Why Does Shipping and Handling Cost So Much? | Lojistic [ ](https://www.lojistic.com)- Why Lojistic - [ All Inclusive. Zero Cost. Every Lojistic solution. No limits. No fees. ](https://www.lojistic.com/pricing) - [ All Modes. All Carriers. All Currencies. 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Zero Cost. Every Lojistic solution. No limits. No fees. ](https://www.lojistic.com/pricing) - [ All Modes. All Carriers. All Currencies. Parcel, LTL, truckload, ocean, rail, air freight. ](https://www.lojistic.com/carrier-connectors) - [ Industries Served Retail, eCommerce, 3PL, manufacturing, and more. ](https://www.lojistic.com/industries-served) - [ Roles Most Impacted & How Supply chain & logistics, procurement, finance leaders. ](https://www.lojistic.com/roles-most-impacted) - [ Use Cases How Lojistic helps manage and reduce shipping costs. ](https://www.lojistic.com/use-cases) - Platform Features - [ Global Analytics & Reporting Predictive analytics and scenario modeling for all carriers globally. ](https://www.lojistic.com/shipping-analytics-software) - [ Rate Optimization & RFPs Tech-powered data prep, strategy, and rate impact analyses. ](https://www.lojistic.com/rate-optimization-rfps) - [ Parcel and Freight Audit & Payment *+PAY* Carrier refunds and payments automated and made simple. ](https://www.lojistic.com/freight-audit-and-payment) - [ GL Coding & ERP Sync Automatically code shipping costs down to the order level ](https://www.lojistic.com/gl-coding-erp-sync) - [ Lojistic API & App Integrations Easily integrate normalized shipping data to your business systems. ](https://www.lojistic.com/api-app-integrations) - [Pricing](https://www.lojistic.com/pricing) - [About](https://www.lojistic.com/about) - [Company](https://www.lojistic.com/company) - [Culture](https://www.lojistic.com/culture) - [Careers](https://www.lojistic.com/careers) - [Partner Programs](https://www.lojistic.com/partner-programs) - [Security](https://www.lojistic.com/security) - [Media](https://www.lojistic.com/media) - [Ratings & Review](https://www.lojistic.com/reviews) - [Videos](https://www.lojistic.com/videos) - [Blog](https://www.lojistic.com/blog) - [Contact](https://www.lojistic.com/contact) [Create Free Account](https://app.lojistic.com/demo/connect-carrier?activeStep=create-account&trackDemo=false) [View Demo](https://app.lojistic.com/demo) [ Log In](https://app.lojistic.com/demo/account/login?trackDemo=false) Why Does Shipping and Handling Cost So Much? ============================================ ![Icon denoting blog author information in Lojistic’s content layout](/images/pages/blog/icon-author.svg)Rich Harkey ![Calendar icon used to display blog post dates on Lojistic’s website](/images/pages/blog/icon-calendar.svg)April 12, 2013 Cost is a perennial concern in everything to do with logistics. Shipping and handling costs make up a major part of the money spent on logistics by most companies in a given year, and so, many efforts are undertaken to [reduce shipping and handling costs](https://www.lojistic.com/freight-audit-and-payment) by improving contract terms and optimizing carrier relationships. However, controlling these costs is easier said than done for a number of reasons. There are many factors that work together to raise shipping and handling cost – and many of these are beyond the direct control of client companies. Here are a few reasons why shipping and handling cost is so high: **There Are Many “Moving Parts” in a Long Supply Chain** In theory, the “handling” part of shipping and handling refers to the human element in the supply chain and logistics equation. Hundreds or even thousands of individuals can be involved in moving items from one side of the planet to another. Every contributor to that process, from truck drivers and warehouse staff to shipping managers and cargo pilots, must be represented in the cost structure of shipping and handling. Companies that are lean and cost-effective, therefore, can offer [reduced rates](https://www.lojistic.com/rate-optimization-rfps) – but as complexity scales up, so does cost. \[call-to-action\]Learn how the super smart team at Lojsitic can help reduce your shipping and handling costs!\[/call-to-action\] **The Rules are Constantly Changing ... for You *and* for Them** Logistics companies and carriers have an extremely heavy regulatory burden to deal with on a daily basis. This is true virtually no matter where the company is centered or where the items are headed. International shipping is and always has been a part of the notoriously complex and often challenging customs bureaucracy. As customs requirements change, companies pass on the additional costs to customers in order to maintain an average level of solvency. Well-operated companies have analysts working constantly to [minimize the impact](https://www.lojistic.com/rate-optimization-rfps). **Shipping and Handling Can Be a Profit Center** In many cases, shipping and handling is not a key profit center for major carriers, but in the case of small carriers, it is the main source of operational income and, ultimately, revenue. Unless a firm is partnered with a major strategic player in the industry, this is an almost inevitable stage in the growth process. If you have a long supply chain that includes some smaller “boutique” and regional players, you might be paying a premium for the services that they specialize in. That’s one reason why it is important to maintain high awareness of your shipping agreements. **You Can Reduce Costs With Outside Expertise** Although it is not always possible to directly reduce the costs incurred in relation to shipping and handling, you can streamline the cost structure that you are exposed to by optimizing your logistics chain from end to end. This includes taking such steps as [evaluating invoices for human error](https://www.lojistic.com/freight-audit-and-payment), re-negotiating contracts, and using enterprise software and outside expertise to ensure that you are using the best routing and carrier selection approaches in real time. With all of these approaches working together, you can save a significant percentage of your shipping spend. ![Rich Harkey Headshot](https://www.lojistic.com/assets/public/users/rich.png) Author Rich Harkey Rich Harkey Senior Strategy Manager Rich Harkey is a results-driven professional with extensive experience in the logistics and supply chain industry. As the Senior Strategy Manager at Lojistic, Rich leverages over three decades of expertise to help businesses improve their shipping strategies and reduce costs. With a deep understanding of the requirements of shippers and the operational intricacies of carriers, he excels in everything from optimizing business rules and managing carrier invoices to negotiating carrier contracts. Rich's comprehensive knowledge of the logistics industry, combined with his strategic insights and passion for data analysis, has enabled thousands of companies to gain visibility into their shipping expenses, driving impactful results. 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