Domestic and International Freight Cost Reviews: Finding the Money (and the Mistakes) in Your Freight Spend
Freight is a funny cost line. Everyone knows it matters. Everyone has a view on what it “should” be. And yet, in a lot of Australian organisations, freight spend is still treated as something you look at, rather than something you manage.
The result is predictable:
- domestic linehaul rates are renegotiated every few years, but accessorials quietly double
- parcel contracts look competitive, but residential surcharges and re-deliveries chew margin
- international ocean freight gets “set” at tender time, then the real cost arrives through local charges, detention, demurrage and priority fees
- air freight is used as a pressure valve for planning issues, then becomes normalised
- invoices are paid because the business is busy, not because they’ve been verified
A freight cost review is the structured reset that brings clarity back. It tells you, with evidence:
- what you’re paying end-to-end
- what’s driving that cost
- where the leakage is (rates, surcharges, behaviours, terms, service failures)
- what to do next (quick wins, retender strategy, governance)
This article explains how domestic and international freight cost reviews work in the real world—Australian geography, Australian lanes, Australian operating constraints. It includes a practical checklist, common traps, and what “good” looks like at the end. It also outlines how Trace Consultants can help, whether you need a quick diagnostic, a full go-to-market, or ongoing freight governance support through Procurement, Strategy & Network Design, Services, and Project & Change Management.
What is a Domestic and International Freight Cost Review?
A Domestic and International Freight Cost Review is an evidence-based assessment of your freight spend and freight performance across:
- Domestic freight: linehaul, metro, regional, intrastate, interstate; road, rail, coastal (where relevant); B2B and B2C; parcel and pallet; courier and dedicated
- International freight: ocean freight (FCL/LCL), air freight, cross-border parcel; plus origin and destination charges, customs and clearance-related costs, and container-related fees that often hide outside the “freight rate” conversation
A proper review doesn’t stop at carrier rate cards. It looks at the full landed cost and the behaviours that create it, including:
- lane and zone design
- dispatch profile (cut-offs, consolidation, fill, dwell)
- packaging and cube efficiency
- service promises and delivery windows
- claims, damages, redeliveries, failed delivery patterns
- contract terms, indexation, and surcharge mechanics
- invoice accuracy and auditability
- governance: who owns freight decisions, and how exceptions are managed
In other words: a cost review is half analytics, half operating model.
Why Freight Cost Reviews are Particularly Important in Australia
Australia has a handful of structural realities that magnify freight cost leakage:
1) Distance turns small inefficiencies into big dollars
A minor consolidation problem on the Hume corridor becomes a material cost issue quickly. The same is true for cross-country moves where volume is imbalanced.
2) Regional and remote servicing complexity
If you serve mining regions, regional hospitals, aged care, construction sites, or remote communities, the cost drivers are different: availability of capacity, return load scarcity, time windows, and safety/compliance requirements.
3) Coastal concentration and port dynamics
International freight is shaped by port congestion, container availability, stevedore practices, and how quickly containers are turned around. These costs often sit in “other charges” and are not visible in standard transport reporting.
4) Volatility is real
Fuel, capacity, peak season, blank sailings, disruptions, industrial action, and weather-related closures can shift costs fast. If your contracts and governance can’t absorb volatility without chaos, you end up paying “panic pricing”.
5) Parcel growth changes the economics
More B2C volume and more small drops means more residential surcharges, more failed deliveries, and more claims. Many organisations are still using “B2B thinking” to manage a parcel-heavy world.
The Most Common Freight Cost Review Mistake
The most common mistake is reviewing only the obvious line items:
- base rate per pallet
- base rate per parcel
- base ocean freight rate per container
That’s like reviewing your grocery bill by only checking the price of bread.
Freight cost leakage is often in the add-ons and the behaviours:
- fuel surcharges with unclear indexation rules
- minimum charges triggered by low fill or poor consolidation
- tail-lift, waiting time, redelivery, reweigh, hand unload
- carton non-conformance (dim weight surprises)
- residential and remote area surcharges
- misapplied zones
- detention and demurrage from slow turnarounds
- “priority” fees and premium services becoming the default
- double handling and rework driven by poor dispatch discipline
A good review makes these visible and ties them back to root causes.
