How to Balance Truck Shipping Costs and Service

Managing freight today means working under constant pressure. Truck shipping costs remain unpredictable, and service demands keep climbing. Freight must move on time, without damage, and without sending your budget off the rails.

Cutting freight costs too aggressively can backfire. Poor service leads to hidden charges, damaged shipments, and missed deadlines that cost you more in the long run. But overpaying doesn’t guarantee performance either.

In fact, 83% of shippers increased their transportation budgets year over year,  yet many still struggle with inconsistent service and escalating fees.

This guide is built for logistics decision-makers who oversee domestic trucking operations, full truckload freight, and LTL shipments. It covers the factors that drive freight costs, outlines the operational consequences of poor service, and delivers tactical strategies to reduce spend without sacrificing performance.

Every load matters. Every dollar counts. Here’s how to protect both.

What Impacts Truck Shipping Costs?

 

Freight costs rise and fall with the conditions behind the wheel and behind the scenes. Knowing where the money goes helps logistics leaders take control of what’s negotiable and plan around what’s not.

1. Fuel prices

Fuel remains one of the most unpredictable expenses in domestic trucking. Diesel price volatility, regional rate swings, and contract fuel surcharges all influence the cost per mile. 

Key fuel cost variables include:

• Fuel surcharge programs and how they’re applied
• Diesel cost fluctuations by region
• The impact of empty miles on fuel efficiency

2. Driver wages and labor

Driver recruitment and retention costs continue to climb. Carriers are raising wages and improving benefits to stay competitive, especially in high-volume lanes. Labor now ranks among the most significant operational expenses. 

Labor costs often increase due to:

• Driver shortages in key regions
• Rising compensation packages
• Compliance requirements like ELDs and HOS regulations

3. Maintenance and equipment

Undermaintained fleets increase the risk of delays and damaged freight. Older equipment drives up cost per mile. In recent reporting, total operating costs reached $2.26 per mile, with non-fuel costs climbing to $1.779. The highest ever recorded. Marginal costs increased by over 3% year over year. 

These trends show no sign of slowing. Maintenance planning and fleet reinvestment remain critical cost levers.

4. Insurance premiums

Insuring freight continues to get more expensive. Higher cargo values, legal risk, and broader liability are increasing insurance premiums across the industry. Carriers build this cost into their rate structures, especially for high-value or sensitive shipments.

5. Route and distance

Long-haul and low-density lanes drive up the cost of service. Rural deliveries, inconsistent volume, and repositioning trucks without freight all cut into efficiency.

Watch for:

• Deadhead miles after delivery
• Limited backhaul opportunities
• Destinations outside major freight corridors

6. Seasonality and demand

Rates rise quickly when seasonal volume increases or when disruptions hit. Agricultural harvests, holiday surges, and severe weather all tighten capacity and raise cost pressure.

Typical seasonal drivers include:

• Fourth-quarter retail demand
• Produce shipping in the summer months
• Winter storms and cold-chain precautions

Dry van spot rates often range between $2.00 and $2.50 per mile, while contract rates can exceed $2.35 depending on market tightness. 

7. Equipment financing and depreciation

Many carriers build truck lease payments, equipment purchases, and depreciation costs into their rates. Newer trucks improve efficiency, but acquiring them adds a capital burden. Older fleets may cost less upfront but require more maintenance over time. These trade-offs show up in how carriers price your freight.

8. Shipment characteristics

The size, weight, and type of freight directly affect cost. Heavier loads reduce fuel efficiency and may require special permits or equipment. High freight classes, fragile products, and regulated goods carry additional handling or packaging requirements.

Factors that increase truck shipping costs include:

• Oversized or overweight cargo
• Hazardous, refrigerated, or fragile freight
• Inefficient trailer utilization
• Need for flatbed, reefer, or specialized trailers

9. External pressures and congestion

Rates are also impacted by what happens outside your operation. Port congestion, urban traffic, and warehouse delays reduce efficiency and increase total transit time. External shocks like fuel price spikes, labor strikes, and geopolitical instability raise costs unpredictably.

External factors to monitor:

• Port or intermodal bottlenecks
• Regional congestion at pickup or delivery
• Economic shifts affecting supply chain inputs

What Really Happens When You Cut Trucking Costs Too Far

 

Cost-driven decisions can create bigger problems when service takes a hit. The consequences aren’t always immediate, but they build up fast and show up where it hurts most: margins, reputation, and operations.

1. Freight damage and claims

When carriers operate with outdated equipment or skip training, freight suffers. Improper loading and handling lead to broken products, rejected deliveries, and time lost managing claims. Because of this, high-damage carriers often offset their low base rates with volume.

Common damage-related costs include:

• Freight claims and reimbursements
• Customer service time spent managing resolutions
• Restocking, repacking, or reordering materials
• Lost margin from rejected or returned goods

2. Delivery delays and transit disruptions

Inconsistent service means missed delivery windows and missed commitments. Cheap freight options often lack the systems or staff to stay on schedule. Delays ripple through production, throw off inventory levels, and result in customer churn. Missed SLAs put pressure on every downstream function.

Delays directly impact:

• Production schedules and assembly lines
• Just-in-time inventory systems
• Time-sensitive product launches or promotions
• Customer satisfaction and fulfillment SLAs

3. Hidden costs and surcharges

Attractive rates lose their value when they come with surprise charges. Without proactive account management, these fees slip through and impact budget forecasting.

