%201.svg){kind=small}
Latest posts
Download resources
Freight cost management: definition & important aspects for buyers
.jpeg)
Freight cost management in a nutshell:
Freight cost management comprises the systematic planning, control and optimization of all transport and shipping costs in the supply chain. For purchasing, this is an important lever for reducing costs, as freight costs often account for 5-15% of total procurement costs.
Example: A medium-sized company reduces its annual freight costs by 18% from 240,000 euros to 196,800 euros by consolidating deliveries from three to two deliveries per week and renegotiating transport contracts.
Contents
Introduction to freight cost management
What is freight cost management?
Freight cost management refers to the strategic planning, management and control of all costs associated with the transportation of goods. The aim is to optimize these costs, create transparency and at the same time ensure high delivery quality. This includes analyzing freight rates, selecting cost-efficient transport routes and means and negotiating with logistics service providers.
Core elements of freight cost management
Significance for purchasing
In purchasing, effective freight cost management makes a significant contribution to reducing overall costs and increasing competitiveness. By optimizing transport costs, companies can achieve considerable savings and improve their margins. It also enables better planning, reduces risks in the supply chain and strengthens relationships with logistics service providers.
Application of freight cost management
Efficient freight cost management involves analyzing existing transport costs and identifying potential savings. Significant cost savings can be achieved by comparing freight rates and negotiating with logistics service providers.
Calculation example
Initial situation:
A company sends 50 deliveries of 1,000 kg each from Berlin to Munich every month. The current freight forwarder charges €0.55 per kg.
Current monthly freight costs:
50 deliveries x 1,000 kg x 0.55 € = 27,500 €
Measure:
Negotiations with alternative carriers result in an offer of € 0.48 per kg with the same quality of service.
New monthly freight costs:
50 deliveries x 1,000 kg x 0.48 € = 24,000 €
Savings:
27,500 € - 24,000 € = 3,500 € per month
Annual savings:
3,500 € x 12 months = 42,000 €
This targeted measure in freight cost management enables the company to save €42,000 a year without compromising on delivery quality.
Evaluation and strategic findings
✓ Critical success factors
→ Data-based decision-making: systematic recording and analysis of freight rates, volumes and routes as a basis for negotiations
→ Supplier management: building strategic partnerships with logistics service providers for sustainable cost savings
→ Process optimization: Continuous review and adjustment of shipping strategies and consolidation options
⚠ Challenges and limitations
→ Market fluctuations: Volatile fuel prices and fluctuating transport capacities make long-term planning difficult
→ Service quality: balance between cost savings and delivery quality must be maintained
→ Data complexity: integration of different transport systems and carrier data requires a robust IT infrastructure
Future trends and implications:
"The digitalization of freight cost management is becoming a decisive competitive advantage."
→ AI-supported freight price optimization
→ Real-time tracking and dynamic route optimization
→ Sustainable transportation concepts (CO2 reduction)
→ Blockchain for transparent freight documentation
◆ Strategic recommendations for action
→ Implementation of a digital freight cost management system
→ Development of a consolidation strategy for shipments
→ Development of a systematic tender process for logistics services
Conclusion on freight cost management
Freight cost management is an essential component of successful corporate management and offers considerable savings potential. Through systematic analysis, digital solutions and strategic partnerships with logistics service providers, companies can significantly optimize their transport costs. Success lies in the balance between cost savings and service quality, supported by data-based decisions and future-oriented technologies. Continuous adaptation to market changes and new technological possibilities is essential for sustainable freight cost management.
