What does “cheap, fast, or good” mean in logistics?

It’s the logistics version of the iron triangle: you can optimise for two of the three (cheap, fast, good) but the third will suffer. In real networks, trying to force all three usually creates service failures that reappear as refunds, rework, expediting, and churn.

What is DIFOT and why does it matter?

DIFOT (Delivered In Full, On Time) measures whether orders arrive exactly as promised. It matters because it correlates directly to availability, customer trust, and the real cost-to-serve. When DIFOT slips, the whole operation starts paying interest.

Is delivery reliability more important than delivery speed now?

Increasingly, yes. Research shows consumers are willing to trade a bit of speed for confidence that parcels arrive on time within the promised window. Predictable beats “fast-ish” when it protects trust and reduces failures.

How should businesses choose between cheap, fast, and good logistics?

Treat it as a network design decision. Prioritise Fast + Good for customer-facing ecommerce, promotions, and time-sensitive products. Use Good + Cheap for predictable replenishment lanes with aligned expectations. Treat Fast + Cheap as a tactical exception, not a strategy.

Cheap, Fast or Good? Why Cheap Freight Is Quietly Taxing Your Supply Chain

Q: Why is cheap freight risky for supply chains?

Because cheap pricing often means thin capacity, weaker contingency, and higher exception rates. The savings show up on the rate card. The costs show up later in late deliveries, re-deliveries, customer support load, stockouts, and lost repeat revenue.

Danyul Gleeson
4 hours ago
8 min read

If logistics had a swear jar, “can’t we just make it cheaper?” would’ve paid for a new warehouse by now.

From Auckland 3PLs to Atlanta retailers, everyone’s under pressure to shave 5–10% off freight. Procurement sharpens the pencil. Finance sharpens the glare. Sales sharpens the promises at checkout. And somewhere in the middle, logistics is expected to magically keep things fast, flawless, and cheap.

That’s where the old rule comes back with teeth.

Cheap. Fast. Good. You still only get two.

The difference in 2026 is this: the cost of the third one you drop is now bigger, louder, and brutally well-documented across Australia, New Zealand, and the US.

This isn’t theory anymore.

It’s showing up in DIFOT, EBITDA, churn, and customer trust.

Quietly. Consistently. Expensively.

Fast, Cheap, or Good? Why Cheap Freight Is Quietly Taxing Your Supply Chain

Cheap, Fast, or Good? The Iron Triangle in Real-World Logistics

In PowerPoint, the Iron Triangle looks tidy. In a live supply chain, it behaves more like gravity. You can argue with it, but it wins every time.

Here’s how it actually plays out.

Fast & Cheap Freight: service roulette

This combo looks great when capacity is loose, fuel is calm, and labour behaves.

That is to say: almost never for long.

To keep prices low and speed high, something else gives:

Drivers are underpaid or overworked
Fleets are stretched thin
Contingency disappears
Service cracks under peak demand like BFCM, promos, or seasonal spikes

It works right up until the moment it really matters. Then it doesn’t.

Good & Cheap Freight: slow but solid

This is reliability with patience baked in.

You get:

Consistent delivery
Fewer surprises
Lower cost per unit

But you trade speed. Longer lead times. Less agility.

This works beautifully for predictable, bulk flows where inventory buffers exist and nobody’s refreshing the tracking page every 10 minutes.

Manufacturing replenishment loves this lane. Urgent ecommerce does not.

Fast & Good Freight: premium performance

High DIFOT. Tight SLAs. Proper tracking. Proactive exception management.

You’re paying for:

Priority capacity
Better tech
Networks with actual resilience

This is where ecommerce, FMCG, and retail live because delivery is no longer an operational detail. It’s part of the product.

Global shipping rates have climbed sharply again since April 2024 on key lanes. Still below pandemic insanity, yes. But high enough that “too good to be true” pricing should immediately set off alarm bells. Especially in New Zealand, where wages, compliance, tyres, and maintenance continue to rise even when diesel briefly behaves.

When freight looks impossibly cheap, someone somewhere is under-resourced. Eventually, that someone becomes you.

Fast, Cheap, or Good? What “Cheap Freight” Actually Costs on the P&L

Cheap freight doesn’t arrive waving a red flag. It shows up disguised as savings. Then it invoices you later.

Let’s put numbers behind the unease.

A 2025 delivery performance study found 69% of shoppers are less likely to return after just one late delivery. One. Not a pattern. Not a disaster. One miss.

Other ecommerce research shows that longer or unreliable delivery times directly reduce purchase frequency, especially for cross-border orders.

Add to that:

Higher refunds
More chargebacks
A spike in “Where is my order?” tickets

None of those line items live on your carrier rate card.

Now overlay the common procurement move:

Save 5–10% by switching to the lowest-cost carrier
DIFOT slips from 97–98% to 92–93%

That sounds fine in a meeting until you do the maths. That’s 7–8 disappointed customers out of every 100 orders. Every day. At scale.

