Common Logistics Myths That Cost Businesses Money
- Danyul Gleeson
- 3 days ago
- 9 min read
Logistics has a branding problem.
Everyone thinks it’s just “shipping” until they open a spreadsheet and realise their profit is quietly leaking out through detention fees, rework, failed deliveries, excess inventory, and a thousand tiny decisions no one thought to question.
Logistics is less like a delivery service and more like a building’s wiring.
When it’s done well, nobody notices.
When it’s done badly, you don’t get a polite warning. You get sparks, smoke, and a smell that makes you say, “That’s probably fine”… right before it definitely isn’t.
And here’s the uncomfortable truth: most of the damage doesn’t come from disasters.It comes from myths. Sensible-sounding beliefs that feel safe, get repeated, and slowly drain margin.
So what are the most common logistics myths that quietly increase cost?
The ones that don’t look dramatic on day one.
The ones that feel reasonable.
The ones that only show up later - in margin erosion, service failures, and invoices nobody budgeted for.
These are the logistics myths that cost businesses money, not because they’re reckless… but because they’re widely believed.
Before we start dismantling them, a quick scale check:
US business logistics costs have been estimated at $2.3 trillion, roughly 8.7% of GDP. Logistics isn’t overhead - it’s economic gravity.
In ecommerce, the last mile can account for more than 53% of total shipping costs, making it both the most expensive and most fragile stage.
Retail returns were projected at $890 billion in 2024, with 16.9% of sales coming back through the system.
If your logistics model is built on myths, it doesn’t average out.
It invoices you.
Common Logistics Myths That Cost Businesses Money
Myth 1: “Cheapest freight = best logistics decision”
This myth survives because it’s tidy. A number. A line item. A sense of control.
It’s also one of the fastest ways to lose money quietly.
Cheap freight often arrives with invisible companions:
missed cut-offs and rolled sailings
weak scan discipline
limited exception handling
claims friction
delivery failures and reattempt costs
The cheapest quote rarely reflects the total cost to serve.
It reflects the narrowest cost someone chose to price.
This is why freight decisions only make sense when you understand where hand-offs occur, who owns them, and how failure gets handled – not just who quoted the lowest rate.
Cheap without predictability isn’t efficiency.
It’s volatility with a discount sticker.
Why it’s costly:
Because you end up “saving” a few dollars on the rate while bleeding thousands in missed SLAs, rework, and churned customers who never show up in the freight spreadsheet.
Myth 2: “Once it leaves the factory, it’s basically sorted”
This is where optimism goes to die.
Most logistics failures don’t happen while freight is moving.
They happen when responsibility changes hands:
factory to truck
truck to consolidation hub
terminal to carrier
carrier to broker
broker to warehouse
warehouse to courier
Every hand-off is a moment where:
data can drift
paperwork can break
accountability can blur
and delays can start quietly
Your shipment isn’t “sorted” when it departs.
It’s just entered the part of the journey where more people can accidentally ruin your week.
This is why hand-offs, not transport modes, are where cost usually leaks first.
Why it’s costly:
Because you outsource the thinking as well as the doing, so small issues compound into claims, write‑offs, and reputational damage long before anyone in your business sees a clean report.
If you want to see exactly where those “sorted” shipments actually fall apart, Every Hand-Off in a Modern Supply Chain (And Where It Breaks) walks through each hand‑off, what fails, and what “good” really looks like.
Myth 3: “Visibility means we’re in control”
A tracking link is not control.It’s narration.
If your visibility only tells you something went wrong after it already happened, you didn’t have control. You had a notification.
Visibility is knowing a shipment missed a cut-off.Control is knowing early enough to rebook, reroute, or intervene before cost and delay are locked in.
If your logistics data explains yesterday very clearly but can’t change tomorrow, it’s not a management tool. It’s a history lesson with better graphics.
Why it’s costly:
Because you treat systemic design problems like a customer‑service drama, so you burn relationships, waste leadership time, and never fix the upstream settings that are actually driving the failures.
Myth 4: “Last mile is just a courier problem”
Last mile is the most human stage of logistics.
Human stages are… creatively unpredictable.
It’s also the most expensive.
Industry research consistently shows last mile delivery accounting for over 50% of total shipping costs in many B2C models.
That means every avoidable issue here costs more than you think:
address errors
unclear delivery instructions
packaging failures
inaccurate ETAs
failed delivery attempts
Last mile problems rarely start with the courier.
