The Manufacturer's Guide to Inbound Freight Management

Here’s a question most manufacturers don’t think to ask: who’s controlling your inbound freight?

If the answer is “our suppliers,” you’re probably overpaying by 15-30%. When suppliers ship your materials prepaid-and-add, they’re choosing the carrier, negotiating the rate, and adding the cost (plus a markup) to your invoice. You have zero visibility into whether that rate is competitive.

Taking control of inbound freight is one of the highest-ROI logistics changes a manufacturer can make. Here’s how to do it.

The problem with prepaid-and-add

Prepaid-and-add means the supplier arranges shipping, pays the carrier, and adds the freight cost to your invoice. It’s the default for most buyer-supplier relationships because it’s simple.

But simple isn’t cheap.

Supplier markups. Many suppliers add 10-25% to the actual freight cost. It’s a profit center for them. You can’t verify the markup because you never see the carrier invoice.

No carrier optimization. Your supplier uses their carrier, not the best carrier for the lane. They have no incentive to shop around for your shipment.

No visibility. You don’t know when materials are shipping, which carrier is moving them, or when they’ll arrive. You find out when the truck shows up at your dock.

No consolidation. If you buy from three suppliers in the same region, each one ships independently. Those three separate LTL shipments could potentially be consolidated into one, saving money on all three.

Inconsistent scheduling. Deliveries arrive randomly because each supplier ships on their own timeline. Your receiving dock gets overwhelmed some days and sits empty others.

What a collect freight program looks like

In a collect freight program, you take control of inbound shipments. Here’s the operational model:

1. Supplier places an order with you (or you place a purchase order with the supplier).

2. When the order is ready to ship, the supplier notifies you with the shipment details: weight, dimensions, piece count, and when it will be ready for pickup.

3. You book the carrier using your rates, your preferred carriers, and your scheduling preferences.

4. The carrier picks up from the supplier and delivers to your facility on your schedule.

5. You pay the carrier directly at your negotiated rate.

The key change: you’re choosing the carrier and the timing instead of the supplier.

Setting up a collect freight program

Step 1: Analyze your current inbound spend

Before making changes, understand what you’re paying now. Pull 6-12 months of supplier invoices and extract the freight charges. Look at:

• Total inbound freight spend
• Freight cost by supplier
• Average cost per shipment
• Which suppliers are your highest-volume inbound lanes

For most manufacturers, inbound freight is 40-60% of total freight spend but gets far less management attention than outbound.

Step 2: Set up routing instructions

Create a routing guide that tells suppliers exactly how to ship your orders. Include:

• Your preferred carriers (primary and backup)
• Booking procedures (phone number, email, or platform login)
• Required lead time for pickup scheduling
• Packaging and labeling requirements
• Your receiving dock hours and appointment requirements
• Contact information for your shipping/logistics team

Keep it simple. The easier it is for suppliers to follow, the better compliance you’ll get.

Step 3: Communicate with suppliers

Roll this out in phases, starting with your highest-volume suppliers. Frame it as a win for them:

• They no longer need to arrange and pay for freight
• They don’t need to manage BOLs for your shipments
• They don’t deal with freight claims on your orders
• Their invoicing is simpler (no freight charges to calculate)

Most suppliers welcome this. Freight management is overhead for them. A few may push back because they lose the markup revenue. Be firm but reasonable. You’re the customer.

Step 4: Schedule receiving

One of the biggest benefits of controlling inbound freight is scheduling deliveries. Instead of trucks showing up randomly:

• Schedule deliveries during specific windows
• Spread arrivals across the day to keep the dock manageable
• Prioritize urgent materials for earlier delivery slots
• Coordinate deliveries with production schedules

This reduces dock congestion, improves labor efficiency, and ensures critical materials arrive when needed.

Calculating the ROI

Let’s run the numbers for a manufacturer spending $300,000/year on inbound freight through prepaid-and-add arrangements.

The management overhead for a collect freight program is typically 0.5-1.0 FTE, depending on shipment volume. At $50,000-$65,000 fully loaded, the net savings are still $43,000-$73,000 per year.

With a freight management platform that automates quoting, booking, and tracking, the management overhead drops significantly, increasing your net savings.

Common pitfalls

Incomplete supplier compliance. Some suppliers will keep shipping prepaid unless you actively enforce the routing guide. Follow up on non-compliant shipments and address issues quickly.

Not tracking the savings. Measure your actual inbound freight costs before and after the switch. Without data, you can’t prove the ROI or identify further improvements.

Ignoring small suppliers. The 80/20 rule applies. Focus on your top 10-15 suppliers first. Small, infrequent suppliers may not be worth the management effort.

How FreightSimple helps

FreightSimple makes it easy to manage inbound freight alongside your outbound shipments. Get instant quotes for supplier pickups, book with guaranteed pricing, and track everything from one platform. No separate accounts or portals for each carrier.

Start managing your inbound freight and stop overpaying for supplier shipping.