The Hidden Costs of Chasing the Cheapest Carrier
August 19, 2025
Chasing the cheapest carrier often wipes out your savings. When you pick the lowest bid, extra fees, missed deliveries, and damage claims can push your costs above the base rate. You need to look deeper at total freight expense.
Apparent Savings Versus Reality
Many teams judge freight cost by base rate alone. In 2023, hidden fees added 18 percent to bills, says CSCMP. Carriers tack on detention, demurrage, and fuel charges that raise your landed costs. That low rate stops looking good once you add those fees.
Reliability Trade-Offs Revealed
Shippers who used the cheapest carriers saw on-time deliveries drop by 22 percent year over year. That forced teams to add 30 percent more safety stock in some sectors. When carriers miss schedules, you lose time and money. A Gartner report finds budget carriers deliver on time only 68 percent of the time, versus 92 percent for standard carriers.
Damage and Customer Trust
Shippers paid $16 billion for cargo damage in 2024. Processing claims and replacing goods eats into any rate gain. Seventy-five percent of customers say they lose trust after one bad delivery. Cheap rates don’t help if you lose customers.
Forecasting Disruption from Budget Carriers
Inconsistent carrier performance also disrupted demand forecasting. Indeed, forecast accuracy dropped by 15 percent when low-cost carriers were selected exclusively. Thus, operational planners were forced into reactionary replenishment. Meanwhile, emergency air shipments added exorbitant premiums, negating upfront savings.
Evaluate Carriers, Don’t Just Chase Price
Ultimately, freight cost must be assessed beyond base rates. Total landed cost, on-time performance, and damage rates must be factored into carrier selection. Consequently, a balanced approach yields true value and safeguards service levels. Only then will supply-chain decision-making align costs with reliability and customer expectations.
