Margin Leakage in Logistics
Why Spreadsheets Are Killing Your Margins
A freight forwarding CFO told me a story that I haven't been able to forget.
His company had just finished their quarterly review. Revenue was up. Shipment volumes were up. But profit margins had dropped—again. For the third quarter in a row.
"We're busier than ever," he said. "But we're not making more money. Something is leaking, and I can't find it."
I asked him to walk me through their quoting process. He opened Excel.
Twenty minutes later, I found his leak.
The Margin Killers Hiding in Your Spreadsheet
After auditing dozens of forwarding companies' quoting processes, I've identified five ways spreadsheets silently destroy margins. The CFO's company had all five.
Margin Killer #1: Outdated Rates
The company's rate sheet showed ocean freight to Rotterdam at $1,850 per 40'. The actual carrier rate—updated two weeks ago in an email nobody had entered—was $2,100.
Every Rotterdam quote for two weeks had been $250 short. At 15 shipments, that's $3,750 in margin that vanished.
Margin Killer #2: Missing Surcharges
The rate sheet had base rates and standard surcharges. But it didn't include the new low-sulphur fuel surcharge that went into effect last month. It wasn't in the spreadsheet because nobody knew where to put it.
That surcharge was $75 per container. Missed on about 40 shipments a month. Another $3,000 gone.
Margin Killer #3: Formula Errors
Row 847 had a formula that calculated margin percentage. Someone had edited it six months ago—accidentally changing the cell reference. Instead of adding a 15% margin, it was adding 5%.
That row covered rates to Southeast Asia. One of their busiest trade lanes. Six months of underquoting.
Margin Killer #4: Currency Confusion
Some rates were in USD. Some in EUR. Some in local currency. The exchange rates in the spreadsheet? Last updated in January. It was now September.
Currency fluctuations alone had cost them an estimated 2% on European shipments.
Margin Killer #5: Inconsistent Markups
Different people applied different margins. There was a "standard" markup policy, but it lived in someone's head, not the spreadsheet. One ops person added 12%. Another added 18%. Nobody knew who was right.
The result: some customers got great deals (too great), others got quoted high and went to competitors.
The Math That Should Scare You
Let's do some rough math on what this CFO's spreadsheet was costing:
Outdated rates: ~$3,750/month
Missing surcharges: ~$3,000/month
Formula errors: Unknown, but significant
Currency issues: ~2% of European revenue
Inconsistent markups: Lost deals + underpriced wins
Conservative estimate? $10,000-15,000 per month in margin leakage. That's $120,000-180,000 per year.
From a spreadsheet.
And this was a mid-sized forwarder. For larger companies, these numbers multiply quickly.
Why This Keeps Happening
The CFO wasn't careless. His team wasn't incompetent. They were using the wrong tool for the job.
Spreadsheets fail at rate management because:
They don't enforce rules. A spreadsheet lets you enter anything anywhere. There's no validation, no consistency check, no "are you sure this rate is $500 less than last month?"
They don't track time. Rates have validity periods. Spreadsheets don't know that a rate expired yesterday—they just show you a number.
They don't connect to source data. Carrier rates arrive in emails. Someone has to manually transfer them to the spreadsheet. Every manual step is an opportunity for error.
They don't audit themselves. When a formula breaks or a rate goes stale, the spreadsheet doesn't tell you. It just keeps producing wrong numbers with confidence.
They don't scale. What works for 500 rate entries becomes unmanageable at 5,000. But by then, you're too deep to start over—or so it feels.
What Fixed Margins Look Like
That CFO's company switched to VoltusFreight's rate engine six months ago. Here's what changed:
Rates update automatically. Carrier emails get processed by AI. New rates enter the system within hours, not weeks. Expiring rates trigger alerts.
Surcharges are built in. The system knows that fuel surcharges, peak season charges, and special handling fees exist. It doesn't let you quote without them.
Margin rules are enforced. Standard markup? Applied automatically. Customer-specific pricing? Coded once, used every time. No variation based on who's working.
Currency converts in real-time. The system pulls live exchange rates. No more quoting with January's EUR/USD when it's September.
Everything is auditable. Every quote can be traced back: which rates were used, what margins were applied, when the rates were last updated. No more mysteries.
Three months after implementation, their margin leakage had dropped by over 60%. The CFO told me: "I finally know what we're actually making on each shipment. I didn't have that before."
The Question You Need to Answer
Here's what I want you to do: look at your last 20 quotes. Can you tell me, with confidence, that every single one used accurate, current rates with correct margins?
If you hesitated—even for a second—you have a margin problem.
You might not see it in any single quote. But it's there, compounding quietly, shipment after shipment, month after month.
Spreadsheets didn't create this problem. But they're not going to solve it either.
