Total Cost of Ownership: Lower Transportation & Freight Costs Through Right-Sizing and Supplier Strategies

Freight rates fluctuate every year to reflect fuel, labor, and network-wide cost changes, and inflation or tariff shifts can make shipping a meaningful part of overall product cost. By right-sizing packaging and sourcing materials strategically, businesses can manage those expenses while maintaining strong service levels for their customers —and their carrier partners.

How Packaging Influences Freight Costs 

Week to week, shipping charges move with industry factors such as fuel-index adjustments, delivery-zone distances, and dimensional-weight (DIM) calculations. The size, weight, and configuration of your packaging determine how those variables affect your bottom line.

Here are five factors that demonstrate how packaging impacts freight as a prime TCO lever:

• DIM fees: Carriers bill on the greater of actual or volumetric weight—they charge by size as much as by weight. Empty space equals wasted dollars.
• Under utilized truck space: Oversized or non-optimized boxes waste space, so fewer units fit per pallet or trailer, and require extra loads to move the same volume.
• Inbound complexity: Sourcing packaging from distant or multiple vendors adds miles, touch points, and administrative overhead.
• Damage and reships: Underperforming packaging increases the likelihood of product damage.Every replacement order increases freight spend.
• Supplier performance drag: Time spent chasing late or inaccurate shipments is an invisible—but very real—logistics cost.

Right-Sizing: The Fastest Path to Better Load Density

Optimizing box dimensions is the fastest path to lower freight spend. Smaller packages reduce DIM fees, fit more units per pallet, and curb material use. Three proven tactics stand out:

1. Box‑to‑mailer conversions: Lightweight items that ship safely through the parcel network in a cushioned or non-cushioned mailer can dramatically shrink package volume and eliminate void fill.
2. Rigid‑to‑flexible upgrades: Replacing paperboard cartons or clamshells with flexible pouches in primary, secondary, or ecommerce packaging can slash material volume by around 70 %, while reducing DIM fees and associated emissions by more than half. 
3. Right-sizing also supports sustainability goals: Fewer truckloads translate to lower fuel burn and emissions.

Building Strategic Supplier Partnerships 

Small packaging changes can have a major impact, which is why choosing the right supplier is critical. Keep these pro-tips in mind to select a strategic supplier and accelerate savings: 

• Supplier consolidation: Fewer vendors means fewer purchase orders, fewer inbound shipments, material handling, and fewer coordination touchpoints. Bundling materials from fewer supplier shipping points allows for optimized truckloads or more efficient LTL shipments which can result in lowering transportation costs and improving delivery reliability.
• Geographic proximity: Suppliers near your distribution centers (DCs) may cut inbound freight costs and lead‑time risk.
• Integration expertise: Engineering teams can help design packaging systems that maximize efficiency without occupying excess space. This optimized space may allow for better pallet staging, load prep, and dock flow—resulting in fewer partial loads and more efficient truck utilization.
• Validation and testing: Supplier partners with in-house design and testing labs can run International Safe Transit Association (ISTA) drop tests, simulate carrier handling, and confirm package designs meet performance targets before you scale. These proof points are critical for preventing “trial‑and‑error” headaches.

A Data‑Driven Starting Point

Not sure where to begin? Pregis packaging experts can analyze your recent shipment data, compare box-to-product dimensions, and flag waste—like lone flashlights shipping out in shoebox-size boxes. From there, the team may:

• Audit freight history to reveal DIM and cube penalties.
• Prioritize high-volume SKUs for rapid redesign and testing.
• Produce and refine right-sized solutions at facilities close to your fulfillment hubs, reducing both lead time and inbound freight.

By partnering with Pregis, you can turn those insights into leaner packaging footprints that free up rack space and trim both storage and shipping costs.

Moving Forward

Freight may be one of the most impactful line items in your budget, but it’s also one of the most controllable. By combining right‑sized packaging with strategic supplier partnerships, businesses can cut shipping spend, shrink damage rates, and unlock warehouse capacity—without compromising customer experience

Need help identifying quick wins in your freight budget? Connect with a Pregis representative today. 

Missed the first installments in our TCO blog series? Explore  Part 1 (hidden expenses),  Part  2 (impact of material choices), and  Part 3 (labor efficiencies) to see how a TCO mindset drives value across your operation.