Freight

Inventory & Logistics

Definition

The transport of goods and the charge for that transport.

Explanation

Freight cost and mode (air, sea, road, rail) trade speed against price and emissions. Freight is a significant, negotiable spend category and a key part of landed cost, often optimised through consolidation and carrier sourcing.

Example

Switching from air to sea freight cuts transport cost 70% at the price of a longer lead time.

Related terms

Logistics — The management of the movement and storage of goods — transport, warehousing, handling and delivery.
Landed Cost — The total cost of a product delivered to the buyer's door, including price, freight, insurance, duties and handling.
Incoterms — Standard international trade terms defining who is responsible for shipping, insurance, duties and risk at each point of a delivery.
Freight Consolidation — Combining multiple shipments into fewer, fuller loads to cut transport cost per unit.

Frequently Asked Questions

What is Freight?

The transport of goods and the charge for that transport. Freight cost and mode (air, sea, road, rail) trade speed against price and emissions. Freight is a significant, negotiable spend category and a key part of landed cost, often optimised through consolidation and carrier sourcing.

Can you give an example of Freight?

Switching from air to sea freight cuts transport cost 70% at the price of a longer lead time.

Back to the procurement glossary | Procurement concepts | Contact us