Freight Cost Optimization: 18 Proven Strategies to Reduce Shipping Costs for Wholesale Businesses

Freight costs are a significant factor in wholesale profitability. With rising shipping expenses and complex logistics, optimizing your freight spending is essential to stay competitive.

This guide is designed for wholesale buyers, logistics managers, and procurement professionals looking to reduce costs and improve shipping efficiency. We’ll cover 18 actionable strategies to support your freight cost optimization efforts, from smarter packaging to negotiating better rates with carriers.

Plus, discover how VALO Vietnam can connect you with verified suppliers and provide tailored logistics solutions to optimize your freight costs.

What Is Freight Cost Optimization?

Freight cost optimization is the process of minimizing total shipping expenses by improving how goods are packed, shipped, and managed throughout the supply chain. It includes everything from choosing the right carriers and shipping modes to tightening up load planning and proactively managing rates and invoices.

It’s not about cutting corners, it’s about getting smarter with your freight decisions.

Why It’s Critical in Wholesale

In wholesale, you’re often dealing with large volumes, recurring orders, and long-term supplier relationships. That means even a 3–5% reduction in freight costs can translate into tens of thousands of dollars saved annually.

More importantly, optimized freight can improve:

Delivery reliability: fewer delays and missed time slots
Customer satisfaction: on-time arrivals and fewer damaged goods
Operational efficiency: less chaos and fire-fighting in logistics

If you’re ignoring freight optimization, you’re leaving money and opportunity on the table.

Main Challenges

Before you can fix the leaks, you have to know where they are. Here are the top freight cost pitfalls that plague wholesalers:

1. Poor Pallet and Container Utilization

Shipping partially filled pallets or containers wastes space, and space costs money. Many wholesalers don’t realize how much they overpay simply due to inefficient load planning.

2. Limited Access to Competitive Rates

Relying on one or two carriers without checking the market leaves you vulnerable to overpaying. Spot rates and seasonal fluctuations can offer big savings, if you’re watching.

3. Hidden Fees That Add Up

From detention fees and fuel surcharges to accessorials and residential delivery charges, hidden fees are everywhere. Many don’t show up until the invoice hits your inbox.

4. Inefficient Use of Transportation Management Systems (TMS)

Either you’re not using a TMS at all, or you’re underusing it. A well-implemented TMS can optimize routing, consolidate loads, automate rate shopping, and flag billing errors, but only if you’re leveraging its full capabilities.

III. 18 Actionable Strategies for Freight Cost Optimization

Finding ways to reduce freight costs isn’t about cutting corners, it’s about making smarter decisions at every stage of the shipping process. Whether you’re shipping pallet loads across the country or managing global supply chains, these freight cost optimization strategies can help you improve margins and operate more efficiently.

1. Minimize Dunnage and Packing Waste

Every extra inch of packaging costs you money, especially when you’re billed based on dimensional weight (DIM). Excess dunnage and oversized boxes lead to wasted space, higher volume-based charges, and sometimes even damage if the load isn’t secure.

What to do instead:

Use right-sized packaging tailored to your product dimensions
Swap bulky fillers for protective materials that add minimal volume
Redesign carton layouts to improve stacking and reduce dead space

This not only lowers your shipping costs but also improves pallet utilization and reduces damage claims, both of which boost your bottom line.

2. Consolidate Shipments to Reduce Frequency

Shipping partial loads multiple times a week adds up fast. In many cases, you’re paying for space you’re not using, whether it’s through LTL (Less-than-Truckload) or small parcel shipments.

What works better:

Consolidate orders into full truckload (FTL) or full container load (FCL) shipments
Plan weekly or biweekly outbound schedules instead of daily
Use a Transportation Management System (TMS) to help coordinate pickups and load grouping

By increasing shipment density, you reduce your cost-per-unit, gain leverage with carriers, and simplify receiving operations on the customer side.

3. Avoid Extra Waiting Charges

Also known as detention or dwell time fees, these charges hit when carriers are forced to wait too long at pickup or delivery locations. They’re often avoidable, but common.

How to avoid them:

Ensure your shipments are ready for loading at the scheduled time
Keep docks and warehouse staff aligned with carrier schedules
Provide clear access instructions to minimize onsite delays

Some companies lose thousands each year in unnecessary waiting fees. A few process tweaks can eliminate that waste and keep your freight bills clean.

4. Allow Flexible Delivery and Pickup Windows

Rigid pickup and delivery time slots can limit your carrier options and increase your costs, especially in tight freight markets.

Here’s why flexibility pays off:

Carriers can fit your load into optimized multi-stop routes
You get access to better rates because your load is easier to plan for
Missed delivery windows (and reattempt fees) become less likely

Whenever possible, give a larger delivery window, for example, “between 10 a.m. and 4 p.m.” instead of “exactly at noon.” It could knock 5–15% off your rate, especially for LTL and long-haul shipments.

5. Use INCOTERMS to Shift Cost and Risk Wisely

INCOTERMS (International Commercial Terms) define who’s responsible for freight costs, risks, and duties during international transactions. Choosing the wrong term can shift expensive responsibilities onto your business without realizing it.

