Freight costs are a major line item for paper, pulp, and packaging distributors—and they’re highly volatile. With fuel prices, carrier capacity, and regional regulations constantly shifting, freight rate benchmarking has become a must-have strategy for cost control and supply chain optimization.
This guide is tailored specifically to the paper packaging industry, offering practical steps and insights for benchmarking freight rates in a way that supports profitability, efficiency, and client satisfaction.
Why Freight Rate Benchmarking Matters in the Paper Industry
Paper-based products are often:
Bulky and low in density, leading to dimensional weight (DIM) pricing penalties.
Sensitive to stacking and moisture, requiring careful palletization.
High-volume in outbound loads, especially in e-commerce, foodservice, and industrial supply.
These characteristics can inflate transportation costs if not proactively managed.
Freight rate benchmarking allows paper distributors to:
Ensure competitive pricing from carriers
Identify overcharges and billing errors
Inform packaging design decisions
Improve margins on delivered pricing contracts
Step-by-Step Guide to Freight Rate Benchmarking
1. Segment Your Freight Data by Product Type and Route
Not all freight is created equal. Group shipments by:
Packaging type (e.g., kraft rolls, corrugated cartons, folding cartons)
Shipping mode (LTL, FTL, intermodal)
Route or lane (short-haul, regional, cross-country)
This allows more accurate apples-to-apples comparisons of freight rates.
2. Establish Baseline Cost Metrics
Track key freight metrics such as:
Cost per pound
Cost per hundredweight (CWT)
Cost per pallet or per cubic foot
Fuel surcharge percentages
Average cost per mile (by mode and region)
Use these benchmarks to measure against industry standards or historical trends.
3. Use Market Index Tools
Compare your rates to regional and national averages using freight benchmarking platforms such as:
DAT Freight & Analytics
FreightWaves SONAR
Truckstop.com
Cass Freight Index
These tools provide real-time and historical data for spot and contract rates, enabling you to identify whether you’re paying above or below the market.
4. Leverage Third-Party Logistics (3PL) Benchmarks
If you outsource freight to 3PLs, request benchmark reports for your freight class and region. Many logistics providers offer:
Industry-specific benchmarking dashboards
Monthly freight rate trend analyses
Modal optimization recommendations
Tip: Choose 3PLs familiar with packaging and low-density freight to ensure relevant insights.
5. Audit and Compare Carrier Quotes
Regularly solicit competitive quotes from multiple carriers. Compare them on:
Linehaul rates
Accessorial charges (liftgate, residential, inside delivery)
Transit times and on-time performance
Claim ratios (especially for fragile or weather-sensitive paper products)
Even a 5–10% cost difference per shipment can result in major savings over time.
Paper Industry Freight Challenges to Consider
Dimensional weight billing: Many paper products are charged based on volume, not just weight. Benchmarking must account for DIM charges in LTL and parcel networks.
Moisture control: Kraft and corrugated materials often require dry van or climate-controlled service in humid regions.
Pallet optimization: Fewer units per pallet (due to size or stacking limits) can drive up freight cost per unit unless packaging is optimized.
Best Practices for Ongoing Freight Optimization
Integrate a Transportation Management System (TMS) to automate rate comparisons and track real-time market shifts.
Re-bid freight lanes annually—especially your highest-volume routes.
Maintain lane-level rate histories to identify pricing trends and negotiate more effectively.
Collaborate with packaging engineers to modify box dimensions and improve pallet utilization where freight costs are high.
Using Benchmarking for Client-Facing Advantages
Distributors can use freight rate benchmarking to:
Offer more accurate landed cost estimates
Validate sustainability claims with reduced emissions per unit shipped
Strengthen client trust by offering freight transparency
Differentiate from competitors with cost-efficient logistics programs
Freight rate benchmarking is no longer optional for paper packaging distributors—it’s a critical tool for profitability, competitiveness, and resilience in a fluctuating market. By leveraging freight data, market indexes, and optimization tools, you can make informed decisions that protect margins and enhance customer satisfaction.
