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What are the negotiation skills for purchasing transportation services?

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Negotiating transportation services can be challenging and complex, especially in today's dynamic and uncertain market. Whether you are a buyer or a seller of transportation services, you need to have effective negotiation skills to achieve your goals and build long-term relationships. In this article, we will discuss some of the key negotiation skills for purchasing transportation services, and how you can apply them in different scenarios.

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1 Know your objectives and alternatives

Before you enter any negotiation, you should have a clear idea of what you want to achieve, and what are your best alternative to a negotiated agreement (BATNA). Your objectives should be SMART: specific, measurable, achievable, realistic, and time-bound. Your alternatives should be based on your research and analysis of the market, your competitors, and your suppliers. Knowing your objectives and alternatives will help you to set your reservation price, which is the lowest or highest price that you are willing to accept or offer, and to avoid falling into the trap of anchoring, which is when you rely too much on the first piece of information that you receive.

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Vikash Anand

Chief Commercial Officer @ CMA CGM APAC | MBA, Ocean Freight
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One of the ways to get started is create a baseline of your objectives and identify the root issues/challenges you wish to address. This is not just the $$ value, but also about the service security you want to achieve

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2 Build rapport and trust

Negotiation is not only about numbers and contracts, but also about people and relationships. To negotiate effectively, you need to build rapport and trust with your counterpart, and show that you understand their needs and interests. You can do this by using active listening, asking open-ended questions, acknowledging their emotions, and finding common ground. Building rapport and trust will help you to create a positive atmosphere, reduce conflicts, and increase the chances of reaching a win-win outcome.

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3 Prepare and present your proposal

Once you have established rapport and trust, you can prepare and present your proposal for purchasing transportation services. Your proposal should be based on your objectives and alternatives, and include the following elements: the scope of services, the quality standards, the delivery terms, the payment terms, the risk allocation, and the price. You should present your proposal in a clear, concise, and confident manner, using facts and data to support your arguments. You should also anticipate and address any potential objections or questions that your counterpart may have, and show how your proposal benefits both parties.

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4 Bargain and exchange concessions

After presenting your proposal, you will enter the bargaining phase, where you and your counterpart will exchange offers and counteroffers, and make concessions to reach an agreement. Bargaining is a delicate process that requires skill and tact, as you need to balance between being assertive and cooperative, and avoid making too many or too few concessions. You can use different bargaining strategies, such as bracketing, which is when you make an offer that is higher or lower than your reservation price, and then move towards it gradually; or logrolling, which is when you trade off issues that are more important to you for issues that are less important to you. You should also keep track of the concessions that you make and receive, and ask for reciprocation or compensation when necessary.

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Gereon Hempel

Procurement & Supply Chain Consulting for Original Equipment Manufacturers and their suppliers in the US, Mexico and Germany.
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I think that you should never bargain. Be transparent about what you see in the market and about competitors pricing. In the best case you negotiate will all your partners and give them the same chance to improve the offered conditions. That way you are giving indications instead of targets, which can be a recipe for disappointment when a supplier reaches the target pricing but still doesn’t get the business because somebody else bid lower. Speak in probabilities and always know that this probably won’t be the last negotiation with your counterpart.

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5 Confirm and document the agreement

The final step of the negotiation process is to confirm and document the agreement that you have reached with your counterpart. You should summarize the main points of the agreement, and clarify any details or ambiguities that may remain. You should also express your appreciation and satisfaction, and reinforce the rapport and trust that you have built. You should then document the agreement in a written contract, that specifies the terms and conditions, the roles and responsibilities, and the dispute resolution mechanisms. You should also follow up with your counterpart, and monitor the implementation and performance of the agreement.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Thiago Litaiff

Especialista em Negocia??es, Direito Contratual, Empresarial e Advocacia Extrajudicial.
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Em 2022 criei um método cujo objetivo é ensinar a negociar e fechar os melhores contratos em 10 semanas ou menos, que possui base no método Harvard de negocia??o e na minha experiência profissional de mais de 10 anos de atua??o nesse segmento. Desse método nasceram duas técnicas fundamentais para potencializar a possibilidade do fechamento na hora de negociar: que s?o a Técnica da escuta atenta e a Técnica da comunica??o simplificada. Irei apresentar cada uma aqui em mais outros dois artigos, de modo simples, objetivo e usando uma linguagem de fácil compreens?o para que seja acessível ao máximo de pessoas possíveis.

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What are the negotiation skills for purchasing transportation services?

1

2

3

4

5

6

1 Know your objectives and alternatives

2 Build rapport and trust

3 Prepare and present your proposal

4 Bargain and exchange concessions

5 Confirm and document the agreement

6 Here’s what else to consider

Negotiation

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What are the negotiation skills for purchasing transportation services?

1

2

3

4

5

6

1 Know your objectives and alternatives

2 Build rapport and trust

3 Prepare and present your proposal

4 Bargain and exchange concessions

5 Confirm and document the agreement

6 Here’s what else to consider

Negotiation

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