Freight costs are eating into profit margins like never before.

Lower shipping costs. Faster delivery. Every shipper wants both, but they usually get one or the other. Reduce expenses and velocity plummets. Increase speed and your costs skyrocket.

Here’s the thing…

You can actually have both. It just takes the right strategy.

Did you know companies are saving 15-30% on freight spend without increasing transit times by a single day? Here are the specific strategies they’re implementing to achieve this.

What’s inside this guide:

• Why Freight Costs Keep Climbing
• Smarter Mode Selection
• Customs Compliance: The Silent Cost Killer
• Smart Consolidation & Carrier Partnerships
• Technology That Cuts Waste

Why Freight Costs Keep Climbing

The freight industry is in a strange spot right now.

U.S. logistics expenses totaled $2.6 trillion in 2024, or roughly 8.8% of GDP. Ocean freight rates increased 93% year-over-year on some lanes. Despite remaining volatility in the Red Sea necessitating two-week diversions around the Cape of Good Hope, carriers are charging shippers more money for slower service.

But here’s what most businesses miss:

The base freight rate isn’t always where the money leaks… It’s all the sneaky fees that get piled on top!

• Detention and demurrage fees
• Customs holds and inspection charges
• Wrong-mode shipping decisions
• Missed consolidation opportunities
• Storage bills while waiting on paperwork

Fix those, and the savings show up fast.

Built into most freight budgets is 10-20% of pure waste. The waste isn’t apparent because it is hidden within dozens of shipments. Once you know where to look for it though, it is pretty easy to eliminate.

Smarter Mode Selection Saves Real Money

Choosing the right transportation mode is the single biggest lever for cutting freight costs.

The default mode of shipment for most shippers is trucking. It’s what most people think of because it seems easy. However, truck only freight is almost never the least expensive method of shipping for long haul lanes (typically over 500 miles). That’s why intermodal and 3pl services exist – transporting freight by rail for the long haul and relying only on trucks for the first and last mile. This can create significant savings for shippers and does not prolong transit times since rail is meant to run frequently on high volume lanes.

Here’s why intermodal works so well:

• Rail is roughly 3-4 times more fuel-efficient than trucking
• Fewer driver hours means lower labour costs
• Better for the environment (which matters for ESG reporting)
• More predictable schedules on long lanes

The drawback? Intermodal requires more planning in advance. After the routing is planned, though, it’s pretty much smooth sailing.

Customs Compliance: The Silent Cost Killer

Now for the part almost every business gets wrong.

One of the largest causes of surprise freight expenses comes from customs compliance. Nobody paying attention? It strikes hard. Delays at the border accrue fees like crazy:

• Storage fees per day
• Demurrage charges from carriers
• Missed delivery windows with customers
• Penalties and re-filing fees
• Lost revenue from stockouts

And here’s the kicker…

Paperwork errors are the number one reason shipments get held at customs. An HS code that didn’t get included. An incorrect declared value. A commercial invoice that doesn’t match the packing list. Any of these mistakes can tie up freight for days.

Good customs compliance means:

• Accurate HS code classification on every product
• Complete commercial invoices with matching documentation
• Timely ISF filings for U.S. imports (24 hours before loading)
• Proper Incoterms selection between buyer and seller
• Up-to-date records for audit purposes

Customs compliance is much less expensive if invested in early. Most shippers learn that AFTER spending big bucks.

Consolidate Shipments and Cut the Fluff

Small shipments are charged at higher rates than large shipments do. That is the nature of freight pricing.

Less-than-truckload (LTL) shipments, or shipping by parcel, are expensive on a per pound basis because carriers price based on capacity rather than actual weight. Consolidation is the practice of combining many small shipments into one truckload. Rather than paying five carriers to ship five pallets each, you pay one carrier to ship them all.

Ways to consolidate:

• Group shipments by destination region
• Delay non-urgent freight to build fuller loads
• Use pool distribution points
• Partner with other shippers on shared lanes

Effective consolidation can reduce costs by 20-25% without impacting delivery lead times. It’s all about intelligently determining which loads can be delayed one or two days and which can’t.

Build Real Carrier Relationships

Most shippers treat carriers like commodities.

They pursue lowest rate quote and hop carriers every quarter. That sounds like a smart strategy…Except it’s costing them more money. Carriers reward their best customers (those who provide consistent volume and treat them right) with better rates and priority capacity.

Strong carrier partnerships mean:

• Better rates through volume commitments
• Priority capacity during peak seasons
• Faster problem resolution when issues arise
• More flexibility on delivery windows
• Preferred lane pricing

View carriers as partners instead of vendors. Just changing that perspective can reduce freight spend significantly.

Use Technology to Cut the Waste

Technology has changed how smart shippers manage freight.

Manual freight booking involved phone calls, spreadsheets and physical rate sheets. Today we have TMS technology to automate freight booking. Quality freight software will:

• Comparing rates across dozens of carriers instantly
• Optimizing routes based on real-time conditions
• Tracking shipments end-to-end
• Flagging exceptions before they become problems
• Generating reports to spot cost trends

The coolest part? TMS platforms these days don’t have to break the bank, even for smaller shippers. Some cloud-based platforms are available for less than the price of one additional logistics coordinator.

Bringing It All Together

Freight cost management is not about finding one silver bullet.

Incremental improvements in mode choice, customs compliance, consolidation, carrier relations and technology. While each tactic may only provide a few points of savings … the cumulative effect can reduce total freight spending by 15-30% without impacting (and maybe even improving) on-time delivery.

The winners are companies who treat freight like a strategic function, not a cost centre. Those who invest in getting customs compliance right. Those who form real partnerships with their carriers. And those who use the proper mix of modes for each lane.

Begin with baby steps. Choose one tactic from this list and execute it effectively. Then tackle the next item. Pretty soon freight will go from budget burden to competitive differentiator.