What You Get From a High-Quality Freight Cost Review
A strong freight cost review typically delivers:
- An end-to-end freight spend baseline (domestic + international, apples-to-apples)
- A lane/zone cost-to-serve map showing where costs cluster and why
- A surcharge and accessorial profile with drivers and accountability
- An invoice accuracy view (what’s being billed incorrectly or inconsistently)
- Carrier performance insights tied to commercial outcomes (claims, failures, lead times)
- A prioritised opportunity register (quick wins + structural plays)
- A go-to-market plan if a tender/renegotiation is warranted
- A freight governance model so benefits don’t leak back next quarter
If you only get “rates look high, retender”, you didn’t get a review—you got an opinion.
Part 1: Domestic Freight Cost Reviews (Australia)
Domestic freight reviews in Australia should separate freight into the way it actually behaves:
- pallet / parcel
- metro / regional / remote
- B2B / B2C
- direct to customer / via DC / cross-dock
- standard / express / time-windowed
- dangerous goods / high-risk / temperature-controlled (if relevant)
That segmentation is not busywork. It’s how you stop comparing the wrong things.
Domestic Freight Cost Review: What to Analyse
1) Lane and zone spend baseline
Start with a simple truth: you can’t manage what you can’t see.
A practical baseline includes:
- total spend by carrier, service, mode
- spend by lane (origin–destination pairs)
- volume measures (shipments, consignments, pallets, cartons, kg, cubic metres)
- cost per unit (cost per shipment, cost per pallet, cost per carton, cost per kg, cost per m³—whichever fits your business)
- mix shifts (what changed compared to last year)
2) Accessorial and surcharge analysis
This is where the “quiet creep” lives.
Common domestic add-ons:
- fuel surcharge
- tail-lift / hand unload
- waiting time / detention
- redelivery / failed delivery
- incorrect address / re-route
- remote area / regional surcharge
- oversize / overweight / non-conveyable
- time-windowed or “VIP” deliveries
- after-hours deliveries
- dangerous goods surcharges
A cost review should quantify:
- total accessorial value
- top accessorial types by spend
- which sites/customers/products trigger them
- whether the contract terms are being applied correctly
- which drivers are operational behaviour vs carrier practice
3) Dispatch profile and consolidation
Many domestic freight problems are self-inflicted by dispatch patterns.
Look for:
- low average consignment size
- split shipments to the same destination
- poor linehaul fill and “minimum charge” triggers
- high frequency / low drop density routes
- late cut-offs causing premium services
This is where freight reviews connect to warehouse operating discipline and planning stability. If dispatch is chaotic, freight cost will always look expensive.
Trace often links freight cost review findings to broader distribution and operating model improvements through Warehousing & Distribution and Services.
4) Contract compliance and rate integrity
Domestic freight contracts can contain hidden complexity:
- zone tables and postcodes
- seasonal and peak rules
- minimums
- indexation schedules
- fuel surcharge mechanics
- dimensional weight rules
- service definitions (what counts as “express”?)
A cost review should test:
- are the right rates being applied to the right consignments?
- are zones mapped correctly (and maintained)?
- is fuel surcharge calculated per the agreed method?
- are minimums being applied consistently?
- are exceptions being approved—or just accepted?
5) Carrier performance and cost consequences
Cost and service aren’t separate. Poor service creates cost:
- claims and damages
- redeliveries
- customer churn and service remediation
- rework and labour
- expedited recoveries
A good review ties performance to dollars:
- cost of failed deliveries
- claim rate and average claim value
- rework drivers in warehouse/despatch
- customer impacts where data is available
Domestic Freight Quick Wins (Often Found in the First Review)
Without promising specific outcomes (because it depends on your profile), these are the common “first wave” opportunities:
- fix zone mapping errors and outdated postcode tables
- tighten dimensional weight rules and carton conformance (often a hidden parcel cost driver)
- challenge accessorial triggers (especially waiting time and redelivery patterns)
- remove premium services that have become default
- renegotiate fuel surcharge mechanics (clear indexation and auditability)
- improve dispatch consolidation rules (reduce split shipments)
- introduce invoice validation routines (catch obvious mischarges)
- rationalise carrier mix where service overlap creates unnecessary complexity
These wins usually reduce noise immediately—then the bigger structural opportunities become easier to tackle.
