Freight Costs Are Rising: How to Protect Your Margin

October 27, 2026 · By Chris Todd · 3 minute read

Freight Costs Are Rising. What Actions Do You Need To Take To Protect Your Margin?

For food and beverage companies, freight increases don’t land evenly. Some customers and delivery locations get hit much harder than others. Identifying them is the first step to protecting margin without compromising service.

Recent government data shows why this matters now. According to the Bureau of Labor Statistics, what trucking companies charge to haul freight rose 3.8% in September, while grocery prices at the store fell 0.1%. Associated Press reporting tied the increase to higher fuel costs, which are also putting pressure on warehousing and food prices.

These are national figures, so they show the direction of the market, not what happened to your business. Your freight rates may have risen more or less than 3.8% depending on your lanes, carriers and contracts. Likewise, grocery shelf prices don’t tell you what you’re being paid by your retail customers. The only way to know how rising freight costs are affecting your margin is to look at your own data: where your transportation spend is going up, and whether your pricing and operating decisions account for it.

The average is hiding something

An average freight cost per case or pound is useful for tracking overall performance. However, it offers little insight into which deliveries need your attention.

For example, suppose you ship the same products to two different distribution centers for one of your customers. DC One receives two full truckloads per week. DC Two orders and receives four partial loads each week.

That delivery pattern to the second DC may have developed gradually: a rush order here, a temporary schedule change there that was never addressed and became the new normal. Unless that facility is much closer, the KPI ($/lb or $/case) for serving the customer at that location is substantially higher than at the first. Averaged together, the account might still look healthy.

At all times, but especially in an elevated transportation market, recurring patterns like these signal unnecessary cost-to-serve and need to be addressed.

Separate the market from the habits

Before changing anything, you have to know your cost-to-serve. Start by answering these three questions:

1. Where has cost-to-serve gone up most? Look at your delivered KPIs ($/lb, $/case, etc.) by customer and ship-to location.
2. What is driven by the market, and what is driven by your operations? Higher rates may explain part of an increase (market). Smaller orders, changes in frequency, detention and other accessorial charges may explain another part (operational characteristics). Each cause calls for a different response.
3. Which characteristics can you change, and what action needs to be taken? Order size and frequency may protect a customer relationship worth the expense. However, these characteristics may have begun as a fix for a problem that has since disappeared, or simply as a matter of convenience. Once you’ve made a determination, involve the account owner, transportation, finance and customer service in developing the right solution, and get to work.

Options

The point of the analysis is an actionable decision. Common options include:

• Sourcing: Are we serving the customer from the right warehouse or DC?
• Frequency: Can orders be consolidated where inventory and service requirements allow?
• Routing: Can shifting delivery days or appointment windows allow more efficiently routed shipments?
• Order minimums: Are we holding customers to their contractual obligations?
• Lead time: Can longer lead times expand transportation options?
• Network study: Should the network be revisited because customer, manufacturing or distribution center footprints have materially changed, whether organically or through an acquisition or divestiture?

Pick 3–5 customers

You don’t need a full network study to begin. Take 3–5 of your largest customers by volume and compare:

• Delivered KPIs ($/lb or $/case) for the most recent quarter versus the same quarter last year
• Average order size
• Deliveries per week
• Locations served, with corresponding volumes
• Special requirements
• Accessorial charge detail

Then flag locations where costs rose faster than average or have stayed persistently high.

NT Logistics has deep experience helping companies examine their cost-to-serve and develop actionable transportation programs. Talk with our team about where to begin.

National data shows the market direction. Your data shows where you need to take action