Logistics leaders are under pressure to cut costs while maintaining fast, reliable delivery. The challenge is to identify where waste hides, what drives overspending, and how to fix it without sacrificing customer experience.
That’s why understanding how to reduce freight costs must go beyond surface-level tactics and dive deep into operational strategy, technology, and execution.
This guide is designed to help enterprise shippers looking to modernize their operations. If you're ready to cut waste and increase margins, you’re in the right place.
Key highlights:
Freight costs refer to the total expense incurred when shipping goods from one location to another. These costs cover a range of components, including:
A complex web of variables drives shipping freight costs, such as:
Global market conditions add another layer of volatility. According to the UN Trade & Development (UNCTAD), freight costs have increased worldwide in the first half of 2024 due to unexpected disruptions in maritime routes and rising operational expenses, such as higher fuel prices.
For enterprise retailers, these expenses can account for a significant portion of total operating costs, and even minor inefficiencies can scale into millions of dollars in lost margin.
Freight costs are one of the most significant expenses in the ecommerce supply chain. Yet, many logistics teams are stuck managing these costs reactively, constrained by static rules, limited visibility, and outdated tools. Modern shippers take a different approach: using real-time data, automation, and intelligent decision-making to reduce spend while improving delivery performance.
Here are 19 modern ways to reduce freight costs, cut down shipping waste, and build a more efficient operation from click to delivery:
A clear, detailed understanding of your freight expenses is the foundation for any effective cost reduction strategy.
Start by breaking down total costs by mode, carrier, service level, and surcharge category. Compare freight shipping rates against contracted rates and track how costs vary by origin and destination. Look for patterns:
A thorough audit reveals where targeted improvements will have the biggest financial impact, setting the stage for smarter, more cost-efficient logistics operations.
Most retailers still rely on static shipping logic — like defaulting to 2-day air for every order or locking in carrier preferences that don’t keep up with real-world variables. These rigid rules often ignore key factors like fulfillment location, carrier cutoff times, and customer distance. The result? Teams overpay for faster shipping than necessary or choose slower methods that can’t meet delivery promises.
That’s where modern fulfillment technology steps in. Platforms like Shipium use dynamic rate shopping powered by real-time carrier modeling. Instead of comparing base rates alone, Shipium evaluates the fully-loaded cost of each shipment, factoring in surcharges, performance history, and time-in-transit reliability. That means you choose the most cost-effective option that still hits your delivery promise, every time.
Keep learning: How fully loaded rate shopping ensures maximum cost savings
Shippers with consistent volume often qualify for more favorable carrier pricing. Regularly benchmarking your shipping data against carrier performance gives you the leverage to secure lower rates or accessorial discounts.
Come to the table with evidence of your reliability, growth trajectory, or consolidation opportunities, and carriers are more likely to offer terms that reduce freight costs.
Learn how to effectively negotiate carrier rates.
Shipping multiple packages to the same customer, often from different locations or at different times, can quietly erode profit margins. Fragmented fulfillment leads to redundant freight charges, excess packaging, and increased labor costs.
Modern tools can solve this issue by using real-time order intelligence to determine when it makes sense to hold, group, or reroute items for shipment consolidation. By making these decisions dynamically, operations teams reduce shipment volume and avoid unnecessary spend that chips away at the bottom line.
Split shipments occur when a single order is fulfilled from multiple locations, often due to inventory mismatches or rigid, rule-based routing. This issue increases touchpoints, adds packaging waste, and drives up total freight cost, especially when items are shipped from distant nodes with no strategic alignment between origin and destination.
Innovative fulfillment systems address this by routing orders based on real-time inventory availability, delivery promises, and overall network efficiency. Rather than defaulting to the nearest facility for each SKU, smarter logic evaluates which node can fulfill the order within the delivery window.
Inaccurate load planning leads to underfilled trailers, excessive trips, and unexpected freight fees. These inefficiencies waste truckload space and trigger costly accessorial charges that businesses often miss in budgeting.