Part 2: International Freight Cost Reviews (Australia)
International freight reviews are where many organisations are surprised by how much cost sits outside the base ocean or air rate.
A proper international cost review looks at the full landed logistics cost across:
- origin charges
- main leg (ocean/air)
- destination charges
- container-related fees
- customs/clearance interface costs (where in scope)
- inland leg (port-to-DC)
- storage, holds, inspections, and delays where cost is incurred
International Freight Cost Review: What to Analyse
1) Trade lane baseline and mode mix
Start by mapping:
- top trade lanes by volume and value
- FCL vs LCL mix
- air vs ocean mix (including “air by exception” behaviour)
- seasonal peaks (what drives them)
- supplier concentration (how much volume sits with a few suppliers)
2) Incoterms and responsibility clarity
One of the messiest sources of cost confusion is who is responsible for what.
A review should clarify:
- which Incoterms are used per supplier
- who pays origin handling, export clearance, main leg, destination handling
- who carries risk at each handover point
- where costs are being double-paid or missed
Even if your procurement team negotiates Incoterms, the freight outcome is owned operationally. Reviews that don’t reconcile commercial terms with actual invoices often miss the biggest leakage.
This is where freight reviews intersect with Procurement and supplier commercial management.
3) Local charges and “other fees”
For ocean freight, these often include:
- terminal handling charges
- documentation fees
- port service charges
- security fees
- wharf storage
- transport to/from port
- fumigation or inspections (where applicable)
- “priority” load/roll fees (where they occur)
For air freight:
- handling fees
- screening/security surcharges
- documentation fees
- storage
- priority handling
A cost review should:
- quantify these charges separately from base rates
- identify which forwarders/carriers apply which fees
- test consistency and contract alignment
- identify avoidable triggers (late paperwork, slow pickup, delayed unpack)
4) Demurrage, detention, and container turn-time
Container-related costs are often the most painful because they feel like penalties—and they are.
A review should examine:
- average container dwell time at port
- average time from discharge to pickup
- unpack time at DC or depot
- return timeframes and depot constraints
- patterns by port, carrier, forwarder, and destination site
- the root causes (capacity, appointment systems, labour, warehouse readiness, documentation delays)
If your DC isn’t ready to unpack, international freight cost becomes a warehousing problem. This is where an integrated review adds value—looking at the end-to-end flow, not just the ocean invoice.
5) Volume commitments, allocations, and market mechanics
International freight contracts often include:
- volume commitments
- allocation arrangements
- rate validity windows
- peak season rules
- minimum quantity commitments
A review should test whether:
- commitments are realistic and being met
- you’re paying premiums for shortfalls or peaks
- you have the right flexibility across carriers/forwarders
- your bookings are aligned to actual demand (vs last-minute firefighting)
6) Air freight “leakage”
Air freight is often used to solve non-air problems:
- forecast misses
- supplier production delays
- late purchase orders
- poor inventory policy
- missed sailing cut-offs
A review should classify air shipments by root cause:
- true urgency (genuine demand spikes or critical failures)
- supplier non-performance
- internal planning or ordering behaviour
- range lifecycle issues
- service promise misalignment
The goal is not “never use air”. The goal is “use air deliberately, not by habit”.
If your air freight is being driven by planning instability, that’s a signal to connect freight findings to planning governance—an area Trace supports through broader supply chain advisory and operating model uplift under Services.
The Data Checklist: What You Need for a Freight Cost Review
A common reason freight reviews stall is data chaos. The trick is not to demand perfect data—it’s to define the minimum viable dataset and reconcile early.
Here’s a practical checklist.