They usually start upstream – with fulfilment design, packaging choices, address quality, and service promises that never accounted for real-world behaviour at the door.
If you don’t design the last mile, it designs your margin for you.
If you want the full breakdown of why the doorstep is the most expensive 10 metres in your supply chain, Why Is Last Mile Delivery So Challenging? goes deep on the operational pain points and fixes.
Myth 5: “Returns are annoying, but they’re just the cost of doing business”
Returns aren’t annoying. They’re expensive.
They’re a full supply chain running in reverse, with more handling, less resale value, and higher operational friction.
With 16.9% of retail sales coming back through the system, returns now hit:
transport spend
warehouse labour
inventory accuracy
working capital
write-offs and refurbishment
fraud exposure
Returns aren’t the opposite of sales. They’re part of the same system.
If you don’t design them together, one will quietly sabotage the other.
Why it’s costly: Because every “quick fix” hire hides broken processes, so your cost‑to‑serve creeps up, your best people burn out doing manual workarounds, and you still don’t get consistent outcomes.
If returns are quietly wrecking your P&L, Should You Charge for Return Shipping? digs into how policies, customer behaviour, and post‑holiday chaos actually drive return costs (and what to change first).
Myth 6: “Inventory is an asset, so more is safer”
Inventory feels comforting. You can see it. Count it. Walk past it and feel prepared.
It’s also money that can’t move.
Once you factor in capital, storage, insurance, handling, shrink, and obsolescence, inventory carrying costs are often estimated at around a quarter of inventory value per year.
“Just hold more stock” isn’t a safety plan.It’s a subscription to cost.
Inventory only feels safe when you ignore where it sits, how long it stays there, and how often it needs to move again.
Why it’s costly:
Because you confuse activity with control, so you miss the silent money leaks in dwell time, mode choice, and exception handling that never show up in a tidy weekly “on time” percentage.
If “just hold more stock” is the unofficial strategy, Inventory Chaos, Tamed shows how to redesign inventory so it protects service without quietly torching carrying cost and cashflow.
Myth 7: “If it cleared customs, we’re compliant”
Clearance is permission to move.
It’s not immunity.
Compliance risk often arrives later – through audits, post-clearance reviews, or questions that surface months after the freight landed.
Defensible compliance isn’t luck.
It’s consistency: classification logic, valuation discipline, clean documentation trails, and governance that holds up under scrutiny.
If your compliance story relies on “we’ve never been stopped,” it’s not a strategy. It’s a countdown.
Why it’s costly:
Because you treat the contract like handcuffs instead of a live operating document, so you leave renegotiation, re‑design, and performance levers untouched while conditions and volumes change around you.
Myth 8: “Packaging is a branding detail, not a logistics lever”
Bad packaging is expensive in slow, boring ways:
damage claims
dimensional weight penalties
wasted cube
higher last mile costs
increased return rates
Packaging isn’t decoration.
It’s logistics engineering.
Why it’s costly:
It influences transport cost, handling speed, damage risk, and customer experience all at once. It’s one of the cheapest places to win or lose margin without noticing.
Myth 9: “We’ll fix it with a dashboard”
Dashboards don’t fail because the data is wrong.
They fail because the decision arrives too late.
If a KPI only sparks discussion after the cost is already locked in, it’s not management. It’s commentary. Metrics don’t fix logistics. Decisions do. Dashboards should accelerate action, not decorate meetings.
Why it’s costly:
Because every month you delay, you scale the leakage too, turning what could have been a series of cheap tweaks into a seven‑figure remediation project you have to do under pressure.
If you suspect the cheapest freight is costing you the most, The Hidden Costs of Poor Freight Management breaks down where margin really leaks beyond the rate cardb- detention, rework, “urgent” fixes, and all.
The myth-proof way to think about logistics
Here’s the mental flip that saves money:
Freight is a transaction. Logistics is a system.
Cost is visible. Cost-to-serve is the truth.
Movement is easy. Coordination is hard.
The biggest losses don’t arrive loudly. They drip.
If your supply chain feels “fine,” ask one dangerous question:
What are we paying for that we’ve normalised?
That’s usually where the money is hiding.
Where Transport Works fits
Transport Works shows up where these myths tend to live – in the gaps between teams, partners, data, and accountability.
As a Logistics Facilitator, we help businesses build an end-to-end control layer so logistics stops being a chain of hopeful hand-offs and starts behaving like a system you can actually steer.
Less noise.