The impact adds up fast. According to Flock Freight, companies with more than $3 billion in revenue spent an average of $2.3 million annually on unexpected less-than-truckload (LTL) accessorial fees, including charges for reweighs, reclasses, and overlength freight. Much of that spend stems from poor utilization of trailer space and inconsistent shipment profiles.
By using historical data and predictive analytics, shippers can better forecast volume, improve load consolidation, and reduce freight costs at scale.
Carrier contracts often include rate tiers or volume thresholds that, when exceeded, trigger higher freight shipping costs or reduced service levels. Without real-time monitoring, it’s easy to exceed contracted thresholds, triggering rate hikes, surcharges, and losing leverage in carrier negotiations.
Modern transportation management systems (TMS) give operators visibility into contracted volume caps and enable dynamic allocation rules to help manage them. By proactively setting capacity and volume limits, logistics teams can balance load distribution across carriers, avoid penalties, and keep freight spend predictable.
Retailers that rely on legacy shipping technology often face lengthy delays when changing carriers. Integrations can take weeks or even months, tying up IT resources and preventing the business from responding to service failures or increases in their freight shipping cost.
Shipium’s platform eliminates these delays with a modular, API-first infrastructure that enables rapid activation of new carriers. Operators can update routing logic and deploy carrier changes in a matter of hours, without disrupting core logistics operations.
The ability to switch carriers quickly gives logistics leaders the agility to adapt to cost pressures, negotiate better rates, and expand into new delivery zones, ensuring cost containment and continuity at scale.
Keep learning: Key strategies when adding a new carrier
Inbound shipping is often overlooked as a contributor to businesses’ overall freight expenses. Work with suppliers to:
Even small changes, like adjusting order cadence or using vendor-managed inventory (VMI), can reduce receiving bottlenecks and cut costs across the supply chain.
Packaging decisions directly impact the freight cost for shipping, especially under DIM pricing models used by most parcel carriers. Oversized or inefficient packaging inflates the billable weight of a shipment, drives up per-order freight charges, and wastes valuable trailer space.
According to The Logistics Trend Report, packaging is often 40% too large for its contents, leading to excess void fill, underutilized space, and more vehicles than necessary on the road.
Right-sizing packaging — whether through better cartonization logic, modular packaging design, or dynamic boxing strategies — can drastically reduce dimensional fees and improve trailer density. When applied at scale, optimizing packaging is one of the most cost-effective ways to reduce freight costs across your network.
Manual packing often results in suboptimal box selection, excess filler, and inflated dimensional weight, increasing freight charges and reducing efficiency.
Automated packing lines optimize box selection in real time, using product dimensions and weight to minimize space and reduce material waste. By using this technology, you get a faster throughput, lower shipping costs, and fewer errors.
Freight costs are shaped by complex, interconnected decisions across your fulfillment network. Still, shippers make network changes — like adjusting service-level agreements (SLAs), adding carriers, or shifting inventory — without fully understanding their cost and service implications.
Shipium Simulation enables operations and planning teams to model these variables using real order data and carrier constraints. You can test potential changes before executing them, comparing scenarios side-by-side to identify the most cost-effective approach. Whether you're evaluating a new distribution center (DC) location, a revised carrier mix, or zone-to-SLA mappings, simulation provides clarity on the true cost impact.
National freight carriers offer broad coverage, but they aren’t always the most cost-effective option for last-mile delivery, particularly in high-density or hard-to-reach geographic zones. Regional carriers often provide more competitive rates, flexible service levels, and better performance in their specific areas.
By adding regional partners to your carrier mix, you can lower surcharges and improve delivery efficiency, routing shipments more intelligently and mitigating national carriers’ rate hikes or capacity constraints.
Shipping orders from suboptimal fulfillment nodes often means packages travel longer distances than necessary, resulting in higher zone-based pricing, longer delivery times, and increased carbon emissions.
By optimizing inventory placement and aligning fulfillment decisions with demand patterns, shippers can minimize transit zones and reduce freight costs. Shorter routes mean fewer miles, lower fuel charges, and faster delivery, without sacrificing reliability.
