If you’re in the logistics or e-commerce business, you’ve probably noticed freight costs creeping up. Fuel prices, carrier fees, and supply chain disruptions have made shipping more expensive.
According to a report by FreightWaves, transportation costs have risen by over 20% in the past few years, squeezing business margins and making it harder to stay competitive.
But the real challenge is reducing freight costs without sacrificing quality or delivery speed.
Cutting corners can lead to damaged goods, late shipments, and unhappy customers, problems that can be even more expensive in the long run.
The good news is that with the right strategies, you can lower your shipping expenses while maintaining efficiency. By optimizing routes, negotiating better carrier rates, leveraging technology, and improving packaging, you can significantly cut costs without disrupting your supply chain.
In this guide, we’ll walk you through practical, proven methods to help you achieve that balance, ensuring you stay profitable while keeping customers happy.
Understanding Freight Costs
Before reducing freight costs, you need to understand what drives them.
Freight charges aren’t just about getting a package from Point A to Point B. They’re made up of several moving parts, each with the potential to drive up your shipping bill if left unmanaged.
The total cost of freight usually includes linehaul charges (the basic cost of transporting goods over a distance), fuel surcharges, accessorial fees (for things like liftgate use or delivery appointments), and sometimes tariffs or customs duties for cross-border shipments. These can vary depending on the carrier, shipment type, and destination.
Distance, weight, and volume play a major role in calculating shipping rates.
The farther and heavier your load, the more you’ll pay.
But there’s a hidden cost many businesses overlook. Dimensional weight pricing. This means carriers charge based not just on weight, but on how much space your shipment takes up in the truck. If your packaging is too bulky or has a lot of space, you could be paying more than necessary.
Another major driver of costs is inconsistent shipping practices.
According to Freightos, almost 50% of additional shipping charges after booking come from inaccurate weight estimates, general rate increases (GRIs), and improper documentation. If you’re not careful, these unexpected charges can chip away at your profit margins.
Market forces also matter.
High fuel prices, labor shortages, and global events like the pandemic or geopolitical conflicts can increase freight rates across the board.
Carriers may raise rates during peak seasons or when capacity is tight, making it more expensive to ship, even for regular routes.
Understanding these cost drivers is key to identifying where you’re overspending. Once you know what you’re paying for and why, you’ll control those expenses without slowing down your deliveries or compromising on service quality.
Strategies to Reduce Freight Costs (Without Slowing Down Your Deliveries)
Reducing freight costs doesn’t mean you have to compromise on speed or customer experience.
In fact, most cost-saving opportunities come from improving your logistics efficiency and not cutting corners.
Here are the most effective strategies to lower your shipping costs while keeping your operations smooth.
1. Optimize Your Shipping Routes and Modes
One of the fastest ways to lower freight spend is by re-evaluating your shipping routes and modes of transport. Many companies unknowingly stick to outdated shipping patterns that no longer make sense given fuel prices or carrier rate changes.
Route optimization software or a Transportation Management System (TMS) can help you choose the most cost-effective routes in real time. Some platforms even factor in weather, traffic, and fuel efficiency.
According to ARC Advisory Group, companies that use a TMS save an average of 8% on freight costs due to improved routing and carrier selection.
Pro tip: Consider shifting from air to ground or from LTL (Less-than-Truckload) to FTL (Full Truckload) when volumes allow. It may slow delivery by a day but significantly reduce costs.
2. Consolidate Shipments Whenever Possible
Shipping small loads frequently adds up fast.
Consolidating shipments by either combining multiple smaller loads into one larger shipment or coordinating deliveries with nearby partners can dramatically lower per-unit costs.
If you’re shipping to the same region multiple times a week, consider batching those orders and negotiating for full truckload (FTL) pricing.
Flexibility with delivery dates, even by 24 hours, can often make consolidation possible.
3. Negotiate Better Rates With Carriers
Carrier rates aren’t fixed.
If you’re consistently shipping with the same providers, you have leverage. Don’t be afraid to negotiate discounts based on volume, long-term commitment, or flexibility in delivery times.
Get quotes from multiple carriers, even regional or niche ones, and use those numbers to open discussions with your current providers.
Consider working with a 3PL (third-party logistics provider) that has existing relationships and better rate access due to volume.
A report from FreightWaves showed that companies using 3PLs saw a 7–12% average decrease in freight costs, thanks to better rates and route planning.
4. Rethink Packaging Dimensions and Materials
Most shippers focus on weight but forget about dimensional weight pricing, where you’re charged based on how much space your package takes up on a truck or plane. Oversized or poorly packed goods can cost significantly more to ship.
Switching to right-sized packaging, reducing empty space, or using lighter materials can cut costs without compromising protection. Tools like Fitshipper, PacD, or EcoCarton help brands optimize packaging at scale.
UPS and FedEx use DIM weight pricing for all ground and air shipments, meaning packaging inefficiencies directly impact your costs, even if your product is lightweight.
