What freight questions should CEOs and CFOs ask before signing a transport contract?

Start with board-level impact questions: true end-to-end freight cost (including accessorials, redeliveries, claims and exception labour), transit time predictability (variance, not averages), DIFOT/OTIF where revenue concentrates, invoice accuracy and audit coverage, utilisation (cube and weight), exception detection and resolution speed, single points of failure, ESG exposure created by poor planning, and the one metric you would confidently put on a board slide.

What is DIFOT and why does it matter to the board?

DIFOT (Delivered In Full, On Time) measures whether orders arrive exactly as promised. Boards should care because DIFOT is not a warehouse KPI, it is revenue integrity. If DIFOT drops, the costs show up later as churn, higher customer acquisition costs, refunds, credits, and ‘mysterious’ margin erosion.

How do you calculate true freight cost-to-serve?

True cost-to-serve includes the rate card plus fuel, accessorials, minimums, redeliveries, claims, write-offs, expediting, and internal handling time for exceptions. The executive view is cost-to-serve by customer, lane, channel and node, tied back to margin so procurement cannot ‘save’ money by creating downstream costs elsewhere.

Why does transit time variability matter more than speed?

Because variability forces buffer stock, inflates working capital, normalises expediting, and reduces inventory turns. Fast without predictability becomes expensive anxiety. Measuring standard deviation and miss-rate against promised windows is what reveals the real cash impact.

How common are freight invoice errors and should you audit invoices?

Freight billing is complex, which makes leakage likely unless invoices are systematically audited. CFO-level best practice is a consistent audit process with clear rules for accessorials and surcharges, measured recovery rate, and visibility of dispute effort versus dollars recovered.

How can load utilisation reduce freight cost without hurting service?

Improving cube and weight utilisation reduces the cost of moving ‘air’ while keeping service levels intact. The practical levers are consolidation, better dispatch planning, packaging and pallet optimisation, and fixing ordering cadence so shipments combine naturally instead of fragmenting into expensive partials.

What should a board-level freight dashboard include?

Keep it ruthless: DIFOT/OTIF (and where it fails), transit time variance (CTS volatility), and fully loaded freight cost per order (or per shipment) tied to margin. Add a short note on the biggest risk lane and the biggest improvement lever. If it needs ten slides, it is not board-ready.

Freight Questions CEOs and CFOs Should Ask Before Signing the Next Transport Contract

Danyul Gleeson
1 day ago
8 min read

Every business thinks its freight is “fine”.

Until margins start leaking in places no one can quite explain.Until customer complaints don’t match the dashboards.

Until cash is tied up in stock that exists purely because nobody trusts ETAs anymore.

Freight rarely fails loudly.

It fails politely.

Quietly.

In spreadsheets that still balance and service levels that look acceptable right up until the board asks why growth feels harder than it should.

That is why freight questions for CEOs and CFOs belong in the boardroom, not buried three levels down in operations.

Because once freight decisions start shaping margin, working capital, customer churn, and ESG risk, they stop being “transport” problems and start being leadership ones.

Freight Questions CEOs and CFOs Should Ask Before Signing the Next Transport Contract

Why Freight Questions Belong in the Boardroom

Let’s anchor this in numbers, not opinion.

Logistics costs typically account for 8–10% of revenue in manufacturing and wholesale, and 12–20%+ in ecommerce-heavy businesses (McKinsey).
Poor logistics execution can erode up to 25% of gross margin through expediting, inventory buffers, write-offs, and service recovery costs (Deloitte).
Inventory tied up purely due to unreliable transport lead times can increase working capital requirements by 10–30% (Gartner).

Yet most boards still see freight as a line item, not a system.

That mismatch is how you end up with:

Sales selling speed
Marketing selling reliability
Procurement buying cheap
Operations absorbing the damage

Three strategies. One supply chain. No adult supervision.

Freight questions for CEOs and CFOs are how that contradiction finally gets resolved.

What DIFOT Really Tells You (And Why Boards Misread It)

DIFOT sounds tidy. Delivery In Full. On Time. Tick the box, move on.

Here’s the problem.

A 90% DIFOT rate means 1 in every 10 orders fails.

That is not a rounding error. That is a customer experience strategy you did not mean to choose.

Consider this:

32% of customers stop buying from a brand after just one late or failed delivery (PwC).
86% will not complain. They just leave (Esteban Kolsky).
Acquiring a new customer costs 5–7x more than retaining one (Bain & Company).

So when DIFOT slips, the impact does not show up in the warehouse.

It shows up later in CAC, churn, and “why are sales slowing?” board conversations.