Common hidden charges include:

• Fuel surcharges beyond the quoted rate
• Layover or driver wait-time fees
• Reclassification or reweigh adjustments
• Liftgate, inside delivery, or appointment fees

4. Poor communication and tracking

Real-time updates matter. When providers rely on manual tracking, visibility breaks down. Teams can’t respond to issues, reroute freight, or manage exceptions. Communication gaps lead to reships, escalations, and wasted internal resources.

Impact of poor tracking:

• Inability to proactively inform stakeholders
• Late escalations or missed service windows
• No documentation trail for disputes
• Uncertainty about location or ETA

5. Brand damage and lost sales

Missed or damaged shipments have evolved into full on customer experience failures. Order accuracy and delivery reliability are tied to buyer loyalty. Late or broken deliveries mean more returns, lost reorders, and negative reviews. Brand equity suffers every time a promise is broken.

Consequences of failed delivery experiences:

• Negative customer reviews
• Declining reorder rates
• Increased churn and return costs
• Eroded buyer trust in your service promise

6. Long-term operational risks

Some low-cost providers underinvest in safety, training, and compliance. That creates exposure—accidents, missed audits, and legal action. These risks often lead to emergency freight spend to fix problems, escalating your true freight costs well beyond the original quote. 

Long-term risks from low-quality carriers include:

• Increased exposure to FMCSA violations
• Higher legal and insurance liability
• Costly emergency freight to recover failed shipments
• Risk to warehouse and dock workflows

Tactical Strategies to Lower Freight Costs Without Sacrificing Service

 

Cutting cost and cutting corners are not the same thing. A strong procurement strategy protects your margin and keeps your operation moving. That means reducing freight costs without exposing your business to service breakdowns, missed deadlines, or damaged freight.

Here’s how logistics teams can secure better rates and performance from carriers and 3PLs, without trading one for the other:

Criteria	Why It Matters	Tactical Move
Multiple Competitive Quotes	Creates rate pressure and reveals market trends	Bid out every lane—no assumptions
Accessorial Fee Analysis	Prevents margin erosion from hidden charges	Scrutinize extras—negotiate or remove
Volume Leverage	Unlocks preferential pricing	Commit volume where possible to secure discounts
Service Flexibility	Expands carrier pool and lowers costs	Offer flexible pickup/delivery windows
Performance History	Reduces risk of service failures	Request OTD %, claims ratio, exception data
Technology Stack	Enhances visibility and control	Prioritize partners with live tracking & TMS access
Customer References	Validates promises with real-world results	Ask for shipper testimonials and ratings
Contract Terms	Protects against rate volatility	Favor fixed or indexed rate structures

1. Quote every lane, every time

Don’t settle for the first offer. Put competitive pressure to work by bidding out each lane. Even in tight markets, sourcing multiple quotes helps benchmark market cost and filter out unreliable providers. Aim for at least three qualified bids per lane. 

2. Itemize and eliminate accessorials

Unexpected charges inflate final freight costs. Liftgates, detention, reclassification, and residential delivery all add up. Make sure your providers surface all potential add-ons in advance—and negotiate them out when possible. Look for blanket waivers on recurring shipments to standard destinations.

Common accessorials to review:

• Fuel surcharge thresholds
• Layover or appointment fees
• Reweigh or NMFC reclassification
• After-hours or limited access delivery

3. Leverage volume and consistency

Committed volume creates pricing power. Carriers value predictability, especially in high-volume lanes. When you offer consistent freight (week to week or quarter to quarter), you’re more likely to earn lower rates and priority treatment.

Ways to create leverage:

• Recurring shipments on defined lanes
• Drop trailer programs
• Forecasted volumes tied to quarterly bids

4. Build in flexibility

Tight windows create tight margins. When shipments aren’t time-critical, give carriers more flexibility around pickup and delivery. This allows for better route optimization and fewer empty miles—both of which translate into lower freight costs.

Flexibility that supports lower pricing:

• 2–3 day pickup windows
• Off-peak delivery times
• “No-touch” freight where possible

5. Prioritize carrier relationships

Good providers reward good shippers. On-time payments, clean paperwork, and reliable freight go a long way. Building direct relationships gives you access to better support, more transparency, and room to negotiate.

Strong relationships often lead to:

• Loyalty-based rate incentives
• Faster response times during disruption
• Improved claims support and escalation paths

6. Use technology that improves visibility

If your 3PL or broker still operates without a transportation management system (TMS), you’re flying blind. Real-time tracking, rate benchmarking, and automated documentation reduce cost through better planning and fewer errors.

Technology to prioritize:

• TMS integration and load visibility
• Automated BOL and invoice processing
• Carrier performance dashboards

7. Run annual performance reviews

Use data (not gut feelings) to assess carrier value. On-time delivery rate, claim frequency, and communication quality should drive your next routing guide. Utilize carrier scorecards to identify and eliminate weak performers and consolidate with reliable partners.

Track KPIs like:

• On-time pickup and delivery percentage
• Claim ratio and resolution time
• Response time and tracking accuracy

Conclusion: Balance Freight Costs With Service You Can Count On

 

Freight spend is one of the largest line items in any supply chain, but the cheapest option rarely delivers long-term value. True savings come from balancing truck shipping costs with performance, avoiding the hidden charges, claims, and operational headaches that erode profit.

Domestic trucking is still a volatile market, with rates influenced by demand cycles, equipment costs, and external pressures. The shippers who win are those who manage cost drivers, hold partners accountable, and use data to steer procurement decisions.

At Kesco, we know that every load represents inventory, customer trust, and cash flow in motion. We help companies control freight costs without sacrificing reliability, visibility, or compliance.

Ready to protect your budget and improve service? Talk to our team and see how Kesco keeps domestic trucking moving with fewer surprises and stronger results.