How to Reduce Freight Costs

Reducing freight costs is the single highest-impact initiative for most shipping managers. Transportation typically represents 5–10% of a company's total revenue, so even a 5% reduction translates to significant bottom-line savings. Here's a proven framework for bringing those costs down.

Audit Your Current Spend First

You can't reduce what you don't measure. Start by pulling 6–12 months of freight invoices and categorizing spend by lane, mode, carrier, and accessorial type. Look for patterns: lanes that consistently run above market rate, carriers with high accessorials, and shipments that could shift from FTL to consolidated LTL (or vice versa). A professional freight audit uncovers billing errors, duplicate charges, and rate inconsistencies that most shippers never catch.

Optimize Mode Selection

Many companies default to one mode out of habit. LTL shipments that weigh over 10,000 pounds are often cheaper as a volume LTL or partial truckload. Conversely, half-empty truckload shipments might consolidate into a single LTL. Intermodal is significantly cheaper than truckload for long-haul freight where transit time flexibility exists.

Consolidate and Optimize Routes

Freight consolidation — combining multiple LTL shipments into a single truckload or multi-stop load — can cut per-unit costs by 20–40%. Warehouse-to-warehouse pooling, milk-run routes, and zone-skipping strategies all reduce the per-shipment cost base.

Negotiate from Data, Not Gut Feel

Armed with audit data, renegotiate carrier contracts. Carriers respect shippers who know their numbers. Target the lanes where you have the most volume for deeper discounts, and benchmark your rates against the market using a TMS with real-time rate comparison. House of Freight's Cabo TMS gives you live rates across 100+ carriers so every shipment is priced at the market floor, not a padded tariff. Schedule a free freight audit to get started.