DIFOT is not just a logistics KPI. It is a revenue integrity metric.

CTS Is Why “Fast” Becomes Expensive

CTS - Carrier Time Schedules - rarely gets airtime at board level, which is impressive given how much damage unstable transit times cause. Think of CTS as the ‘volatility index’ of your freight.

When CTS is inconsistent:

Planners pad lead times
Safety stock quietly inflates
Emergency freight becomes normalised
Inventory turns slow down

Gartner data shows organisations dealing with volatile transit times carry 10–30% more inventory than those with stable CTS, without delivering better service.

That excess stock is not strategic.

It exists because nobody trusts the freight network.

“Fast” without predictability is just expensive anxiety.

10 Freight Questions CEOs and CFOs Should Be Asking

These freight questions for CEOs and CFOs are not about catching people out.

They are about surfacing costs the business is already paying, just not acknowledging.

1. What Is Our True End-to-End Freight Cost?

Freight only looks cheap when you ignore the costs hiding outside the rate card. Executives should see the fully loaded P&L impact, not just the transport budget.

Freight cost to serve by customer, lane, and channel
Total spend including fuel, accessorials, redeliveries, claims, and internal exception labour
Trend of “hidden” costs (expedites, write‑offs, credits) over the last 12–24 months
Variance between budgeted vs actual total freight cost as a % of revenue

Deloitte estimates hidden logistics costs typically add 15–20% on top of reported freight spend.

If you cannot see freight cost to serve by customer, lane, and channel, you are negotiating blind.

2. How Predictable Are Our Carrier Transit Times?

Unstable transit times quietly convert into buffer stock, emergency freight, and bloated working capital. Predictability protects cash more reliably than raw speed.

Ask to see:

Quoted vs actual transit times by lane, carrier, and mode
Standard deviation/variance of transit time, not just averages
Correlation between transit variability and inventory days on hand
Volume and cost of premium/expedited freight used to “fix” missed transits

High variance forces buffer stock. Buffer stock ties up cash. Cash is not free right now.

Every extra day of inventory is capital you cannot deploy elsewhere.

3. What Does Our DIFOT Look Like Where It Actually Matters?

A 90% DIFOT means one in ten orders fails, which is a customer experience strategy you probably did not intend. Executives need to see DIFOT where revenue and margin are concentrated.

Break it down by:

DIFOT by top 20% revenue customers
DIFOT by high‑margin SKUs
DIFOT during peak periods vs BAU
DIFOT by carrier, lane, and fulfilment node
Links between DIFOT dips and spikes in credits, returns, or churn
Carriers and modes

McKinsey research shows service failures disproportionately hit top 20% revenue customers, even when averages look fine.

Boards should be asking where DIFOT fails, not whether it passes.

4. How Does Freight Performance Affect Retention and Revenue?

Freight failures do not just show up in the warehouse; they surface later as churn, higher CAC, and slower growth. Retention is often a freight, not marketing, problem.

Ask your team to correlate:

Relationship between DIFOT and repeat purchase rate by segment
NPS/CSAT by delivery experience (on‑time vs late/failed)
Volume and value of credits, refunds, and returns tied to delivery issues
Profit impact of a small retention lift (e.g., +5%) vs current freight performance
DIFOT vs repeat purchase rates
Transit reliability vs NPS
Delivery failures vs credit notes and returns

Bain & Company found a 5% increase in retention can lift profits by 25–95%.

Freight performance is sitting right in the middle of that equation, whether it gets credit for it or not.

5. How Confident Are We in Freight Invoice Accuracy?

If invoices are not audited, overpayment stops being an error and becomes a recurring cost structure. Complex billing makes leakage almost guaranteed.

Percentage of invoices independently audited each month
Error rate and value of recovered overcharges over the past year
Clear rules for accessorials, minimums, and surcharges vs what is actually billed
Time and cost spent disputing invoices vs savings realised

Industry audits consistently show:

1–5% of freight invoices contain errors (Freight Audit & Payment benchmarks)
Disputes are often not raised because teams lack time or data

If invoices are not systematically audited, overpayment becomes a business model.

6. How Much Money Are We Spending Moving Empty Space?

Poor utilisation means paying to move air while telling the board freight costs are “fixed”. Utilisation is one of the fastest levers for cost and emissions reduction.

Ask for:

Average cube and weight utilisation by lane and mode
Frequency and cost share of partial loads or low‑fill consignments
Missed consolidation opportunities (e.g., multiple consignments to same customer/region)
Cost and emissions impact of moving from current to target load factors

The International Transport Forum estimates better load consolidation can reduce freight costs by 10–25% without changing service levels.

