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Freight Consolidation Saving Calculator

Work out freight consolidation saving instantly with clear inputs, formula shown and shareable results.

About Freight Consolidation Saving Calculator

Consolidating shipments does not remove the full cost of each shipment eliminated, because a consolidated load is larger and costs more — roughly 70% of the removed shipments' cost is saved. That gross saving must then be netted against the extra inventory the less frequent deliveries create.

Formulas

Gross freight saving

Saving = Shipments removed x Cost per shipment x 70%

Net saving

Net = Gross freight saving - Additional inventory holding cost

Worked example

With the default values below, Freight Consolidation Saving Calculator returns Net monthly saving of $1,074,400.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Shipments per month
64
Average cost per shipment
42,000
Shipments consolidated into one
3
Additional monthly inventory holding cost
180,000

Results

Net monthly saving
$1,074,400.00
Gross freight saving
$1,254,400.00
Consolidated shipment count
21.3
Annualised net saving
$12,892,800.00

Step by step

  1. 1Values used
  2. 2Gross freight saving
  3. 3Net saving
  4. 4Net monthly saving= 1,074,400.00
  5. 5Gross freight saving= 1,254,400.00
  6. 6Consolidated shipment count= 21.3
  7. 7Annualised net saving= 12,892,800.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Why only 70% of the removed cost?

Because freight rates are not purely per-shipment; a heavier consolidated load costs more than a light one. The fixed element is what you actually save.

When does consolidation not pay?

When the goods are high-value or perishable, so the inventory holding cost of less frequent delivery exceeds the freight saving.

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