Transport Optimization

Consolidate shipments, choose modes by total cost and lead time, and fill trucks before sending them.

Time1 h
FormatSolo
StageDeliver

Transport Optimization: what it is and why it works

Transport optimization lowers freight cost per unit shipped by filling vehicles better, consolidating partial loads and choosing the transport mode on total cost rather than habit. It starts with a shipment-level audit: lanes, modes, weights, cubes, fill rates and invoices for a recent quarter. From there the levers are straightforward: combine less-than-truckload shipments into full truckloads or multi-stop routes, shift base volume to slower and cheaper modes such as intermodal or ocean, reserve premium modes for real emergencies, and use the lane data to renegotiate rates.

The method works because freight cost is driven far more by how vehicles are used than by the headline rate per mile. A truck that leaves two-thirds full costs nearly the same as a full one, so fill rate is the cleanest single indicator of waste. It beats a pure rate-tender exercise because it removes volume from the most expensive modes before negotiating. It depends on the footprint set by Network Design, and its mode and consolidation choices are also the main levers of a Green Supply Chain effort. OTIF Tracking keeps consolidation from quietly degrading on-time delivery.

What you need

Last quarter's shipment records with origin, destination, mode, weight, cube, pallet count and ship date
Freight invoices, accessorial charges and fuel surcharges by carrier
Customer delivery windows and order cut-off times
Trailer and container capacity data (pallet positions, weight limits)
Current carrier contracts and rate tables

What you get

Lane-level cost and fill-rate baseline
Consolidation rules such as ship days per lane and minimum load thresholds
Mode selection guidelines tied to urgency, value and lead time
Renegotiated or retendered carrier rates backed by lane data
A monthly freight review with fill rate and cost per unit as headline metrics

When to use it

When freight spend grows faster than volume and half-empty trucks are normal.

How to do it, step by step

Audit last quarter’s shipments: lanes, modes, fill rates, costs.
Consolidate: combine partial loads into full ones.
Match mode to need: air for emergencies, sea for base load.
Renegotiate with carriers using your lane-level data.
Set a monthly freight review with fill rate as the headline metric.

Worked example: Cutting LTL spend at a chemical packaging plant

Illustrative scenario — figures are realistic but not from a real company.

A plant filling industrial cleaning chemicals in drums and totes ships to about 120 distributors in the Midwest. Freight spend grew 18% in a year while volume grew 6%. Most orders shipped the day they were released, and 64% of shipments moved LTL.

The logistics lead pulled one quarter of shipment data and found average truckload fill of 71% by pallet position, and dozens of lanes with three or more LTL shipments a week to the same area.
She proposed fixed ship days for 14 dense lanes, grouping orders into multi-stop truckloads, with sales agreeing to a two-day delivery promise for standard orders.
Air and expedited ground were restricted to orders tagged as plant-down emergencies, approved by the customer service manager.
With consolidated lane volumes in hand, she retendered the top 20 lanes to four carriers.

Result. Within two quarters LTL share fell to 38%, average truckload fill rose to 89%, and freight cost per pound dropped about 14%. On-time delivery stayed flat because customers now knew their fixed delivery days. The lesson was that the biggest saving came from changing the shipping calendar, not from the rate tender.

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Common pitfalls and how to avoid them

Measuring fill rate by weight only.Track both weight and cube or pallet positions; light, bulky goods cube out long before they weigh out.
Consolidating without talking to sales and customers.Agree delivery-day patterns and lead times with customers first so consolidation does not show up as late orders.
Letting emergency modes become routine.Require a named approver and a reason code for every premium shipment, and review them monthly.
Negotiating rates before fixing load patterns.Consolidate first, then tender; carriers price stable, full, predictable loads better than scattered volume.

Frequently asked questions

What is a good truck fill rate?

It depends on product density and delivery constraints, but many shippers target 85% or more of usable capacity on full-truckload lanes, measured by the binding constraint, weight or cube. Trend matters more than an absolute benchmark: track fill rate per lane monthly and investigate lanes that sit well below your network average.

When should you ship LTL versus full truckload?

LTL fits small, irregular shipments where waiting to consolidate would break the delivery promise. Once a lane regularly sees shipments that together fill most of a trailer, full truckload or a multi-stop route is usually cheaper per unit. Compare the total cost, including handling and damage risk, not just the invoice line.

Does transport optimization hurt delivery service?

It can if consolidation delays orders without customers knowing. Done well, it often improves reliability, because fixed ship days and fewer handoffs make deliveries predictable. Track on-time-in-full alongside freight cost during the change, and set explicit rules for which orders bypass consolidation.