If utilisation is weak, you are paying to transport air.

7. How Are Freight Exceptions Handled When Things Go Wrong?

Things will break. That is not the test.

The test is:

How quickly issues are detected
Whether customers find out first
How long resolution takes

Long exception resolution times correlate directly with higher service costs and churn (PwC).

Hope-and-apologise is not a freight strategy.

8. How Exposed Is Our Freight Network to Single Points of Failure?

If a port closes, a carrier collapses, or weather shuts a region, what happens next?

According to the World Economic Forum, supply chain disruption is now ranked among the top five global business risks.

Ask:

Which lanes rely on one provider?
How quickly volume can be rerouted?
What resilience actually looks like beyond a slide deck?

9. How Does Freight Support Our ESG Commitments in Reality?

You cannot talk emissions reduction while airfreighting around bad planning.

The International Transport Forum estimates optimised freight networks can reduce emissions by 15–40% through:

Modal shift
Better planning
Consolidation

Often, the most sustainable option is also the cheapest. But only if someone aligns service promises with reality.

10. Which Freight Metric Would We Show the Board?

If freight needs ten slides, the story is wrong.

Ask:

Which single metric links freight to profit?
What would a 10–20% improvement change financially?

Freight questions for CEOs and CFOs should end in outcomes, not activity.

Turning Freight Questions Into a Boardroom Tool

This is how freight stops being reactive.

One board slide

DIFOT
CTS variance
Freight cost per order
One line on customer impact

One checklist

The 10 freight questions
Current state vs target state

One executive sentence

“If we stabilise transit times and lift DIFOT, we reduce working capital, shrink credits, and protect margin.”

Now freight has a seat at the table.

Where “Fast, Cheap, Good” Actually Lands

You never get all three.

You choose where to pay and where to risk.

Fast + cheap sacrifices reliability

Cheap + good sacrifices speed

Fast + good sacrifices cost

The role of freight questions for CEOs and CFOs is not to chase perfection.It is to make trade-offs deliberate instead of accidental.

If the board sells fast and reliable, procurement cannot quietly buy cheapest and hope.

Freight Questions for CEOs and CFOs - FAQs

Why should CEOs and CFOs care about freight decisions?

Because freight directly impacts margin, working capital, customer retention, and risk exposure - not just transport cost.

Industry data shows logistics typically accounts for 8–10% of revenue in traditional sectors and 12–20%+ in ecommerce, yet hidden freight inefficiencies can erode 15–25% of gross margin through expediting, excess inventory, credits, and service failures.

For CEOs and CFOs, freight is no longer an operational detail. It is a financial system that influences growth, cash flow, and brand trust.

What freight metrics should CEOs and CFOs review at board level?

Boards should focus on freight metrics that connect directly to business outcomes, not activity. The most effective metrics include:

DIFOT (Delivery In Full, On Time) to measure promise-keeping and customer experience
Carrier Transit Time Stability (CTS variance) to understand predictability and inventory risk
Freight cost to serve per order or customer to reveal true margin impact

When reviewed together, these metrics show whether freight supports or quietly undermines profitability.

What does DIFOT really tell executives about freight performance?

DIFOT shows whether the business is doing what it promised customers. A 90% DIFOT rate means 1 in 10 orders fails, which is significant given that 32% of customers stop buying after a single bad delivery experience.

For CEOs and CFOs, DIFOT is not a warehouse KPI. It is an early indicator of churn, rising service costs, and hidden revenue leakage - especially in high-value customer segments.

How does unstable freight transit time increase costs and working capital?

Unpredictable carrier transit times force businesses to protect themselves with buffer stock, longer lead times, and premium freight.

Research shows volatile transit performance can increase inventory levels by 10–30%, tying up cash that could otherwise be used for growth or debt reduction.

For executives, stable transit times are often more valuable than faster ones, because predictability reduces both cost and risk.

How can CEOs and CFOs reduce freight costs without hurting service levels?

Reducing freight cost without damaging service requires shifting focus from rate-shopping to system performance. This includes:

Measuring true end-to-end freight cost, not just carrier rates
Improving load utilisation and consolidation
Stabilising transit times to reduce safety stock and expediting
Linking freight performance to customer retention and margin

In many cases, businesses reduce total freight-related costs by 10–25% without cutting service by fixing planning, visibility, and network design rather than squeezing carriers.

If freight only shows up in the boardroom when something breaks, you are already paying for decisions you did not mean to make.

Ask better freight questions.

Demand clearer answers.

Turn transport from a cost into a controllable system.

Transport Works. Because your supply chain will not 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.