When customers are only offered one shipping speed, typically the fastest, businesses often end up paying more freight shipping charges than necessary. Not every order needs to arrive in two days, but without options, you're locked into high-cost service levels regardless of actual urgency.
Providing different ecommerce shipping options at checkout — like economy, consolidated, or eco-friendly shipping — allows customers to select based on their priorities. Many shoppers are willing to trade speed for lower costs or sustainability, especially when those benefits are clearly communicated. This flexibility helps reduce freight costs while maintaining a strong customer experience.
When packages go off course, ecommerce shipping delays often aren't caught if you don’t have real-time visibility into your shipments, resulting in higher freight costs and missed SLAs.
Real-time tracking provides the transparency needed to stay ahead of issues. By monitoring shipments across carriers and modes, you can proactively address delays, reroute as needed, and keep customers informed. Early intervention reduces the operational and financial impact of disruptions, helping maintain delivery performance and control costs.
See how Shipium’s shipment tracking API helps you prevent delays and reduce freight operational costs.
The more you understand your historical trends, the easier it is to save on freight expenses going forward.
A consistent freight cost analysis isolates key spend drivers, such as inefficient carrier mix, excessive accessorials, or underperforming fulfillment nodes. With the right shipping analytics tools, you can make proactive, data-driven decisions that reduce waste and improve cost efficiency.
Shipium gives logistics teams real-time access to advanced analytics that show rate shop volume, cost-per-package trends, and other metrics. By surfacing patterns across time, modes, and carriers, our platform helps operators monitor performance, identify inefficiencies, and make more informed decisions that drive cost control across the network.
Carrier invoices often present discrepancies between expected charges and actual billing. Manual reconciliation processes are slow and error-prone, causing overpayments, delayed insights, and missed recovery opportunities.
Automating invoice validation lets you compare billed charges against contracted rates and shipment-level data in real time, ensuring faster dispute resolution and reducing financial leakage.
Shipium’s Billing Management provides visibility into fully loaded expected costs at the time of shipment. This upstream clarity makes it easier to detect variances when reconciling invoices, supporting a more efficient and accountable billing process.
Disconnected systems create delays, data silos, and inconsistent decisions across fulfillment, shipping, and post-purchase workflows. Using a centralized platform to connect and orchestrate your fulfillment stack ensures real-time visibility, better automation, and consistent rule enforcement across every shipment.
Shipium’s integration framework connects to your frontend systems and backend platforms to provide real-time orchestration between routing, carrier selection, label generation, and delivery tracking. This system-wide coordination enables faster execution, reduces manual effort, and improves control over freight costs at scale.
Freight savings and fast delivery are often seen as opposing goals. But with the right strategy and supply chain solutions, they reinforce each other. That’s especially true in high-volume, omnichannel operations where every cost decision compounds across millions of shipments.
Shipium enables this balance by replacing rigid, rules-based systems with data-driven, real-time decision-making. A recent enterprise customer — a Fortune 500 retailer with over 80 million annual shipments — used our platform’s Simulation capabilities to evaluate how their cost-per-package would change with smarter carrier selection, added fulfillment nodes, and dynamic time-in-transit modeling.
The results:
The takeaway is clear: smart freight cost reduction doesn’t sacrifice customer experience — it protects it. With the right platform, brands can unlock higher margins and faster delivery, simultaneously.
Freight shipping costs control is not a downstream problem, but a network-wide optimization challenge that begins at the moment of order routing. Shipium is purpose-built to address this complexity by connecting every part of the fulfillment stack with a unified platform that enables real-time, data-driven shipping decisions at scale.
Independent research from Nucleus confirmed what Shipium customers experience: measurable, repeatable savings, with an average 10% reduction in parcel spend, driven by improved carrier selection, real-time transit modeling, and better fulfillment logic.
And according to our internal benchmarks, some customers even saw 12%+ freight savings depending on pre-existing carrier diversity and network design.
Book a demo today to see how our modern shipping platform can help you reduce freight costs while maintaining delivery efficiency.