth trajectory	Growing accounts get attention
Multi-year commitment	Reduces carrier acquisition costs
Density	High volume in specific regions
Low claims history	Less costly to service
Simple shipping profile	Easy products to handle

What to Negotiate

Base Rate Discounts

The headline number:

Starting Point	Target	How to Get There
List price	10-15% off	200+ packages/month
10-15% off	20-25% off	500+ packages/month
20-25% off	30-35% off	1,000+ packages/month
30-35% off	40%+ off	5,000+ packages/month + commitment

Important: Base rate discounts apply before surcharges, which add 15-25% back.

DIM Divisor

Often more valuable than base rate:

Standard Divisor	Negotiated Target	Impact
139 (FedEx/UPS)	150-166	8-20% lower DIM weight
139	175-200	26-44% lower DIM weight
139	250+ (rare)	80%+ lower DIM weight

For high-DIM products, negotiating the divisor is often more valuable than base rate discounts.

Residential Surcharges

The hidden cost for B2C:

Current	Negotiable To	Savings/Package
$5.50-6.50	$4.00-5.00	$1.00-2.00
$4.00-5.00	$2.50-3.50	$0.50-1.50
Full rate	50% discount	$2.75-3.25

Fuel Surcharges

Variable but negotiable:

Approach	How It Works
Cap	"Fuel surcharge will not exceed 12%"
Fixed discount	"15% off published fuel surcharge"
Bundled	Fuel included in base rate (rare)

Other Negotiable Elements

Element	What to Ask For
Additional handling	Waive or reduce for specific SKUs
Oversize fees	Adjusted thresholds or reduced rates
Pickup fees	Free scheduled pickups
Delivery area surcharges	Reduced or waived
Peak season surcharges	Capped or reduced
Minimum charges	Lower per-package minimum

Preparing for Negotiation

Data You Need

Compile before contacting carriers:

Data Point	Why It Matters
Monthly package volume	Establishes baseline leverage
Annual shipping spend	Shows total opportunity
Average package weight	Helps carriers assess fit
Average dimensions	DIM weight conversation
Zone distribution	Where you're shipping
Service mix	Ground vs express breakdown
Seasonal patterns	Volume consistency

Competitive Intelligence

Get quotes from multiple carriers:

Step	Action
1	Request quotes from UPS, FedEx, and regional carriers
2	Share your shipping profile honestly
3	Ask each for their best pricing
4	Document differences
5	Use as leverage in negotiation

Example: "FedEx offered 25% off base rates and a 166 DIM divisor. Can you match or beat that?"

Know Your Shipping Profile

Segment your shipments:

Segment	Key Metrics
By weight	% under 1 lb, 1-5 lbs, 5-20 lbs, 20+ lbs
By zone	% to zones 1-3, 4-5, 6-8
By service	% ground, express, overnight
By destination	% residential vs commercial
By package type	% boxes, mailers, irregular

The Negotiation Process

Step 1: Initial Contact

Who to contact:

Volume	Contact
200-500/month	Inside sales or account manager
500-2,000/month	Territory sales rep
2,000+/month	Strategic account manager

What to say:

"I'm evaluating shipping partners and would like to discuss volume pricing"
"We currently ship X packages monthly and are growing Y% annually"
"I'd like to understand what pricing you can offer"

Step 2: Present Your Profile

Share your data:

Information to Provide	Don't Share
Volume and growth	Your bottom-line budget
Shipping characteristics	Your urgency to decide
Current pain points	Competitor's exact offer (yet)
Service requirements	Willingness to compromise

Step 3: Receive Initial Offer

Evaluate the first offer:

Element	Questions to Ask
Base discount	What percentage off list?
DIM divisor	What divisor applies?
Surcharges	Which are discounted?
Minimums	What's the per-package minimum?
Contract term	How long is commitment?
Volume commitment	What volume is required?

First offers are rarely best offers. Carriers expect counter-proposals.

Step 4: Counter-Propose

Effective counter strategies:

Tactic	Example
Competitive pressure	"FedEx offered X. Can you match?"
Bundled ask	"If you can do X on base rate and Y on DIM divisor, we'll commit"
Volume commitment	"We'll guarantee Z packages monthly for better rates"
Term extension	"We'll sign 2 years for additional discount"

Step 5: Close and Document

Before signing:

Verify	Why
All discounts in writing	Verbal promises aren't binding
Effective dates	When does pricing start?
Volume requirements	What happens if you miss?
Rate review schedule	When can rates change?
Escalation clause	How much can rates increase annually?

Carrier-Specific Strategies

Negotiating with UPS

UPS characteristics:

Strength	Leverage Point
Strong B2B network	Emphasize commercial addresses
Flexible negotiation	Often matches competitors
Technology integration	Mention Shopify integration needs

UPS negotiation tips:

UPS is often willing to match or beat FedEx quotes
Ground shipping is most negotiable
Ask about SurePost for final-mile USPS delivery

Negotiating with FedEx

FedEx characteristics:

Strength	Leverage Point
Express expertise	Emphasize time-sensitive needs
Ground growth focus	They want ground volume
SmartPost option	Final-mile USPS delivery

FedEx negotiation tips:

FedEx Ground is aggressively priced to gain market share
SmartPost rates are often more negotiable than standard
Express discounts are harder to get than Ground

Negotiating with USPS

USPS doesn't negotiate directly, but:

Option	How It Works
Commercial Plus	Automatic discount at volume
Resellers	Pirate Ship, Shippo offer pre-negotiated rates
NSAs (rare)	Negotiated Service Agreements for very high volume

USPS access strategies:

Use Commercial Plus pricing through Shopify Shipping
Resellers like Pirate Ship provide competitive rates
USPS NSAs require 50,000+ packages annually

Regional Carriers

Often more flexible than national carriers:

Carrier	Coverage	Negotiation Approach
OnTrac	Western US	Direct contact, aggressive pricing
LSO	Texas region	Volume commitments
Spee-Dee	Upper Midwest	Relationship-based
Eastern Connection	Northeast	Regional density matters

Common Negotiation Mistakes

Mistake 1: Not Negotiating at All

Problem: Accepting list prices when discounts are available

Solution: Always ask. Carriers expect negotiation.

Mistake 2: Focusing Only on Base Rate

Problem: Ignoring surcharges that add 15-25% to bills

Solution: Negotiate the complete package: base rate, DIM divisor, and surcharges.

Mistake 3: No Competitive Quotes

Problem: Negotiating without leverage

Solution: Get quotes from 2-3 carriers before serious negotiation.

Mistake 4: Accepting First Offer

Problem: Leaving money on the table

Solution: Counter-propose. First offers have room built in.

Mistake 5: Verbal Agreements

Problem: Discounts not applied correctly

Solution: Get everything in writing. Review your first few invoices carefully.

Mistake 6: Ignoring Annual Reviews

Problem: Rates creep up over time

Solution: Calendar annual reviews. Re-negotiate or re-compete.

After Negotiation

Monitoring Your Rates

Verify you're getting negotiated rates:

Check	Frequency
Invoice vs contract rates	Weekly (first month)
Surcharge accuracy	Monthly
Weight/dimension audits	Quarterly
Total cost vs projection	Monthly

Preparing for Renewal

Start 90 days before contract expires:

Timeline	Action
90 days	Request competitive quotes
60 days	Begin negotiations
30 days	Finalize decision
15 days	Sign or switch

When to Switch Carriers

Consider switching if:

Scenario	Action
Rates increased >5% at renewal	Re-compete
Service degrading	Document issues, negotiate credit
Business needs changed	Reassess carrier fit
Better offer available	Use for leverage or switch