Domestic freight data
- carrier invoices (ideally 6–24 months)
- consignment data (ship date, origin, destination postcode, service type)
- weights and dimensions (actual and billed)
- delivery performance data (if available)
- claims data (damage, loss, disputes)
- rate cards / contracts (including fuel indexation and accessorial schedules)
- site profiles (cut-offs, dispatch frequency, constraints)
International freight data
- shipment logs (supplier, origin port/airport, destination port/airport, incoterms)
- forwarder/carrier invoices and statements
- charges split (base rate, local charges, container-related costs)
- container movement milestones (discharge, pickup, unpack, return)
- demurrage/detention records (if tracked)
- mode choice records (why air vs ocean)
- supplier OTIF/lead time performance (where it influences mode)
Business context
- customer promise/service model
- network footprint (DCs, cross-docks, stores/sites)
- product profiles (fragility, DG, temperature, cube/weight characteristics)
- seasonality and promo calendar (where relevant)
If this feels like a lot: it’s usually already sitting in systems—just not connected. Trace can help bring structure to the dataset quickly using practical reporting and analysis approaches supported by Technology and Solutions where needed.
Freight Cost Review Method: A Practical Step-by-Step
A freight cost review that delivers action (not just insight) usually runs through six steps.
Step 1: Baseline and cleanse (fast, not perfect)
- build a spend baseline
- reconcile invoice and consignment data
- confirm KPI definitions (what is a “shipment”, what is “delivered on time”)
- identify data gaps and agree how to treat them
Step 2: Segment and map cost-to-serve
- by lane, zone, service type, customer/channel
- identify cost outliers and cost drivers
- isolate accessorial patterns
- separate base rates from add-ons
Step 3: Identify leakage and root causes
- rate integrity issues
- surcharge triggers and behaviour drivers
- mode choice drivers (especially international air)
- contract and governance gaps
- service failure cost consequences
Step 4: Build an opportunity register (prioritised)
- quick wins (audit fixes, zone corrections, contract compliance)
- operational changes (consolidation rules, cut-off discipline)
- commercial levers (renegotiation, tender, contract restructure)
- structural plays (network, carrier model, service promise redesign—if needed)
Step 5: Decide go-to-market vs renegotiation
Not every situation needs a full tender. Sometimes the best outcome is:
- renegotiation with benchmarking
- hybrid carrier model
- panel structure
- service redefinition and rate rebasing
- revised surcharge mechanics and audit clauses
This is where procurement and supply chain alignment matters. Trace supports the commercial pathway through Procurement and structured market engagement capability.
Step 6: Lock in governance so savings don’t leak
- invoice audit routine
- carrier performance cadence (monthly / quarterly)
- exception approvals for premium services
- master data controls (zones, dimensions, service codes)
- KPI dashboards that operators actually use
- clear ownership of freight decisions
A freight review without governance is a short-lived win.
Domestic vs International: Different Levers, Same Discipline
It’s tempting to treat domestic and international freight as separate worlds. In practice, they’re connected:
- international arrivals drive DC inbound peaks
- DC capacity affects unpack speed and container return
- inbound timing affects outbound service performance and expedite choices
- planning stability affects the need for premium freight in both directions
The best freight cost reviews do two things at once:
- reduce the cost of moving freight
- reduce the need for expensive freight by stabilising the system
Common Traps That Derail Freight Cost Reviews
Trap 1: Rate shopping without fixing the drivers
If accessorials and poor dispatch behaviours are driving spend, a cheaper base rate won’t hold.
Trap 2: Comparing carriers with different service definitions
“Express” can mean different things, and so can “standard”. Reviews must normalise service commitments.
Trap 3: Ignoring packaging and cube
Dimensional weight is a major cost driver, especially in parcel. Packaging is not just a sustainability issue—it’s a freight economics issue too.
If sustainability and packaging optimisation are part of your agenda, Trace supports practical improvements through Supply Chain Sustainability.
Trap 4: Treating international costs as only “ocean rate”
Local charges, detention/demurrage, and delays often outweigh the base rate conversation.
