Freight procurement: the category nobody owns

US business logistics costs reached $2.58 trillion in 2024, according to the CSCMP State of Logistics Report. That is 8.8% of GDP. Transportation alone accounted for $896 billion in 2022. And in most organizations, procurement never touches it.

Freight is the largest unmanaged spend category in American business. Not because it is small. Because nobody owns it. Procurement buys materials. Logistics moves them. The gap between those two functions is where the margin leaks.

The organizational wall that blocks freight from procurement

The split is structural. Gartner data shows 38% of chief procurement officers report to the CFO, 20% to the chief supply chain officer, and 19% to the head of operations. When procurement and logistics report to different executives, freight falls into the gap. Procurement focuses on what it can measure: unit prices, payment terms, rebates. Logistics manages what it can control: carrier relationships, routing, mode selection.

Neither function is wrong. The problem is that they operate independently. Procurement negotiates a 3% price reduction on a raw material. Logistics pays 15% above market on the lane that moves it. The net result is worse than if neither had negotiated at all.

A Keelvar analysis of logistics procurement practices found that most organizations treat freight as an operational expense managed by logistics teams, not as a strategic procurement category. The annual freight RFP — when it happens — is run by logistics, not procurement. The structured sourcing discipline that procurement brings to direct materials never reaches the freight budget.

The real cost of not managing freight strategically

Ocean freight rates in 2026 remain 20-50% above pre-COVID levels, according to FreightAmigo data. Fuel represents 20-30% of total freight cost, and fuel surcharges fluctuate weekly. A procurement team that negotiates fuel surcharge formulas the way it negotiates raw material index clauses can save 3-5% on every shipment. Most do not even know the formula exists.

The annual freight RFP — still the dominant model in most organizations — locks in rates for 12 months in a market that moves weekly. The Freightos analysis of mini-bid strategies found that shippers who moved from annual RFPs to quarterly mini-bids captured 5-8% savings simply by aligning contract timing with market conditions. Procurement's category management framework is built for exactly this. Logistics teams rarely apply it.

The Freightos mini-bid model: procurement's natural entry point

The mini-bid strategy breaks the annual RFP into smaller, more frequent sourcing events for specific lanes. Instead of locking 200 lanes into 12-month contracts, a shipper runs quarterly mini-bids on the 40 lanes where rates are most volatile. Carriers compete on shorter commitments. The shipper captures market dips. The logistics team maintains operational continuity.

This is category management applied to transportation. The same skills procurement uses for direct materials — supplier segmentation, market-informed negotiation, contract flexibility — transfer directly to freight. The difference is that procurement already has the framework. Logistics has the operational knowledge. Neither has both.

What this means in practice

• Map freight spend before touching a single carrier contract. Most organizations cannot answer the question "what did we spend on freight last year by mode and by lane?" A one-month spend analysis — pulling data from accounts payable, TMS, and carrier invoices — is the prerequisite for any sourcing strategy. Without it, you are negotiating blind.
• Embed one procurement professional in the logistics team for 90 days. Their job is not to take over. It is to learn the operational requirements — lane characteristics, service level expectations, carrier performance history — and identify where procurement's sourcing discipline can add value. The 90-day embed produces a freight category strategy that neither function could write alone.
• Start with a pilot: 20 lanes, quarterly mini-bids. Pick the lanes with the highest spend volatility. Run a mini-bid with procurement managing the RFP structure and logistics defining the service requirements. Measure the savings against the same lanes from the prior quarter. A 5-8% improvement on 20 high-volume lanes builds the case for expanding the model.
• Track total landed cost, not freight rates in isolation. A lower freight rate that adds three days of transit time increases inventory carrying cost and puts production schedules at risk. Procurement's category management framework captures total cost. Apply it to every carrier decision.