Median freight charges on distributor quotes in Parspec have increased 36%, but the more interesting question is how distributors are accounting for those costs and what happens when freight assumptions don't carry through the project.
Freight has long been one of the more difficult costs to pin down when quoting a project. Sometimes it appears as a “plus freight” note. Other times, it's estimated by pallet count, added as a separate charge, or built into material pricing.
Those approaches become harder to manage when transportation costs change quickly.
According to the U.S. Energy Information Administration, the national average retail price of on-highway diesel was $6.20 per gallon for the week of October 5, 2026, up about $2.49, or 67%, from the same week in 2025.
Higher fuel costs have coincided with rising trucking prices, increasing pressure on distributors and rep agencies quoting material for construction projects.
But rising freight prices are only part of the story.
An analysis of distributor quotes created in Parspec reveals two patterns worth examining: freight charges are increasing substantially, yet freight is still itemized on fewer than one in ten quotes. And, when freight is itemized, it can represent a much larger share of smaller orders than larger projects.
Parspec analyzed freight charges on distributor quotes before and after February 28, 2026 to understand how changing transportation costs are appearing in customer pricing.
Three findings stand out.
Among distributors quoting in Parspec, the median flat freight charge on quotes that had it itemized averaged $508 in the six months before February 28, 2026, when the U.S. war with Iran began. Those flat freight charges rose sharply from a median of $550 in February 2026 to $750 by September 2026.
That's a $200 increase on a typical quote carrying an itemized flat freight charge.
For distributors preparing hundreds of quotes across multiple manufacturers, that change makes accurate estimating and cost recovery increasingly important.
A fixed freight estimate offers contractors greater upfront certainty, but if the actual charge exceeds the estimate, the distributor needs a clear policy on whether to absorb the difference or recover it.
Despite rising freight charges, separate freight lines remain uncommon in Parspec's quoting data.
The share of quotes containing a freight line increased from approximately 6.4 to 7.2% over the periods analyzed, but this doesn't necessarily mean distributors are overlooking freight.
Freight may be covered by manufacturer allowances, included in product pricing, communicated through quote notes, or handled separately from the quoted material, but the finding highlights an important distinction: freight doesn't have to be visible to the customer to be tracked internally.
For example, a contractor may prefer a single material price rather than a separate freight charge. A distributor can accommodate that preference while still recording how much freight was assumed in calculating the price.
Without a separate internal record, it becomes harder to distinguish material margin from the amount included to recover freight.
Parspec's analysis also found a significant difference in freight's share of quoted value across order sizes.
For quotes under $5,000, freight represented a median of approximately 10% of the quote total. For quotes exceeding $500,000, freight as a percentage of the order fell to less than 0.5%
These figures describe quoted freight when it is itemized, not freight costs across every order.
The difference matters when establishing freight policies.
Consider an illustrative $4,000 material order with $400 in estimated freight. Freight represents 10% of the material value. If actual freight increases to $500 and the distributor cannot recover the difference, the additional $100 comes directly out of the expected project contribution.
On a larger project, the same $100 discrepancy may be less significant relative to the overall contract value.
That suggests a single freight policy may not fit every order size. Smaller orders may warrant closer attention to minimum charges, freight allowances, and how freight costs are communicated to customers.
If freight were a single charge applied consistently across every order, accounting for it would be relatively straightforward, but distributors and rep agencies typically work with multiple manufacturers on the same project, each with different freight requirements.
Those differences create several operational challenges.
A distributor might have a $100,000 project, but the material could be divided across ten manufacturers. Each manufacturer's order must be evaluated against its own freight terms.
An order that falls just below a manufacturer’s freight-allowance threshold could incur a charge that wasn't included in the original estimate.
Material quantities, manufacturer selections, and shipping arrangements may change after the contractor awards the job. If those changes affect freight eligibility, the original estimate may no longer be accurate.
For projects where material is delivered to a distributor's warehouse before being staged and sent to the job site, both inbound and outbound freight need to be considered.
The amount a manufacturer charges may differ from the amount passed along to the next party, whether that’s a distributor or a contractor.
Tracking both matters because the landed cost of material depends on what was actually paid to move it, not only what was quoted.
The challenge is producing an estimate that carries the assumptions behind it — such as freight terms, allowance thresholds, or whether freight is billed, absorbed, or built into pricing — through ordering and invoicing.
These findings raise an important operational question: How can distributors account for freight consistently, even when the final cost isn't known at the time of bid?
As freight costs become less predictable, distributors and rep agencies need a more consistent approach to accounting for them, one that starts with the quote and carries through ordering and invoicing.
The goal isn't to predict exactly what freight will cost months in advance. It's to apply manufacturer terms accurately, build freight into quotes appropriately, and maintain visibility into those costs even when they aren't shown separately to customers, so the assumptions behind the quote still hold when orders are placed and invoices arrive.
Here are three practices that can help.
A single project can include material from a dozen manufacturers, each with different freight allowances, minimum orders, and special conditions. The same is true across a rep agency’s line card, where each manufacturer may set its own freight terms.
