How to reduce transportation costs without losing quality: a guide for Logistics Directors
In the environment of global logistics operations, where thousands of shipments move between markets every day, achieving real transportation cost reduction requires more than just renegotiating rates. Manufacturers must look for scalable solutions that are resilient to supply chain volatility and capable of integrating with the global IT ecosystem.
The year 2025 has brought significant changes to the European road transport market. The industry has found itself at the intersection of rising operational costs, economic pressure, and regulatory uncertainty. Although freight rates dropped at the beginning of the year (contract rates by 2.3 points and spot rates by 3.8 points), increasing operating expenses related to insurance, fuel, road tolls, and driver shortages effectively limited potential savings. By mid-year, the situation had partially stabilized – rates increased and PMI indicators also improved.
In these conditions, the traditional approach to cost optimization is no longer sufficient. The growing complexity of operations requires tools that enable logistics management across multiple languages, currencies, customs systems, and tax frameworks.
Key strategies for reducing transportation costs
1. Route optimization and fleet management
Route planning. This is the foundation of effective transportation cost management. The use of advanced software can generate savings of several dozen percent of annual operating costs. Algorithms optimize not only distance but also costs, time, and vehicle utilization.
Carrier selection. Some logistics platforms available on the market automatically compare offers and choose the optimal option based on predefined criteria. Cost analysis plays a key role here, involving detailed reporting across various dimensions (route, carrier/forwarder, type of cargo).
The use of logistics management platforms and systems enables large-scale data analysis, especially predictive analytics—for example, demand forecasting and capacity planning. Moreover, machine learning algorithms can identify patterns invisible to traditional analysis, allowing for better transportation resource planning.
2. Intelligent capacity management
In large-scale international logistics operations involving thousands of shipments daily, capacity management and flexible response to demand fluctuations are of critical importance. Consolidation strategies remain one of the fundamental methods of optimization—they allow for better utilization of resources but at the same time generate the risk of delays, especially in complex supply chain structures.
This challenge is addressed by logistics platforms based on the carrier–capacity–connectivity model, such as CargoON. A key factor here is the ease of integrating these platforms with ERP, WMS, or TMS systems. They not only enable operational management but also make it possible to quickly onboard thousands of verified carriers into the ecosystem (in the case of CargoON, up to 20,000 transport companies). As a result, companies can respond instantly to changes in resource availability while maintaining full transparency and control over costs.
3. Process automation and digitalization
According to research by Nucleus Research, transportation and logistics management systems and platforms can reduce transportation costs by 15%, cut idle time costs by 47%, decrease fuel consumption by 12%, and improve shipment delivery times by 50%.
Moreover, such tools enable companies to achieve ROI levels of over 20% by:
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automatically planning loads and selecting carriers,
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providing real-time shipment visibility,
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improving freight audit and cost control,
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optimizing multimodal transportation strategies.
According to Gartner research, the average user can expect savings of 5–15% of annual freight costs through the implementation of a TMS.
4. Warehouse automation and robotics
The use of automation and robotics in warehouses provides several direct mechanisms for reducing transportation costs in manufacturing companies. In addition to the integration of WMS and TMS systems, the following factors significantly impact cost minimization:
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Automated loading and unloading. Devices such as automatic docks, conveyors, and loading robots shorten the time required to service a single vehicle. As a result, more operations can be carried out at a lower time cost, which translates into lower unit transportation costs (e.g., per pallet or square meter).
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Reduction of human errors during loading or unloading. Thanks to automated scanning and picking control, errors in packing and loading are minimized, which helps reduce complaints and minimize the number of re-deliveries (a major driver of additional transport costs).
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Shipment consolidation. Automated systems can analyze order data and combine deliveries from multiple orders into a single route. This enables manufacturers to quickly respond to cost increases and maintain tighter control over expenses.
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Deployment of autonomous vehicles in internal logistics. Although this mainly applies to in-plant transportation (e.g., AGVs), reducing the time required for loading preparation shortens overall transport operations. The result is higher utilization of the external fleet, ultimately translating into lower costs per shipment.
