UPS Contract Audit & Negotiation Plan

Trigger: UPS contract coming up for renewal Estimated annual UPS spend: ~$3.6M+ (based on Q1 2026 IS — 50903 Outbound Freight $908K × 4)

Objective

1. Recover refunds on billing errors and service failures within the eligible window
2. Build a negotiation profile — know exactly what we're paying, where the waste is, and what leverage we have
3. Enter the contract negotiation armed with data, benchmarks, and specific targets

Data to Collect Before Starting

From UPS Billing Center (billing.ups.com)

• ☐ Export all available invoice history as CSV (target: 12 months, minimum: 6)
• ☐ Download any current rate/contract agreement documents on file
• ☐ Note current negotiated discount percentages by service type if visible

From Internal

• ☐ Q1 2026 Income Statement (already have — saved to plans)
• ☐ Any prior UPS negotiation correspondence or contract terms

Drop CSVs in: ~/Downloads/ — Claude will pick them up from there

Phase 1 — Billing Audit (Refund Recovery)

What to Look For

Service Failure Refunds (15-day filing window — only recent invoices eligible)

• Late deliveries on UPS guaranteed services (Ground, 2-Day Air, Next Day Air)
• UPS owes a full refund on any guaranteed service that missed the delivery commitment
• Check: promised delivery date vs. actual delivery date on each shipment

Billing Error Refunds (180-day window — up to 6 months recoverable)

• Dimensional weight overcharges — billed dim weight higher than actual
• Residential surcharge on commercial addresses
• Address correction charges that shouldn't have applied
• Duplicate charges (same tracking number billed twice)
• Wrong zone classification
• Incorrect weight (billed higher than actual)

Output

• Spreadsheet of refund-eligible shipments with: tracking number, invoice date, error type, estimated refund amount
• Total recoverable amount
• Filing instructions for each claim type (Cole files manually via UPS claims portal)

Phase 2 — Spend Profile (Negotiation Ammunition)

Analysis to Run

Volume breakdown:

• Total spend by month (seasonal pattern)
• Total packages by month
• Average revenue per package

Service mix:

• % Ground vs. 2-Day Air vs. Next Day Air vs. other
• Are we over-using air when ground would do?

Zone distribution:

• Packages and spend by zone (1–8)
• Identifies where to push hardest on zone-based discounts

Weight distribution:

• Average actual weight per shipment
• Average billed weight per shipment
• Gap = dim weight impact — key negotiation lever

Surcharge breakdown:

• Residential delivery surcharge total
• Fuel surcharge total
• Extended delivery area surcharge total
• Address correction total
• Other accessorial charges
• Surcharges as % of total spend — often 20-30% of the bill

Output

• One-page spend profile summary
• Surcharge concentration (tells us which line items to target in negotiation)
• Annualized spend projection to use as commitment number with UPS rep

Phase 3 — Negotiation Brief

Targets to Push For

Benchmarks to Reference

• At $3.6M+ annual spend, comparable accounts typically get 55-65% off published rates
• Dim divisor of 166 is achievable at this volume (UPS default is 139)
• Fuel surcharge caps are negotiable — push for a fixed % or a ceiling

Negotiation Posture

• Lead with annual commitment number ($3.6M+) — not monthly
• Show zone/weight profile — demonstrate you understand your own data
• Reference competitive alternatives (FedEx, regional carriers) even if not actively using them
• Ask for a pilot on any new terms before signing a multi-year lock-in

Phase 4 — Filing & Follow-Through

• ☐ Cole files refund claims via UPS claims portal (ups.com/claims)
• ☐ Track claim status — UPS typically responds in 7-10 business days
• ☐ Schedule UPS rep meeting armed with spend profile and negotiation brief
• ☐ Review any new contract terms against targets above before signing

Key Numbers (Reference)

10% improvement = ~$450K/year back.

Resume Protocol

When Cole drops CSV files in Downloads:

1. Read this plan
2. Load and inspect the CSV structure
3. Run Phase 1 (billing audit) first — time-sensitive refund window
4. Then Phase 2 (spend profile)
5. Then build Phase 3 (negotiation brief)