One manufacturer might offer prepaid freight on orders above $10,000, while another applies a percentage-based charge or adds fees for oversized material. When an order falls below a manufacturer's prepaid threshold, terms typically shift to prepay and add or freight collect, which means the freight charge lands on that order.
These differences matter because freight eligibility is generally determined by the individual manufacturer's order, not the total project value.
For example, consider a $75,000 project that includes $9,700 in material from a manufacturer with a $10,000 freight-allowance threshold. Even though the overall project is substantial, that manufacturer's order is evaluated on its own and may still incur freight charges.
This is where the small-order finding comes back into play. A hypothetical $500 freight charge would amount to less than 1% of the $75,000 project, but it would represent more than 5% of the $9,700 order it actually applies to.
Large projects are often made up of individual manufacturer orders that carry freight the way small orders do, which is why a project's overall size says little about how much freight it will absorb.
If the quoting team overlooks the threshold, those charges may not be included in the estimate.
To avoid this, rep agencies and distributors should maintain a consistent record of each manufacturer's freight terms and check allowance eligibility while building quotes, rather than relying on memory or separate spreadsheets.
That check shouldn't end when the quote goes out. Quantities change after the award, manufacturers get substituted, and material for larger projects is often released in phases, so an order that cleared its threshold at the quote stage can fall below it once it's divided into separate purchase orders. Rechecking eligibility as each order is released keeps the original freight assumption from quietly breaking down.
With Parspec, you can store manufacturer-specific freight terms and apply freight allowances automatically during quoting. As material is added, the team can see whether each manufacturer meets its freight threshold and how far an order falls short.
This gives estimators an opportunity to account for additional freight charges before the quote is finalized.
Not every project calls for the same freight calculation, and the right way to calculate freight costs depends on how each manufacturer charges for shipping.
Some manufacturers provide a flat freight amount, while others charge a percentage of material cost. A project may also contain individual lots or line items that require separate freight treatment, particularly when materials are oversized or shipped under different conditions.
Applying a single freight percentage across an entire quote can overlook these differences.
For more consistent estimates, freight should be applied at the level that reflects how the material will be purchased and shipped.
For example, a distributor preparing a quote with material from three manufacturers might need to apply a flat $500 freight charge for one manufacturer, a 3% freight charge for another, and a separate delivery charge for a specific lot.
Rather than combining these into one general estimate, the quoting team should account for each charge according to its underlying terms.
Keeping freight broken out this way also pays off after the award, when the quote turns into purchase orders.
Manufacturers don’t all want freight handled the same way on a purchase order. Some require freight to appear as its own line, while others only expect the freight terms to be noted, and a single project can include both.
If freight was calculated separately for each manufacturer during quoting, the team already knows the freight amount that belongs on each purchase order. If each manufacturer’s freight terms are also kept in one central record, rather than scattered across spreadsheets, the team knows how that manufacturer wants freight presented, too.
Without that breakdown, the team has to work backward from a single blended freight estimate to figure out what each order should include.
Parspec allows quoting teams to apply freight as a lump sum, as a percentage at the manufacturer level, or to specific lots and line items or to the total order.
How freight is calculated internally doesn’t always match how customers want it presented, whether as a separate line item or built into pricing.
Some contractors accept a separate freight line on the quote, while others prefer an all-inclusive material price, particularly when preparing bids with fixed budgets.
In those cases, distributors may distribute estimated freight across product pricing rather than show it as a separate charge.
The important distinction is that freight can be included in customer pricing without losing visibility into the underlying cost.
Consider a distributor preparing a $20,000 material quote with $600 in estimated freight.
Instead of showing a separate $600 freight charge, the distributor could distribute that amount across the relevant line items. The customer receives the pricing format they prefer, while the quoting team retains a record of the freight included in the quote.
Without that internal distinction, it becomes harder to understand how much of the quoted price is intended to recover freight costs versus generate material margin.
That record becomes most valuable when the manufacturer’s invoice arrives, because it gives the team something to check the invoice against.
For each order, the team should know two things: how much freight they were expected to pay, and whether the order met the manufacturer’s prepaid freight threshold.
With those answers on hand, reviewing the invoice becomes straightforward. If the order qualified for prepaid freight but the invoice includes a freight charge, the team can dispute it. If the charge is higher than expected, the team can see how much of the job’s margin it’s consuming while there is still time to respond, rather than discovering the shortfall after the project closes.
Parspec gives quoting teams the flexibility to show freight separately or distribute it across line-item pricing, while maintaining the freight calculation within the quote.
This allows distributors to accommodate customer preferences without relying on manual adjustments or losing track of the freight assumptions behind their prices.
Together, these practices help distributors and rep agencies manage the parts of freight they can control: applying manufacturer terms consistently, calculating freight at the level each project requires, and keeping a record of freight assumptions that holds up from the quote through the purchase order and the final invoice.
Transportation costs may continue to fluctuate, but freight estimates don't have to depend on scattered spreadsheets, manual calculations, or individual employees' memory.
See how Parspec helps distributors and rep agencies simplify freight quoting.
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