Tips for using INCOTERMS strategically:

Understand common terms like FOB (Free on Board), CIF (Cost, Insurance, and Freight), and EXW (Ex Works)
Use EXW if you want full control of freight costs and carriers
Consider CIF or DDP if you’re the buyer and want delivery handled for you , but weigh the trade-offs in cost and visibility

Freight cost optimization starts with knowing where your responsibility begins and ends, and INCOTERMS are your first line of defense.

6. Track Shipments in Real Time

If you’re not tracking your shipments proactively, you’re reacting to problems instead of preventing them. Late pickups, delivery delays, and routing issues often come with added charges, and worse, unhappy customers.

Why real-time tracking matters:

Prevents demurrage and re-delivery charges
Gives you data to dispute incorrect billing
Allows better communication with customers and warehouse teams

Use tools that integrate with your TMS or ERP, or partner with carriers that offer live GPS tracking. It’s an easy way to avoid freight blind spots and boost accountability across the board.

7. Avoid Shipping During High-Demand Periods

Shipping costs spike during peak seasons, think Black Friday, Lunar New Year, or back-to-school season. Carrier capacity tightens, transit times slow, and accessorial fees creep in.

Here’s how to stay ahead of the curve:

Analyze historical freight data to predict seasonal trends
Plan large shipments before or after peak shipping windows
Use demand forecasting tools to shift non-urgent loads to off-peak weeks

Even a few days’ shift can make a noticeable difference in freight rates and reliability, especially if you’re moving large volumes.

8. Ensure Appropriate Transport Insurance

Over-insuring low-value products is a common way to waste money. On the flip side, under-insuring high-value or sensitive shipments could leave you exposed to major losses if something goes wrong.

What smart freight insurance looks like:

Match coverage levels to your actual risk exposure
Work with freight forwarders or 3PLs that offer flexible insurance plans
Always read the fine print: not all damages are covered under default carrier liability

Optimizing insurance coverage not only reduces cost but also ensures peace of mind, especially when shipping internationally or across long distances.

9. Involve Logistics in Product and Packaging Design

Many companies treat packaging as a branding or production decision, but forget that packaging design has a direct impact on freight cost.

Involve your logistics team early to:

Choose box sizes that fit standard pallet footprints
Reduce wasted space to avoid dimensional weight charges
Design stackable packaging that protects products and maximizes container use

This simple collaboration between departments can yield long-term cost reductions and fewer damages in transit.

10. Compare Spot Market vs. Contracted Rates

Contracted rates provide stability, but in soft markets, spot pricing can offer significantly better deals. If you’re not comparing the two, you might be leaving money on the table.

Best practices include:

Use a TMS or freight rate management tool to compare real-time quotes
Keep a mix of long-term carrier relationships and spot rate flexibility
Watch for volume surges or low-capacity periods when spot prices spike

By balancing spot and contract freight options, you gain pricing agility, and more negotiating power.

11. Improve Communication Between Teams

Internal miscommunication is a hidden freight killer. If your sales, purchasing, and logistics teams aren’t on the same page, you’re bound to encounter costly shipping errors, delays, and surprise charges, making freight cost optimization much harder to achieve.

Here’s how to fix that:

Create shared calendars for order fulfillment and shipment scheduling
Set clear SLAs (Service Level Agreements) between departments
Involve logistics in early purchasing discussions to coordinate lead times

When everyone works with real-time visibility, you reduce last-minute air shipments, warehouse overtime, and order fulfillment chaos.

12. Expand Your Carrier Network

Relying too heavily on one or two freight providers can drive your costs up, especially if their rates climb or their capacity drops.

Build a broader, more resilient network by:

Vetting regional carriers who may offer better rates for specific lanes
Leveraging digital freight platforms to access a wider carrier pool
Periodically rebidding contracts to keep prices competitive

More options mean more flexibility, and better leverage when negotiating volume discounts or navigating seasonal fluctuations.

13. Tap Into Freight Market Intelligence

You can’t optimize what you don’t understand. Staying up to date with freight trends gives you the knowledge to make smarter shipping decisions.

Ways to build your logistics IQ:

Subscribe to industry newsletters and freight benchmarking reports
Explore platforms like VALO Vietnam to connect with verified suppliers and compare logistics solutions, and check out our blog on sourcing for additional strategies to optimize your procurement and freight processes.
Use tools like DAT, Freightos, or Xeneta to track rate trends
Join LinkedIn groups or industry forums where logistics leaders share insights

This kind of market intelligence lets you anticipate rate changes, negotiate smarter, and avoid getting caught off guard by supply chain disruptions.

14. Use Specialized Carriers When Appropriate

When it comes to shipping, not all carriers are created equal. Some specialize in particular types of cargo, whether it’s temperature-sensitive goods, oversized items, or international shipments, while others may focus on specific routes or regions.

Why it’s beneficial:

Specialized carriers have the expertise to handle specific freight types, reducing the risk of damage or delays.
These carriers may offer tailored services such as temperature control, expedited delivery, or specific packaging options that improve the overall efficiency of your shipping process.

