Freight Budget vs. Actual

Freight budget vs. actual compares what a shipper expected to spend on transportation against what they actually spent. The budget is typically built during annual planning using projected volumes, contracted rates, and assumptions about mode mix, fuel surcharges, and accessorial frequency. Actual spend accumulates through the year as shipments move and invoices are processed. The variance between the two – and the ability to explain it – is what keeps logistics leaders credible with their CFO.

Variances come from multiple sources: volume was higher or lower than planned, rates moved (especially spot market rates during capacity crunches), accessorial charges exceeded assumptions, mode mix shifted – more LTL due to smaller orders, more spot due to tender rejections – or fuel surcharges spiked. The challenge isn't that variances exist; it's that most shippers can't decompose them cleanly. "We're $200K over budget" isn't actionable. "We're $200K over budget – $80K from unplanned spot market usage on three lanes, $70K from detention charges at two facilities, and $50K from fuel surcharge increases" – that's a story finance can understand and operations can act on.

Real-time budget tracking changes the dynamic from explaining what happened to managing what's happening. When a logistics team can see mid-month that they're trending 8% over budget and can identify the drivers, they can make adjustments – consolidating shipments, shifting mode, or addressing the facility issues causing detention – rather than discovering the overage after the month closes.

For mid-market shippers where the logistics team often lacks dedicated financial analysts, the ability to generate accurate budget-to-actual reporting without manual data assembly is the difference between managing freight spend proactively and just hoping it comes in close.