Trap 5: Not building invoice audit into BAU
Invoice errors and misapplied surcharges are common. If you don’t validate routinely, the leakage returns.
Trap 6: Forgetting the operating model
Who approves premium services? Who owns carrier performance? Who manages zone changes? If nobody owns it, cost control becomes accidental.
What “Good” Looks Like After a Freight Cost Review
A successful freight cost review doesn’t just produce insights; it changes how freight is managed day-to-day.
You should expect:
- a clear freight baseline (domestic + international)
- transparent surcharge profiles and accountability
- consistent lane/zone cost reporting
- improved contract terms and auditability
- a defensible go-to-market or renegotiation outcome (if pursued)
- fewer premium freight exceptions
- improved consolidation and dispatch discipline
- measurable performance routines with carriers and forwarders
- fewer disputes, fewer surprises, and cleaner decision-making
How Trace Consultants Can Help
Trace Consultants supports Australian organisations to reduce freight spend and improve freight performance with an approach that blends analytics, commercial rigour, and operational practicality.
Depending on your starting point, Trace can help in a few common ways:
1) Freight diagnostic and baseline build
If you don’t have a clean baseline or don’t trust your reporting, Trace can rapidly establish:
- spend baselines
- lane/zone cost-to-serve visibility
- surcharge and accessorial profiles
- initial leakage hypotheses and quick wins
This is often the fastest way to move from “we think freight is high” to “we know what’s driving it”.
Explore: Services and Insights
2) Domestic freight cost reviews and carrier strategy
Trace supports domestic freight reviews across parcel, courier, pallet and linehaul, including:
- lane and zone modelling
- service model and carrier mix design
- contract and surcharge mechanics review
- invoice audit approach design
- carrier performance frameworks and governance
This work often connects naturally into distribution operating model improvement supported by Warehousing & Distribution and broader supply chain advisory under Services.
3) International freight cost reviews and landed cost improvement
Trace can help build visibility and control across:
- trade lane baselining
- Incoterm and cost responsibility clarity
- local charges and container-related costs
- demurrage/detention drivers and turnaround improvement
- forwarder performance and contract governance
- air freight leakage and root cause reduction
Where the root cause crosses into planning, inventory policy, or DC constraints, Trace can help shape an integrated improvement plan rather than treating freight as a standalone line item.
4) Go-to-market support: tendering, negotiation, and contracting
Where a tender or renegotiation is warranted, Trace supports:
- sourcing strategy design (panel vs primary/secondary vs hybrid)
- RFx pack development (scopes, service definitions, pricing schedules)
- evaluation models that protect service outcomes
- negotiation support (rates, indexation, accessorials, audit clauses)
- contracting support and mobilisation planning
Explore: Procurement and Project & Change Management
5) Freight governance that prevents value leakage
Trace helps organisations lock in durable control through:
- KPI design and reporting cadence
- carrier/forwarder governance forums
- invoice validation routines and dispute workflows
- decision rights for premium freight
- continuous improvement backlogs and benefits tracking
Where tooling or workflow automation helps reduce manual effort and improve visibility, Trace can support through Technology and Solutions.
A Practical Starting Point
If you’re considering a freight cost review, start with three questions:
- Do we know our true cost-to-serve by lane, zone, and service type?
- What share of freight spend is base rate vs surcharges/accessorials—and why?
- Which operational behaviours are creating avoidable freight cost (premium services, low consolidation, detention)?
If the answers are unclear, you’re ready for a review—because clarity is where the value begins.
Closing Thought
Freight cost doesn’t just rise because the market is tough. It rises because small inefficiencies go unchallenged, exceptions become normal, and contracts drift away from operational reality.
A domestic and international freight cost review is the reset: it makes spend transparent, ties costs back to behaviour, and gives you a practical pathway to lower costs without breaking service.
If you want to turn freight from a volatile expense into a controlled capability, Trace Consultants can help—whether that’s a rapid baseline, a full review, a go-to-market program, or ongoing freight governance.
Next steps: explore Procurement, Services, or reach out via Contact.
