The Total Cost of Freight: Why Paying for Quality Service Pays Off in the Long Run 

When evaluating shipping options, many businesses focus on one primary question: How much does LTL freight cost?

While this is important, it may only tell part of the story. The true total cost of transportation includes not just the initial shipping rate. Additional costs can include accessorials that were not included on quotes or pickup requests, delivery delays and damage claims.

These costs then create added follow-up with your carrier, remanufacturing charges, detention charges, and damage your company’s reputation with customers. When it comes to freight, paying for quality service often saves money in the long run and contributes to more reliable operations.  

It is common for different departments within an organization to have visibility into only one piece of the total cost puzzle.

For example, the shipping department may focus on the original shipping quote, ensuring rates are competitive. Sales, however, may deal with the direct impacts of a delayed delivery, which can compromise customer relationships. Meanwhile, accounts payable may encounter unexpected accessorial or detention charges that add to the overall shipment expense. These fragmented views can make it more challenging to understand the total cost of freight.  

Here's how investment in quality logistics services addresses both visible and hidden costs. 

The total cost of freight is more than just the shipping price listed on the invoice. It includes several direct and indirect costs that can significantly impact your bottom line.

To make informed business decisions, it’s critical to understand all costs associated with freight services. Here is an overview of the main factors.

Visible Costs 

These are the expenses upfront, the ones you routinely track and budget for, such as: 

• Base Shipping Rates – The core cost to ship LTL (Less-Than-Truckload) which varies based on shipment weight, dimensions, distance, and freight class.  

• Accessorial Charges – Additional charges for services like liftgate assistance, inside delivery, or after-hours service.  

While these are often the focus of cost analysis, they provide only a partial view of the overall expense.  

Hidden Costs  

Hidden costs are the ones that aren’t immediately apparent but accumulate significantly over time. It’s worth understanding the potential drawbacks if you are considering less expensive shipping options. 

• Shipping Delays – Delayed shipments affect business operations, lead to dissatisfied customers, and could result in fines or missed revenue opportunities. Carriers with high on-time delivery percentages reduce this risk. With just-in-time manufacturing systems, manufacturing may stop, since raw materials or supplies are not available for production. Operational efficiency and throughput can be impacted. This leads to paying labor for idle time, line restart costs, and further delays. 

• Operational Inefficiencies – Processing claims or resolving late deliveries result in additional costs and administrative work to manage damage, product replacement, customer dissatisfaction, and brand reputation. Carriers with a low claims ratio play a vital role in minimizing these losses and take critical steps to protect freight through the transit process. 

Understanding these factors is key to accurately evaluate freight costs and selecting the right logistics partner. Focusing solely on initial costs might save a few dollars upfront, but while choosing less expensive carriers may seem appealing initially, unforeseen costs can lead to higher overall costs and operational challenges.

Paying for premium service ensures reliability, efficiency, and peace of mind. Here are three compelling reasons why investing in quality freight services pays off.  

1. Reliable Carriers  

A dependable freight partner ensures delivery schedules are consistent with minimal disruptions. Look for a carrier that invests in well-maintained fleets and proactive route management to reduce unexpected delays or equipment failures. A reliable shipping partner means fewer productivity losses and higher customer satisfaction.  

2. Proactive Communication  

Freight providers that actively update customers on shipment status enable better planning and operational efficiency. Whether using LTL guaranteed service or LTL standard service, knowing exactly where your shipment is can save time, money, and frustration.  

3. Damage-Free Shipments   

Selecting a carrier that prioritizes claims prevention is a wise investment for shippers aiming to reduce or eliminate freight damage. Quality carriers employ tools like deck trailers, dunnage, straps, and airbags to secure cargo and ensure it arrives safely. They also focus on continuous training for dock employees and drivers, further minimizing the risk of damage. By choosing a carrier committed to properly securing freight, shippers can be confident that their goods will be protected. This ultimately reduces their total freight costs.  

Shipping LTL freight requires careful planning and attention to detail. By understanding the full picture and committing to high-quality freight services, businesses can reduce freight claims, save money in the long term, drive improved customer satisfaction, and optimize operational efficiency. 

Tools like OD’s Freight Value Calculator demonstrate how higher-quality service can lower your overall transportation costs by avoiding these additional expenses. The calculator offers a way to understand freight costs beyond basic shipping rates. By inputting metrics like shipping volume, claims ratios, and on-time delivery percentages, businesses can see how service impacts total costs. 

This tool not only identifies cost-saving opportunities but also sheds light on areas where service quality affects your operations. It’s an excellent resource for companies deciding which freight carriers align with their business goals. 

Businesses in multiple industries have reaped the benefits of prioritizing quality in freight services. By leveraging reliable carriers, they’ve reduced damage claims, streamlined operational workflows, enhanced relationships with their customers and avoided costly chargebacks. 

For example, an Old Dominion CPG customer was shipping beef jerky to retail. They started experiencing out-of-control chargebacks.  

In the case of this customer, OD’s MABD team was able to help them dispute incorrect chargebacks, prioritize their shipments in our network, and provide proof of delivery for their retail customers. The shipper was able to see an improvement by having appointment details ready to contest erroneous costs if needed. 

This case study proves that balancing cost and quality isn't just smart—it's essential.