5. Diversifying Transportation Capacity Sources
The current market situation (with spot rates declining faster than contract rates) creates opportunities to optimize the mix of long-term contracts and the spot market. For shipments with predictable volumes, it is advisable to negotiate long-term contracts with price flexibility clauses. The spot market can be used for a portion of the volume, particularly during periods of declining demand.
Building long-term relationships with a network of carriers or freight forwarders can deliver benefits beyond pricing: priority service during high-demand periods, access to new technologies, and joint investments in optimization. However, this is not always the rule—shifting from long-term contracts to spot assignments may also contribute to transportation cost optimization.
One of the key tactics for reducing logistics costs is load sharing. This optimization allows for the use of cargo space through collaboration with other companies, especially those with geographically or temporally complementary freight flows.
4. Warehouse automation and robotics
The use of automation and robotics in warehouses provides several direct mechanisms for reducing transportation costs in manufacturing companies. In addition to the integration of WMS and TMS systems, the following factors significantly impact cost minimization:
-
Automated loading and unloading. Devices such as automatic docks, conveyors, and loading robots shorten the time required to service a single vehicle. As a result, more operations can be carried out at a lower time cost, which translates into lower unit transportation costs (e.g., per pallet or square meter).
-
Reduction of human errors during loading or unloading. Thanks to automated scanning and picking control, errors in packing and loading are minimized, which helps reduce complaints and minimize the number of re-deliveries (a major driver of additional transport costs).
-
Shipment consolidation. Automated systems can analyze order data and combine deliveries from multiple orders into a single route. This enables manufacturers to quickly respond to cost increases and maintain tighter control over expenses.
-
Deployment of autonomous vehicles in internal logistics. Although this mainly applies to in-plant transportation (e.g., AGVs), reducing the time required for loading preparation shortens overall transport operations. The result is higher utilization of the external fleet, ultimately translating into lower costs per shipment.
Logistics trends – what manufacturers should know
The world of logistics is changing faster than ever before, and manufacturing companies today face critical decisions that will define their competitive advantage for years to come. Automation, electromobility, and thoughtful transportation planning are no longer innovations but the new standard. What directions are dominating logistics, and what do they mean for manufacturing plants?
Electromobility and sustainable transport
The transformation of transport fleets toward electrification and automation is a response to rising fuel costs and environmental requirements. An increasing number of companies are investing in their own or contracted electric fleets, which not only reduce CO₂ emissions but also lower the cost per trip.
Modern systems supported by artificial intelligence make it possible to simulate entire logistics networks, forecasting consumption, delays, and optimizing route layouts. AI and predictive algorithms help minimize empty runs and plan deliveries in a way that maximizes load utilization while reducing emissions.
Regionalization and nearshoring
Manufacturing companies are increasingly choosing regional suppliers, shortening distances within the supply chain. This trend, known as regionalization or nearshoring, reduces transportation costs while also mitigating risks related to delays, tariffs, geopolitical crises, or instability in maritime freight.
Local supply chains mean shorter order fulfillment times, greater flexibility, and faster responses to market changes. They also present an opportunity to support the national economy and increase transparency in logistics processes.
Manufacturers have a wide range of strategies available to reduce transportation costs while maintaining high service quality. Key success factors include systematic investments in digital technologies, optimization of data-driven processes, and strategic management of relationships with logistics partners. The implementation of comprehensive TMS systems and logistics platforms, as well as the use of AI and automation, can deliver savings of several dozen percent in transportation costs. Equally important, however, is a holistic approach that combines technological investments with effective change management and continuous process improvement.
The ultimate goal of post-merger transport harmonization is to establish a dynamic carrier pooling model, enabling the corporate group to manage a shared fleet and transport resources across Europe. A key enabler here can be a digital twin of the logistics network—a virtual replica of the entire transport system that allows scenario simulation, risk forecasting, and more effective capacity planning.
