Shippers who implement strategic transportation contract management consistently realize measurable benefits:
Cost savings: 8-15% reduction in transportation spend through optimized routing, rate validation, and accessorial control
Capacity reliability: 90%+ tender acceptance rates even during peak seasons because carriers prioritize committed volume
Budget accuracy: Predictable freight spend within 3-5% variance enabling better financial planning
Administrative efficiency: 40-60% reduction in time spent managing carrier relationships, resolving billing disputes, and firefighting service failures
Service improvement: Measurable gains in on-time delivery, damage prevention, and customer satisfaction
Data-Driven Decision Making: Weekly KPI reporting on tender acceptance, on-time performance
Shippers working with TLI achieve 8-10% annualized savings on compared to baseline rates through the combination of strategic sourcing, advanced supply chain analytics, and active LTL/FTL contract management.
Many shippers lack the internal resources, technology, or market expertise to execute sophisticated freight contract optimization programs. Consider outsourcing transportation contract management when:
Your team experiences:
- Inconsistent rate performance across regions or business units
- Limited visibility into true transportation costs and performance
- Reactive firefighting instead of proactive carrier management
- Technology gaps preventing effective routing and audit capabilities
- Insufficient market intelligence for rate benchmarking
You need:
- Access to pre-negotiated carrier networks and volume leverage
- Advanced TMS technology without capital investment
- Freight audit and payment services ensuring billing accuracy
- Continuous optimization through data analytics and market monitoring
- Expertise in freight contract negotiation and relationship management
TLI maintains a 4.9-star rating on Google across over 300 verified reviews, reflecting the service quality that comes from specialization in managed freight contracts. When transportation management is your core competency rather than a distraction from your primary business, results improve dramatically.
Freight Contract Management Questions Every Shipper Should Ask
Questions for Your Internal Team:
Rate and contract structure:
- Do we know our true cost per mile and cost per pound by lane?
- Are our contracted freight rates competitive with current market conditions?
- How much are we spending on accessorials, and is this aligned with contract terms?
- What percentage of our freight moves on contracted vs. spot rates?
Carrier relationships:
- Are we delivering the volume we committed to carriers?
- How do our operations (dock efficiency, appointment scheduling) impact carrier performance?
- What’s our tender acceptance rate, and why are loads being rejected?
- Do carriers view us as a preferred shipper or a last resort?
Technology and data:
- Can we quickly identify our highest-cost lanes and lowest-performing carriers?
- Are our systems catching billing errors and invoice variances?
- Do we have real-time visibility into shipment status and exceptions?
- Can we model the impact of routing changes before implementation?
Questions for Your Carriers:
Service expectations:
- What on-time performance can you commit to by lane?
- How do you handle capacity constraints during peak seasons?
- What visibility and communication can we expect during transit?
- How quickly do you respond to service failures and claims?
Pricing transparency:
- How is your fuel surcharge calculated, and how often does it update?
- What accessorial charges might apply that aren’t in the base rate quote?
- Under what circumstances would rates be subject to change?
- How do you validate dimensional and freight class accuracy?
Partnership potential:
- What volume commitment would improve our pricing position?
- Are you willing to integrate with our technology systems?
- How do you measure and report performance against KPIs?
- What process improvements could reduce costs for both parties?
Common Freight Contract Management Mistakes to Avoid
Mistake 1: Focusing Only on Base Rates
Base freight rates represent 60-75% of total transportation cost. Shippers who ignore fuel surcharges, accessorials, and service failures leave 25-40% of their spend unmanaged.
The fix: Negotiate comprehensive pricing including fuel formulas, accessorial schedules, minimum charges, and service level credits.
Mistake 2: Annual Bid Events Without Interim Management
Markets change. Carrier performance fluctuates. Waiting 12 months to address problems costs money and damages relationships.
The fix: Implement quarterly business reviews, monthly KPI tracking, and mid-contract optimization for underperforming lanes.
Mistake 3: Awarding Contracts Without Volume Commitment
Carriers price based on expected volume density. If you can’t commit, they’ll pad rates to protect against uncertainty.
The fix: Build realistic lane-level forecasts and hold your operations team accountable to tender expectations.
Mistake 4: Ignoring Technology Integration
Manual processes create errors, delays, and missed optimization opportunities. Spreadsheet-based contract management doesn’t scale.
The fix: Invest in or partner for TMS technology that automates tendering, tracks performance, and audits invoices.
Mistake 5: Treating All Carriers the Same
Your top 20% of carriers likely handle 80% of your volume. They deserve different management attention than occasional backup providers.
The fix: Create tiered carrier programs with corresponding service expectations, volume commitments, and relationship investment.
