Procurement & Costs
Contracted Freight
Contracted freight refers to shipping capacity secured through long-term agreements between a company and a carrier. Rates and service levels are fixed for a set period, usually through annual tenders or RFPs. This provides price stability and guarantees capacity on critical lanes.
Why it Matters: Contracted freight is the backbone of most logistics strategies. It protects against market volatility, supports long-term partnerships, and ensures predictable costs. However, it can lack flexibility when demand fluctuates, making it essential to balance with spot or on-demand options.