Each percentage point of DIFOT loss compounds into:

Re-deliveries
Extra handling
Overtime
Stockouts
Lost shelf availability
Lost revenue

An ANZ FMCG case study showed that improving DIFOT lifted on-shelf availability from 87% to 98%, reduced expedited freight, cut waste, and added roughly 3% to EBITDA in under 12 months.

That wasn’t branding. That was execution.

Chase cheap freight hard enough and you quietly reverse those gains.

Fast, Cheap, or Good? DIFOT Is the KPI That Doesn’t Lie

DIFOT (Delivered In Full, On Time) is where logistics storytelling ends.

You can game cost-per-kilometre. You can massage average transit times. You cannot talk your way around DIFOT.

For retailers and FMCG, high DIFOT means:

Fewer stockouts
Better on-shelf availability
Consistent sales

For manufacturers:

Stable production lines
Fewer panic buys
Less premium inbound freight

This is why Transport Works treats DIFOT as a board-level metric, not an ops curiosity. It’s the scoreboard for whether your network is actually working.

High DIFOT equals fewer disruptions, tighter cost control, and calmer teams.Low DIFOT equals firefighting, bloated safety stock, margin erosion, and customers quietly losing faith.

You don’t feel it all at once. You feel it like a slow leak.

Fast, Cheap, or Good? Customer Expectations Have Changed (Again)

Post-pandemic, “fastest possible” delivery has lost its shine. Reliability has taken its place.

In the US, consumer research shows predictability now outranks raw speed. Average ecommerce delivery times dropped from around 6.5 days in 2020 to roughly 3.7 days by late 2024, a 43% improvement. That reset what “normal” feels like.

In Australia and New Zealand, shopper sentiment consistently points to frustration with:

Missed ETAs
Poor tracking
Overseas delays

Customers don’t need magic.

They need honesty.

Fast enough.

Predictable.

No surprises.

When you buy Fast & Cheap from an underpriced carrier, you’re betting against that psychology.

And here’s the kicker: it’s not just humans judging you anymore.

AI-driven recommendation systems increasingly factor in reviews, complaints, and delivery sentiment. Poor logistics doesn’t just lose an order. It quietly teaches the algorithm to prefer someone else.

Fast, Cheap, or Good? Total Cost to Serve Tells the Whole Story

This is where grown-up supply chains separate from spreadsheet theatre.

Total Cost to Serve includes:

Linehaul and last-mile freight
Warehouse labour and overtime
Inventory holding costs
Customer service workload
Refunds, churn, and lost lifetime value

Cost per pallet tells you none of that.

According to Gartner, businesses that shift from pure rate-chasing to value-based logistics procurement can improve logistics ROI by 30–37% over two years. Not by squeezing carriers harder, but by reducing disruption and volatility.

A carrier that’s 7% more expensive but delivers 4–5 points higher DIFOT is often the cheapest option you’ll ever buy.

Fast, Cheap, or Good? Use the Triangle as a Design Tool

The Iron Triangle doesn’t disappear. But you can stop being ambushed by it.

Prioritise Fast & Good when:

Ecommerce and D2C are core to your brand
Products are perishable or time-sensitive
Promotions and peak events matter

Here, delivery failure is revenue failure.

Choose Good & Cheap when:

Lanes are predictable
Lead times are long
Customers are aligned on slower delivery

This only works when expectations are explicit and honest.

Treat Fast & Cheap as a warning label

It usually means:

Underpriced risk
Fragile networks
No margin for error

Fine for tactical spot moves. Dangerous as a strategy.

Fast, Cheap, or Good? This Is a Leadership Decision

At this point, this isn’t a freight problem.

CEOs want growth.

CFOs want predictability.

COOs want fewer 2am phone calls.

High DIFOT, sensible service levels, and realistic pricing sit right where those goals overlap. ANZ case studies repeatedly show that when leaders stop chasing cheap optics and start managing delivery performance, they unlock margin, reduce waste, and stabilise operations.

Choosing cheap over Fast & Good isn’t savings. It’s deferred cost with interest.

Fast, Cheap, or Good: FAQs

What does “Fast, Cheap, or Good” actually mean in logistics?

In logistics, Fast, Cheap, or Good refers to the Iron Triangle of freight performance. You can optimise for two of the three, but never all three at the same time. Fast and cheap usually sacrifices reliability. Cheap and good usually sacrifices speed. Fast and good delivers the best customer outcomes, but at a higher cost. The mistake most businesses make is pretending the triangle doesn’t apply to them.

Why is cheap freight risky for supply chains?

Cheap freight often shifts cost rather than removing it. Lower rates frequently result in poorer DIFOT performance, missed delivery windows, higher re-delivery costs, increased customer service workload, and lost repeat revenue. The savings appear in the transport budget, but the damage shows up later in churn, refunds, overtime, and margin erosion.

