How to Reduce Transportation Spend: A Shipper's Guide

Transportation spend — the total cost of moving goods through your supply chain — is one of the largest controllable expense categories for most companies. Reducing it requires a systematic approach, not one-off tactics. Here's a proven framework.

Step 1: Baseline Your Current Spend

Pull 12 months of freight data and categorize it by mode, carrier, lane, and accessorial type. Calculate your effective cost per mile, cost per pound, and cost per shipment. This baseline reveals where your money is going and where the biggest savings opportunities exist. You can't optimize what you can't see.

Step 2: Audit for Errors and Overcharges

Freight invoices contain errors 5–15% of the time. A thorough freight audit recovers overcharges and identifies systematic billing issues. This is the fastest ROI — recovered money that goes straight to the bottom line with zero operational changes.

Step 3: Optimize Mode and Carrier Mix

Many shippers use the wrong mode out of habit. Heavy LTL shipments may be cheaper as volume LTL or partial truckload. Half-empty truckloads might consolidate. Long-haul truckload could shift to intermodal. Additionally, no single carrier has the best rate on every lane — a multi-carrier strategy with real-time rate comparison ensures optimal pricing.

Step 4: Reduce Accessorials

Accessorials — liftgate, residential, detention, redelivery — add 15–40% to many shippers' base rates. Identify recurring accessorials and address the root cause: negotiate them into base rates, adjust pickup/delivery locations, or improve packaging and loading processes.

Step 5: Leverage Technology

A Transportation Management System (TMS) automates rate shopping, carrier selection, document management, and tracking. The right TMS reduces administrative overhead, ensures every shipment is booked at the best rate, and provides the data analytics needed for continuous improvement.

Step 6: Partner Strategically

Managing freight in-house means limited carrier relationships, manual processes, and no market-rate visibility. A strategic logistics partner like House of Freight brings Priority1's 47,000+ carrier network, the Cabo TMS platform, in-house customs brokerage, and freight bill auditing — all under one roof. Schedule a free freight audit to build your transportation spend reduction roadmap.