5. Automate Your Freight Auditing
Many businesses overpay for freight due to billing errors, duplicate charges, or incorrect classifications, and never notice.
According to Supply Chain Brain, companies using freight audits recover 1–5% of total freight spend annually in overcharges alone.
Freight auditing software reviews invoices in real time and flags discrepancies.
You can use automated audit tools or work with a freight audit service to recover overcharges.
6. Use Data to Forecast and Plan Ahead
Last-minute shipments cost more.
Planning and forecasting demand allows you to avoid rush fees, peak-season premiums, and limited carrier availability.
Use data from past shipping trends to predict busy seasons, common delays, and average costs.
This helps you book more efficiently, avoid bottlenecks, and lock in better rates. Flexibility on pickup and delivery windows, even by a day or two, can give carriers wiggle room and lower your costs.
7. Consider Zone Skipping and Regional Warehousing
If you frequently ship long distances to the same regions, zone skipping might help.
This is when you consolidate multiple packages into one truckload, ship it closer to the final delivery zone, then hand off to a local carrier like USPS or FedEx for the last mile. It reduces zone charges and speeds up delivery.
Alternatively, regional warehousing – storing inventory closer to your customers – can also reduce shipping distances and cut costs.
Now that you know the smartest ways to reduce freight costs, the next step is making sure your strategy doesn’t backfire.
In the next section, we’ll explain how to avoid common mistakes businesses make when cutting shipping expenses.
Mistakes to Avoid When Reducing Freight Costs
Cutting freight costs can be a smart move, but if done wrong, it can quickly backfire. Delayed shipments, damaged goods, and angry customers can end up costing far more than you save.
To avoid that trap, here are some of the most common mistakes businesses make when trying to lower shipping costs and how to sidestep them.
1. Prioritizing Cost Over Customer Experience
It’s tempting to go with the cheapest shipping option, but if it causes frequent delays, damages, or confusing tracking, you’ll end up paying for it in customer churn.
According to a Convey survey, 84% of shoppers say they won’t return to a brand after a poor delivery experience. That makes delivery performance a key part of your customer retention strategy.
Instead: Balance cost with reliability. Choose carriers with consistent performance and build in buffer time if you’re using a more economical method.
2. Switching Carriers Without Proper Vetting
Some companies jump to new carriers just for lower rates without checking their on-time performance, customer service, or claims resolution.
What you save upfront could be lost in missed deadlines, returns, or damaged freight.
Instead: Ask potential carriers for performance data, references, and case studies. Consider doing a trial run before making them your primary partner.
3. Underestimating the Impact of Packaging
Many shippers focus on carrier rates, but forget that inefficient or oversized packaging directly drives up costs due to dimensional weight pricing.
Oversized packages also lead to damaged goods, returns, and extra fees for space they didn’t actually need.
Instead: Review your most common packaging types. Use right-sized boxes and avoid excess padding or void fill. Tools like PacD and Fitshipper can help you optimize packaging at scale.
4. Cutting Corners on Freight Insurance
Freight insurance is often the first thing businesses cut when trying to save, but skipping it can be costly.
Basic carrier liability rarely covers the full value of your goods, and one damaged or lost shipment can undo months of savings.
Instead: Review your carrier’s coverage limits and consider additional insurance for high-value or fragile shipments. A small upfront cost can protect you from major losses
5. Ignoring Accessorial Charges
You may get a great base rate from your carrier, but accessorial charges like liftgate use, residential delivery, or detention fees can silently bloat your freight bill.
A DAT Freight & Analytics report found that accessorials can add 20%–30% to total shipment costs if unmanaged.
Instead: Understand which fees apply to your most common routes or loads. Negotiate predictable flat fees or switch to carriers who include accessorials in their base price.
6. Not Tracking KPIs After Cost Cuts
Cutting costs without tracking the impact is like flying blind. You might be saving on paper, but losing customers or damaging brand trust behind the scenes.
Instead: Monitor key freight KPIs like on-time delivery rate, claims rate, damage rate, and customer satisfaction. If cost savings hurt those numbers, it’s time to reassess.
Conclusion
Reducing freight costs doesn’t have to mean compromising on delivery speed or quality.
The key is understanding what you’re paying for and making smarter, data-driven decisions. In this post, we broke down how freight costs are structured, and shared practical strategies, from optimizing packaging to leveraging technology that can lower your spend while keeping operations strong.
But just as important as what you do is what you don’t do. The wrong cost-cutting move, like skipping insurance or switching carriers too quickly can backfire and eat into your savings.
If you’re serious about cutting freight costs without the usual trade-offs, avoid the common mistakes, track your KPIs, and take a long-term view of logistics efficiency. That’s how you build a supply chain that’s lean, reliable, and ready to scale.
If you’re ready to reduce freight costs without slowing down delivery or compromising quality, Flex Solutions is here to help. We work with businesses like yours to optimize shipping strategies, eliminate waste, and uncover smarter ways to save. Contact us to get started with a free consultation.