How does cheap freight impact DIFOT performance?

Cheap freight usually relies on under-resourced networks with limited contingency. When volumes spike or disruptions occur, DIFOT performance drops quickly. Even a 3–5% reduction in DIFOT can translate into stockouts, late deliveries, and dissatisfied customers across ecommerce, retail, and FMCG supply chains. DIFOT is the KPI that exposes whether low-cost freight is actually sustainable.

What is DIFOT and why is it so important in logistics?

DIFOT stands for Delivered In Full, On Time. It measures whether goods arrive exactly as promised, without shortages or delays. DIFOT is critical because it directly affects on-shelf availability, production continuity, customer trust, and revenue. High DIFOT reduces expediting, waste, and firefighting. Poor DIFOT quietly taxes every part of the supply chain.

Is fast delivery still more important than reliable delivery for customers?

Not anymore. Recent ecommerce data shows customers now prioritise reliability and predictability over pure speed. Fast enough delivery that arrives when promised consistently outperforms faster delivery that misses expectations. A single late or poorly handled delivery can permanently damage customer loyalty, even if the shipping price was low.

Why is “cheapest carrier wins” a flawed procurement strategy?

Cheapest carrier wins focuses on freight rates while ignoring DIFOT, volatility, and customer impact. This often leads to higher operational costs, margin leakage, and brand damage. Value-based logistics procurement balances price with service reliability, risk, and total cost to serve, delivering better long-term financial performance.

How should businesses choose between fast, cheap, and good logistics?

The decision should be strategic, not tactical. Businesses should segment products and lanes by customer impact, time sensitivity, and risk. High-value or customer-facing flows should prioritise Fast and Good. Predictable, non-urgent flows can prioritise Good and Cheap. Fast and Cheap should be treated as a short-term exception, not a network design principle.

When does cheap freight actually make sense?

Cheap freight can work for predictable, low-urgency, bulk movements where lead times are long and inventory buffers exist. Examples include manufacturing replenishment or stable B2B lanes with agreed service expectations. It becomes risky when used for time-sensitive ecommerce, promotions, perishables, or customer-facing delivery promises.

In modern supply chains across Australia, New Zealand, and the US, Fast, Cheap, or Good is no longer a slogan.

It’s a measurable equation with very real upside and downside.

The cheapest freight you buy this quarter might be the most expensive decision on your balance sheet next year.

Transport Works. Because your supply chain won’t fix itself.

Let's Chat

Insights from Danyul Gleeson, Founder & Logistics Chaos Tamer-in-Chief at Transport Works

Danyul has been in the trenches - warehouses where pick paths were sketched on pizza boxes and boardrooms where the “supply chain strategy” was a shrug. He built Transport Works to flip that script: a 4PL that turns broken systems into competitive advantage. His mission? Always Delivering - without the chaos.

Sources and References

Delivery performance, customer behaviour, and repeat purchase

PwC – Experience Is Everything: Here’s How to Get It Right Consumer research showing delivery experience as a key driver of repeat purchasing and brand loyalty.
McKinsey & Company – The New Rules of E-commerce Delivery Analysis on delivery speed vs reliability and the commercial impact of service failures.
Parcel Perform – E-commerce Delivery Benchmark Reports (US, AU, NZ)Data on late deliveries, customer dissatisfaction, and post-purchase behaviour.

DIFOT, on-shelf availability, and financial impact

Deloitte – On-Time, In-Full: Why OTIF Still Wins in Supply Chains Links delivery performance to retail availability, revenue protection, and operational efficiency.
Australian Food & Grocery Council – Supply Chain Performance & Availability Studies ANZ-specific insights into DIFOT, shelf availability, and cost leakage in FMCG networks.
GS1 – OTIF and DIFOT Best Practice Guidelines Industry frameworks for measuring and improving delivery performance.

Total cost to serve and logistics ROI

Gartner – Reframing Logistics Procurement Around Value, Not Cost Research showing 30–37% logistics ROI improvement when shifting from rate-only decisions to value-based procurement.
BCG – Total Cost to Serve: The Metric That Changes Supply Chains Breakdown of how hidden logistics costs erode margin when service volatility increases.
MIT Center for Transportation & Logistics – Supply Chain Cost-to-Serve Models Academic research linking delivery reliability, inventory buffers, and true network cost.

Global freight rates, capacity, and market pressure

Drewry – World Container Index & Freight Market Updates Data on post-pandemic rate increases and ongoing volatility on major trade lanes.
UNCTAD – Review of Maritime Transport Global shipping cost trends and their downstream impact on supply chains.

AI, reviews, and delivery sentiment

Harvard Business Review – How Delivery Failures Damage Customer Lifetime ValueAnalysis of how operational failures affect brand perception and future demand.
Google – Consumer Trust & Review Signals in Search and Discovery Documentation and commentary on how reviews and customer feedback influence visibility and recommendations.