How to take advantage of this strategy:

Research carriers with a proven track record in your product category or destination lanes.
Use a logistics platform like VALO Vietnam to explore specialized carrier options and compare pricing and service levels.
Work closely with your logistics team or 3PL to identify which specialized carriers will provide the best value for your specific shipping needs.

By choosing the right carrier for your specific freight, you can improve delivery times, reduce risks, and lower your overall freight costs.

15. Use Freight Analytics to Find Operational Weaknesses

Freight analytics is the key to unlocking the full potential of your shipping operations. With the right data, you can identify inefficiencies and waste, streamline processes, and ultimately save money.

Why it’s important:

Freight analytics allows you to drill down into your shipping performance and analyze key metrics, such as cost per mile, time in transit, and carrier performance.
By identifying where costs are unnecessarily high or where service is lacking, you can take actionable steps to improve operations and reduce costs.

How to leverage freight analytics:

Use a Transportation Management System (TMS) or freight cost calculators to track and analyze shipments by lane, mode, and product.
Implement regular data reviews with your logistics team to pinpoint trends, inefficiencies, and hidden costs.
Stay updated on industry benchmarks to compare your performance with competitors and identify areas for improvement.

Freight analytics helps you make smarter, data-driven decisions that directly impact your bottom line, offering a clearer view of where to optimize.

16. Negotiate Volume Discounts with Carriers

If you’re regularly shipping large volumes, there’s a strong case for negotiating volume discounts with your carriers. By guaranteeing a certain level of business, you can secure lower rates and favorable contract terms, an effective move toward freight cost optimization.

Why it works:

Carriers value predictability and reliability, so they’re often willing to offer discounted rates to customers who can commit to consistent shipping volumes.
These discounts can significantly reduce your overall freight costs, especially if you ship high-frequency or bulk shipments.

How to make it work for you:

Analyze your shipping patterns to determine if you have enough regular volume to negotiate a discount.
Approach multiple carriers to compare offers and ensure you’re getting the best rate.
Work with your logistics manager or procurement team to structure volume agreements based on your shipping forecasts and needs.

By locking in lower rates through volume discounts, you can achieve long-term savings and maintain predictable costs in your shipping budget.

17. Use Freight Cost Calculators for Accurate Forecasting

Before making any shipping decision, it’s crucial to know how much it will cost. Freight cost calculators can help you forecast shipping expenses accurately, allowing you to make better decisions that align with your budget and landed cost goals.

Why it matters:

Freight cost calculators provide an easy way to compare shipping rates across carriers, modes of transport, and destinations.
They allow you to run projections based on your specific shipping parameters, helping you avoid surprises and make cost-effective choices.

How to utilize them:

Use freight cost calculators available from logistics providers or through digital platforms like VALO Vietnam to get real-time rate estimates.
Input your shipment details (weight, dimensions, destination, etc.) and compare different carriers or services.
Use these tools during the planning phase to choose the most cost-effective shipping options before committing to any carriers.

This simple step can save you from choosing less efficient or more expensive options and help you stick to your budget.

18. Choose the Right Mix of 3PLs and Direct Carriers

When it comes to managing freight, there’s no one-size-fits-all solution. Relying too heavily on third-party logistics (3PL) providers or going direct with carriers without considering both options could result in missed savings opportunities.

Why balance is key:

3PLs can offer advantages such as more flexible pricing, access to a larger network of carriers, and specialized services. However, they may come with additional fees for management and coordination.
Going direct with carriers can sometimes provide cost savings, especially if you’re shipping regularly to established routes. But, it may require more time and effort to manage.

How to find the best balance:

Evaluate your shipping needs based on factors like volume, frequency, and type of goods.
For high-volume or regular shipments, try negotiating directly with carriers for the best rates.
For more complex or less frequent shipments, partnering with a 3PL provider may offer more flexibility and value.

By striking the right balance between 3PLs and direct carriers, you’ll have the flexibility to optimize your shipping costs without sacrificing service quality or efficiency.

Optimize Your Freight Costs with VALO Vietnam

Freight cost optimization is essential for any business that relies on shipping as part of its supply chain. By leveraging the right strategies, such as using specialized carriers, analyzing freight data, negotiating volume discounts, and utilizing freight cost calculators, you can significantly reduce your shipping expenses and improve operational efficiency.

At VALO Vietnam, we understand that every shipment is unique, and the logistics solutions that work for one business may not suit another. Our platform connects you with trusted suppliers and provides tailored logistics solutions that align with your needs, helping you to optimize freight costs effectively.

Whether you need to negotiate better rates with carriers, track real-time shipments, or explore advanced freight market intelligence, VALO Vietnam offers the expertise to make smarter decisions for your business. Our cost-effective, transparent pricing structure ensures that you only pay a flat membership fee, no hidden commissions or additional costs.

Ready to take control of your freight spending and boost your supply chain efficiency? Contact VALO Vietnam today to explore personalized logistics solutions and start optimizing your freight costs now!