Fewer surprises.
More control where it matters.
FAQs: Common Logistics Myths That Cost Businesses Money
What are the most common logistics myths that increase costs?
The most expensive logistics myths are the ones that feel reasonable.
Common examples include believing the cheapest freight rate is the best decision, assuming shipments are “sorted” once they leave the factory, mistaking visibility for control, treating last mile and returns as separate problems, and assuming more inventory equals less risk.
These beliefs often lead to higher cost-to-serve, service failures, and delayed decision-making rather than immediate, obvious breakdowns.
Why does focusing on the lowest freight cost often backfire?
The lowest freight rate usually reflects only the cost of transport, not the total cost of delivery.
Missed cut-offs, rolled shipments, poor exception handling, delivery failures, reattempts, and claims friction can quickly outweigh any upfront savings. Logistics decisions that optimise for price alone tend to introduce volatility, which is far more expensive than predictable, slightly higher rates.
How do logistics hand-offs contribute to hidden costs?
Every hand-off in a supply chain introduces risk.
When responsibility moves between suppliers, carriers, terminals, customs brokers, warehouses, and couriers, data can drift, documents can break, and accountability can blur. Most logistics cost leakage doesn’t occur during movement, but in the pauses between parties where no one clearly owns the outcome.
Why is last mile delivery such a major cost driver?
Last mile delivery combines high labour costs, low drop density, tight delivery windows, and customer-driven variability.
Industry research shows the last mile can account for over 50% of total shipping costs in many ecommerce models. Failed delivery attempts, poor address data, and unclear delivery instructions amplify these costs, making last mile a design problem rather than just a courier issue.
How can businesses avoid falling for costly logistics myths?
Businesses avoid costly logistics myths by treating logistics as a system, not a series of transactions.
That means designing clear ownership at every hand-off, using milestones that enable early intervention, managing total cost-to-serve instead of isolated line items, and aligning data, decisions, and accountability. The goal isn’t eliminating disruption, but catching problems early enough that they stay cheap.
Myths are comforting because they simplify complexity.
Logistics doesn’t reward comfort.
It rewards clarity.
The businesses that win aren’t the ones with the loudest shipping promises.
They’re the ones who quietly removed the myths from their operating model.
Transport Works. Because Your Supply Chain Won’t Fix Itself.
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
Council of Supply Chain Management Professionals (CSCMP) State of Logistics Report Reports total U.S. business logistics costs at approximately USD $2.3 trillion, representing around 8.7% of GDP, underscoring the economic impact of logistics inefficiencies. Source: CSCMP State of Logistics Report
DHL Logistics Trend Radar / Last-Mile Delivery Research Identifies last mile delivery as the most cost-intensive stage of logistics, often accounting for more than 50% of total B2C shipping costs, driven by labour intensity and delivery complexity. Source: DHL Logistics Trend Radar
Maersk Ecommerce & End-to-End Logistics Insights Analysis showing last mile delivery can represent around 53% of total shipping costs in B2C supply chains, highlighting where margin is most exposed.Source: Maersk Industry Insights
National Retail Federation (NRF) / Happy Returns Consumer Returns in the Retail Industry Estimates retail returns at approximately USD $890 billion, with around 16.9% of annual retail sales returned, illustrating the scale and cost of reverse logistics. Source: NRF Retail Returns Reports
Investopedia Inventory Carrying Costs Explained Commonly cited benchmark that inventory carrying costs can be around 20–30% of inventory value annually, including capital, storage, insurance, obsolescence, and handling. Source: Investopedia – Inventory Carrying Costs
World Bank Logistics Performance Index (LPI) Benchmarks customs efficiency, infrastructure quality, shipment reliability, tracking and tracing, and timeliness across global supply chains. Source: World Bank Logistics Performance Index
OECD Trade Facilitation & Transport Policy Studies Research into cross-border logistics complexity, documentation requirements, and the economic cost of poor coordination between supply chain stakeholders. Source: OECD Trade & Transport Publications
McKinsey & Company Global Supply Chain Disruption & Resilience Research Analysis of systemic supply chain failures, hand-off risk, decision latency, and the financial impact of fragmented logistics operations. Source: McKinsey Global Institute – Supply Chain Risk & Resilience
Gartner Supply Chain Strategy & Decision Intelligence Research Research highlighting decision latency, data fragmentation, and the gap between visibility and actionable control in modern supply chains. Source: Gartner Supply Chain Research
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