How Companies Reduce Freight Costs by Up to 22% Using SAP S/4HANA TM

The Freight Problem No One Talks About — Until It Hits the Numbers

Every quarter, the same report lands on the CFO’s desk. Logistics costs are up again not slightly, but enough to impact margins.

The logistics head already knows the reasons. Fuel costs increased. Carriers raised rates. A few urgent shipments went out at premium pricing because planning ran out of time.

But knowing the reason doesn’t fix the problem.

Most companies are still planning freight the same way they did years ago using spreadsheets, emails, and phone calls. A planner spends two to three days building a shipment plan that is already outdated before the week ends. One delay, one change, or one rejected carrier  and the entire plan falls apart.

This is not a small leak. It is continuous cost loss.

According to the CSCMP State of Logistics Report (2025), U.S. logistics costs reached $2.58 trillion, accounting for 8.8% of GDP  now the new normal, not an exception. In manufacturing, a 2026 Xeneta survey found that 94% of companies exceeded their freight budgets, with an average overrun of 10%.

The real question is not whether freight costs will rise.

They will.

The real question is — is your planning process controlling costs, or quietly increasing them?

Freight Is No Longer Just a Cost — It’s a Business Strategy

Freight used to be treated as a routine expense. Negotiate once a year, accept rate increases, and move on.

That approach no longer works.

Logistics costs are now consistently higher than pre-pandemic levels. Freight rates are volatile and unpredictable. For example:

• $1,342 per 40-ft container in October 2023
• Jumped to over $5,900 by July 2024
• A 340% increase in less than a year

Even after stabilizing, rates remain significantly higher than before.

Now multiply this across:

• Multiple warehouses
• Multiple carriers
• Hundreds of shipments
• Different regions and regulations

Manual planning simply cannot keep up.

When carrier selection is based on habit instead of data, when load consolidation happens in someone’s head, and when actual costs are only known after invoices arrive the business is not managing freight.

It is absorbing inefficiency.

That’s why 77% of Chief Supply Chain Officers now rank freight cost as their top challenge.

What SAP S/4HANA TM Freight Optimization Actually Means

In simple terms, SAP S/4HANA TM helps you plan shipments in the most cost-effective way  automatically.

Instead of relying on manual decisions, the system:

• Selects the best carrier
• Optimizes routes
• Combines shipments efficiently
• Calculates real costs in advance

For example:
Instead of a planner choosing a carrier based on past experience, the system automatically selects the lowest-cost option that still meets delivery timelines.

The result:

• Lower cost
• Faster planning
• Better visibility

No guesswork. No manual dependency.

The Daily Challenges Logistics Teams Face

These are the exact problems we hear from logistics leaders:

• “We don’t know why freight costs keep increasing.”
• “Planning takes 2–3 days every week in Excel.”
• “We don’t have real-time shipment visibility.”
• “We may be overpaying carriers, but we can’t prove it.”
• “Each warehouse works differently — no single view.”
• “As we grow, planning becomes more chaotic.”

All of this points to one issue:

Freight planning has not evolved with the business.

And when planning stays manual, every new shipment adds more complexity — and more cost.

Who Should Consider SAP TM Freight Optimization

This is not for every company. It is for businesses where logistics is becoming a major cost driver.

You should consider it if:

• You operate multiple warehouses or distribution centers
• Logistics cost is rising above 8–10% of product cost
• Planning is still manual (Excel, email, calls)
• You already use SAP S/4HANA
• You manage multiple carriers without clear comparison
• Delivery commitments are becoming harder to meet

If 2–3 of these apply, there is already cost leakage.

Manual Planning vs SAP TM — The Real Difference

This is not a small improvement.

It is a completely different way of working.

Real Case Study — 22% Freight Cost Reduction

Client Profile

• Industry: Industrial Manufacturing
• Region: USA
• Revenue: ~$180M
• Freight Orders: 400+ per month

Before SCM CHAMPS

• Planning fully manual
• 2.5 days per cycle
• Freight cost increasing (18% YoY)
• Trucks underutilized
• Carrier selection based on relationships
• On-time delivery: 78%
• Invoice reconciliation: manual and time-consuming

What SCM CHAMPS Implemented

• Centralized freight planning in SAP TM
• Automated carrier selection based on cost + performance
• Load consolidation rules to maximize truck utilization
• Real-time dashboards for cost and delivery tracking
• Integration with SAP EWM and SAP SD

Results (Within 6 Months)

The cost savings alone paid back the investment in under 9 months.

How SCM CHAMPS Delivers These Results

We follow a simple 3-step approach:

1. Assess

• Identify where money is leaking
• Review planning process
• Analyze carrier usage and rates
• Find integration gaps

2. Configure

• Set up SAP TM based on real business needs
• Automate carrier selection
• Define routes and load rules
• Enable automated tendering

3. Optimize

• Automate repeat scenarios
• Track KPIs (cost, delivery, performance)
• Integrate with SAP EWM, SD, FI
• Continuously improve performance

What Results You Can Expect

Based on real implementations:

• 18–25% reduction in freight cost
• 60–70% reduction in planning time
• 90–95% on-time delivery
• Full visibility across operations
• ROI within 9–12 months

The Cost of Doing Nothing

Delaying this decision has a cost.

• Freight costs will keep rising
• Manual planning will keep breaking
• Customer expectations will keep increasing

Meanwhile, competitors who automate now will:

• Operate at lower cost
• Deliver faster
• Scale without chaos

The gap will only grow.

Take the First Step

If you want to reduce freight cost and remove manual planning, SCM CHAMPS can help.

We specialize in SAP S/4HANA TM implementations for manufacturers and distributors, with a clear focus on measurable results.

Get Started:

• Book a free consultation
• Get a freight cost assessment
• See a live demo

No generic pitch. Just a practical discussion about your current challenges and opportunities.