Guide · Budget
Freight budget planning: what next month’s freight should cost, lane by lane.
Most freight budgets are last year’s spend plus an increase. A budget that can be checked at month-end has to be built from volumes, lanes and rates.
A freight budget states what moving next month’s volume from plants to depots should cost, by lane and carrier, at the rates you have contracted. Built properly, it is the yardstick that month-end actuals are judged against.
What you need
| Input | What it means |
|---|---|
| Demand by depot | Tonnes each depot needs next month |
| Plant output | What each plant can ship that month |
| Lanes | Plant-to-depot routes, with distance and round-trip days |
| Rate cards | Rate per carrier, lane and truck type, plus fuel surcharge, toll, handling and minimum billable load |
| Fleet | Trucks available per carrier and type |
| Policies | Carrier-share caps and contracted minimum volumes |
How to build it
- Clean the inputs first: one bad rate row can distort the whole budget.
- Price each lane, carrier and truck option with one landed-cost formula, including the minimum billable load.
- Assign each depot to a plant, carrier and truck so the whole network costs least while respecting output, fleet and policy limits.
- Plan in whole trucks, since a part-filled truck still costs a full trip or the minimum billable.
- Publish the budget per lane, and show what your sourcing policies cost.
- Keep the formula: use the same one to price actuals at month-end.
An example
A bakery brand ships bread premix and packaged cakes from two plants to six depots. Instead of each depot taking its usual plant and carrier, the budget is built for the network as a whole, so a depot may be served from the plant that is slightly further but has spare output and a cheaper full-truck rate. For cost per tonne formulas, see freight cost per ton.
How FreightPlan does it
FreightPlan loads your masters (plants, depots, lanes, carriers, fleet, rate cards and demand) from CSV, validating every row: a bad row is rejected with the reason and the fix, and the rest of the file loads. It prices every option with one landed-cost formula (billable load × rate × (1 + fuel surcharge) + toll + handling) and uses a Google OR-Tools optimiser to choose the plant, carrier and truck type for every depot, in whole trucks, within 1% of optimal, subject to six written rules: demand, plant output, fleet truck-days, carrier share, contracted commitments and whole trucks. Unserved demand is reported, never hidden. At month-end the same formula prices the trip log, the gap is split into volume and rate so the two add up exactly to the total, and the rate gap is split into five causes (empty truck space, rate card, unplanned trips, detention and service), each with an owner and an action.
Questions
How do you prepare a freight budget?
From next month’s demand by depot, plant output, lanes, rate cards, fleet and policies: price each option with one landed-cost formula and choose the cheapest feasible plan for the whole network, in whole trucks.
Why not budget freight as last year plus inflation?
Because it cannot be checked. A budget built from volumes, lanes and rates can be compared with actuals and the gap explained.
What is landed freight cost per trip?
Billable load times the rate, adjusted for fuel surcharge, plus toll and handling, with the minimum billable load applied when the truck is under-filled.
See it on your own data. FreightPlan — Budget freight, explain the gap. Book a 30-minute working session with an engineer.