Transcending the Tasman - Your ERP measures every cost… except the one that’s growing the fastest
03 December 2025
Whether it's East or West of the Tasman, 2025 has been a year marked by economic hesitation, a stop–start rhythm of growth followed by uncertainty.
In the boardrooms and budget cycles across Australia and New Zealand, one theme dominates: cost control. Every P&L line is being scrutinised, except freight. Or at least… not the right part of freight.
Businesses keep riding the freight-rates rollercoaster — switching carriers, but never seeing the true drivers of margin erosion.
If freight lived inside the ERP though, leaders could take control rather than react.
We're nearly at the end of 2025... and maybe that's a good thing.
We’re nearly at the end of 2025… and if I’m honest, part of me is relieved.
It has been a year marked by economic hesitation, and a stop–start rhythm of growth followed by uncertainty. KPMG recently described the broader context of this movement as a “geopolitical-driven slowdown” (KPMG 2025).
Moody’s expects this drag to continue well into 2027 (Moody’s 2025). The roaring ’20s are still roaring; just in directions none of us expected.
This year has been fascinating as through the boardrooms and budget cycles I see play out across Australia and New Zealand, one theme continually dominates: cost control. Executives are re-examining every cost line that touches their P&L… except the cost of freight.
Or at least... not the right part of freight.
Freight is often the first cost centre to be hit with RFPs, rate negotiations, and carrier switches. It's completely understandable, but that focus delivers temporary relief at best.
This focus delivers short-term rate cuts without the visibility to solve the long-term Cost-to-Serve challenge. Businesses end up riding the same freight-rates rollercoaster, switching carriers, but never actually seeing the true drivers of their margin erosion.
These discussions have made one thing clear to me though: if freight lived inside the ERP, leaders would finally have the insight to take control rather than react.
Think about this for a moment. Freight is of the highest annual cost lines, yet it's also one of the most volatile; and one of the least measured. It should feel absurd to spend millions… sometimes tens of millions… on something the business can’t fully define or predict. And yet, here we are. Not from careless management, but just the lack of a better way.
Freight is one of those few major cost centres where businesses are still forced to operate reactively. It’s a problem that has always been there; but is now too large to ignore.
The freight component of Cost-to-Serve has outgrown the toolkit
At Cario, we’ve seen Cost-to-Serve come up as a popular term this year, and with good reason. It reflects the true cost of delivering a product to a customer: the handling, storage, packaging, transport, customer service, and all the operational effort surrounding the sale.
But zoom into freight… and it becomes less theoretical, and far more operationally painful.
In far too many organisations, freight still sits outside the systems used to model costs and margins. It is treated as something separate. A warehouse issue. An operational detail… not a commercial decision.
And the result? Margins become hope rather than knowledge.
Finance only sees the damage weeks later when invoices arrive; leaving leaders guessing which customers, lanes or channels are actually profitable. It creates a structural blind spot: a business might be growing revenue… but eroding the very margin that justifies that growth.
Historically, this was tolerated because freight was steady enough; predictable enough. Manageable enough.
Not anymore.
The “new normal” is volatility; and freight absorbs it first
Australia and New Zealand have always been expensive places to move goods. Long distances, sparse populations, carrier dependencies, unpredictable weather; it comes with the territory.
But over the past five years, something has shifted. Disruptions that were once extraordinary now seem routine. A single global event in the morning can inflate transport costs by afternoon.
The freight line on the P&L is no longer a cost centre you can smooth over with last year’s assumptions; it has become:
- The fastest to spike
- The hardest to predict
- The slowest to reconcile
Layer in growing SKUs, omni-channel fulfilment, customers demanding speed, sustainability reporting tightening behind the scenes; and freight isn’t just volatile: Freight is the single most exposed component of Cost to Serve.
Yet it still isn't measured with the same discipline as other business costs. That mismatch between volatility and visibility is a big question mark hanging over the balance sheets.
So why do we still treat freight like it’s 1999?
If you walk the hallway between a warehouse and a finance office, you will discover a cultural and technical divide. Freight cost sits in the gap.
Warehouse teams book carriers using tools meant for dispatch; finance teams engage with freight only when invoices arrive; tracking lives in portals no one checks until something goes wrong.
Two sides of the same business… rarely seeing the same truth. Ops ships, finance pays; and the CFO is left asking why.
It is not for lack of concern, or is one side ‘right’ or ‘wrong’. it’s simply that the tools many organisations rely on were never designed to factor real-time freight cost into commercial decision-making. Freight stopped being a back-office inconvenience years ago; and the systems haven’t kept up.
ERP: the system that sees everything… except freight
Every other major business cost, from labour to rent to COGS, is captured in the ERP at the moment decisions are made. That's the whole point of an ERP; a single source of commercial truth.
Freight is the exception, the outlier. The one cost with:
- The least real-time visibility
- The most volatility
- The slowest feedback loop
Which makes no logical sense; financially or operationally.
If a system is trusted to approve price, calculate margin, and act as the financial record. then freight must be part of that system; especially when freight materially changes the outcome of every order.
Imagine if an ERP like Microsoft Dynamics 365 didn’t just record freight cost after the fact… but informed the decision before the product was packed. That shift - from recording freight to anticipating freight - is what separates the businesses managing margin from those discovering erosion far too late.
Leading organisations are making freight visible again
I’ve seen a change recently in mindset. The organisations that have regained control of their Cost-to-Serve are the ones that understand their freight reality. They are bringing freight data into their ERP environment, not as a monthly import or a spreadsheet, but as operational truth.
Booking decisions, cost calculations, tracking updates and PODs… flowing directly into the same system that controls pricing and profitability. Cost control can only happen where cost visibility exists.
One carrier change, one lane decision, one freight spike - and everyone sees the impact… not weeks later, but now.
What this unlocks for leaders
The moment freight becomes visible in the ERP, something fundamental shifts.
Finance stops asking:
“Why is this hurting us?”
and starts asking:
“What should we change before this hurts us again?”
It becomes possible to:
- Forecast margin with real confidence
- Identify unprofitable customers or lanes early
- Connect cost control to customer experience and delivery promise
- Align sustainability reporting with the financial truth
- Move from reacting to preparing
In a low-growth economy, that edge really matters.
Where the industry goes from here
There’s still a perception though that freight visibility is a multi-year transformation program. But that’s an outdated fear, a hangover from logistics projects of the past.
Today:
- Freight data can connect directly into ERPs
- Integration can be operational in weeks, not years
- Decisions can be based on facts, not assumptions
I’ve been fortunate enough to help several ANZ organisations make this shift; not one has regretted making freight visible. They regret how long they tried to manage it blind.
Leaders don’t need perfection… they need clarity.
There is risk in changing freight practices, but there is greater risk in ignoring freight simply because it is difficult to measure. The companies that emerge strongest from this slowdown will not be the ones that cut fastest; they will be the ones who understand their margins earliest.
Cost-to-Serve is not a theory or a slogan said by people who want to feel across their budgets. It’s a real thing, and it is a test of commercial discipline. Freight is now the chapter that decides the ending.
Because sometimes the most expensive thing in a business isn’t the cost itself; it’s not knowing where it truly lands.
Customised Demo
If you have specific scenarios you’d like to see or just questions about Cario capabilities, you can book a custom demo with one of our freight specialists.