M&A integration represents the ideal moment to launch a joint capacity exchange platform, functioning as an internal freight marketplace within the group. Such a model enhances flexibility while at the same time strengthening resilience against market disruptions.
Importantly, harmonization does not imply excessive centralization. Rather, it requires the implementation of dual-layer transport governance—a strategic macro layer (control, standardization, ESG) combined with local micro-level flexibility. This approach enables the design of logistics networks that are resilient to disruptions while preserving the advantages derived from local knowledge and relationships.
Technologies Supporting Integration in the European Environment
TMS Systems (Transport Management Systems)
Modern TMS platforms offer not only core functionalities such as route planning and carrier management, but also advanced capabilities for optimizing international routes. Their key advantage lies in the ability to optimize transport across the entire European network while simultaneously accounting for local specificities. These systems can analyze multiple combinations of routes, transport modes, and schedules, taking into consideration differences in driver working time regulations, weekend restrictions, fuel cost variations, as well as local holidays and non-working days.
Logistics Platforms
In the European environment, logistics platforms play a particularly important role by enabling digital integration with a wide ecosystem of carriers and logistics operators operating across different countries. The key advantage of such platforms is the ability to quickly access local carriers in new markets without the need to build business relationships from scratch.
For example, CargoON provides access to a network of 25,000 verified transport companies. The platform supports end-to-end transport digitalization—from freight management and tendering, through warehouse time-slot planning, to transport monitoring and real-time incident management. Users gain greater cost control, improved operational transparency, and enhanced collaboration with partners across Europe.
Data Integration
Transport operations require access to reliable real-time information. CargoON’s Visibility solution enables monitoring of vehicle locations across Europe, tracking of order execution, and real-time incident management. A critical element of this process is ensuring data quality and making it transparently available to all stakeholders—from logistics teams to customers and business partners.
Recommendations for Manufacturers
Checklist of Steps for Effective Harmonization of Transport Operations
1. Planning & Preparation Stage
- Conduct a comprehensive audit of transport operations in each country of operation, taking into account local regulations.
- Identify differences in road tolling systems, traffic restrictions, and low-emission zone requirements.
Analyze IT system compatibility, considering different languages, data formats, and communication standards. - Assess the supplier base in terms of their ability to handle cross-border operations and their knowledge of local markets.
2. Planning Phase
- Develop a target operating model for integrated transport operations that reflects the specific characteristics of each European market.
- Define common KPIs adapted to Europe’s diversity.
- Prepare an IT systems integration plan.
- Design a communication strategy for customers, suppliers, and employees in different European languages.
3. Implementation Phase
- Deploy projects that leverage immediate opportunities for international route optimization.
- Gradually integrate IT systems while maintaining local language support and operational continuity.
- Consolidate the supplier base with a focus on retaining key local partners and developing cross-border capabilities.
- Train teams on new processes, taking into account cultural differences in work practices.
4. Optimization Phase
- Achieve full optimization of the transport network by leveraging data from the entire European organization and maximizing international routing opportunities.
- Implement advanced analytics tools tailored to the specific characteristics of different European markets.
- Finalize the integration of all systems with full multilingual support and alignment with local business standards.
- Deploy solutions compliant with the eFTI regulation and European ESG requirements.
- Continuously monitor KPIs and adjust strategies in response to evolving European regulations.
Proposed Monitoring Indicators
Operational KPIs
- On-time delivery performance
- Utilization of transport capacity on cross-border routes
- Average order fulfillment time, including border clearance
- Compliance with low-emission zones in European cities
Financial KPIs
- Transport cost per product unit, adjusted for cross-country toll differences
- Logistics EBITDA, reflecting cost variations between countries
- Compliance costs related to European regulations
- ROI from integration projects
ESG KPIs (aligned with EU requirements)
- CO₂ emissions per unit of transported goods
- Share of intermodal transport in long-distance operations
- Compliance with European ESG standards across the supply chain
- Share of low-emission vehicles in deliveries to restricted traffic zones
