For CFOs and finance leaders
A dollar saved on freight is a dollar of EBITDA, with no cost of goods, no trade spend and no sales cycle. Here is the math, a worked example and a calculator you can run on your own numbers.
For most CPG and food and beverage brands, freight is one of the largest costs after the product itself.
That makes freight one of the few cost lines big enough to move EBITDA in a single year. And unlike a new product launch or a new retail account, a dollar of freight savings carries no cost of goods, no trade spend, no slotting fees and no sales cycle. It goes straight to the bottom of the P&L.
This page walks through the math, a worked example and where the savings usually come from.
EBITDA is earnings before interest, taxes, depreciation and amortization. Freight sits above that line, inside cost of goods sold or operating expense, depending on how your books are set up. Either way, when freight spend comes down and volume stays the same, EBITDA goes up by the same amount.
If your company is valued on a multiple of EBITDA, there is a fourth number: savings times the multiple. For a business preparing for a sale, a recapitalization or a lender review, that line often matters most.
It also helps to think per pound. Multiply your annual pounds shipped by $0.01, and that is what every cent per pound you cut is worth a year. At 80 million pounds, a cent a pound is about $800,000 (example numbers).
All figures below are example numbers for illustration only. They are not a client result or a forecast.
| Example company | |
|---|---|
| Annual revenue | $150,000,000 |
| Annual freight spend | $12,000,000 |
| EBITDA margin | 10% ($15,000,000) |
| EV/EBITDA multiple | 8x |
Now assume an illustrative scenario where freight spend comes down 5%:
| Result | Example |
|---|---|
| Annual freight savings | $600,000 |
| New EBITDA | $15,600,000 |
| EBITDA margin | 10.0% to 10.4% (+0.40 points) |
| New revenue needed to earn the same profit | $6,000,000 |
| Enterprise value impact at 8x | +$4,800,000 |
To add the same $600,000 through sales, this company would need to find $6 million in new revenue, win the shelf space, fund the trade spend and deliver it. Taking the same amount out of freight usually involves no new customers at all.
For CFOs and finance leaders
See what a reduction in freight spend could mean for EBITDA, margin and enterprise value. Pick an illustrative scenario, or set your own. Your real number comes from a review of your invoices.
at a 5.0% scenario on $8,000,000 of freight
Estimate only. This calculator shows illustrative scenarios based on the numbers you enter. It is not a quote, a forecast or a guarantee of savings, and the scenario percentages are not a Maximizer Team promise. Results are before any advisory fee and before tax. Actual savings depend on your lanes, carriers, contracts and data, and are confirmed only through a review of your invoices. Nothing you type here is stored or sent anywhere unless you choose to submit your email.
Case study
A CPG snack company we worked with saved $823,500 in year one: $637,500 in recurring annual savings, which repeats every year the changes stay in place, and a $186,000 one-time credit.
The recurring portion is what lifts run-rate EBITDA. As an illustration only, at a 10% margin, $637,500 a year is the same profit as roughly $6.4 million in new sales, every year. The one-time credit improves the year it lands in, but finance teams usually keep it out of run-rate EBITDA. We report the two separately for that reason.
Year-one savings: $637,500 recurring plus a $186,000 one-time credit.
Read the case study →10 savings levers
Some levers reduce the rate you pay, some reduce how much freight you buy, and some stop charges you should never have paid.
The last lever matters most to finance. A saving that can't be shown on paid invoices against an agreed baseline is not a saving your auditors or your board will accept.
Not every saving is equal, and we don't treat them that way. Each one moves through five stages:
Only realized savings, measured against an approved baseline on actual invoices, count as verified. One-time recoveries, such as credits and refunds, are kept separate from recurring savings. And a result from a short period is not annualized unless the data supports it. That way, the EBITDA number you take to your board is one you can defend.
For the full finance view, see freight savings for CFOs →
Yes, as long as volume and service stay the same. Freight is an operating cost above the EBITDA line, so a lower freight bill raises EBITDA by the same amount. Any advisory fee is also an operating cost, which is why we show savings and fees separately in our reporting.
It improves reported EBITDA in the period it is booked, but most finance teams, lenders and buyers treat it as non-recurring and leave it out of run-rate or adjusted EBITDA. We report recurring savings and one-time recoveries separately so you can treat each correctly.
No. The 3%, 5% and 8% scenarios are illustrations to show how the math works. Your actual opportunity depends on your lanes, carriers, contracts and data, and is only known after a review of your invoices.
The calculator gives you a scenario. A free 14-day freight savings review gives you your actual opportunity: start with a short intro call, then send 12 months of freight invoices, and we'll benchmark them and send a written review of your biggest savings opportunities.
Get my free freight reviewNo upfront fee. No obligation. NDA available.