# Distributor Free Freight Policy Template

> Source: https://netray.co/tools/distributor-free-freight-policy-template
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Write a clear, consistent freight policy covering thresholds, fees, expedites and exceptions, and export it for your sales team and customers.

## Category

industry-templates

## Industry

Wholesale Distribution

## Erp

Epicor Prophet 21

## Audience

- Sales manager
- Customer service manager
- Distribution executive

## Tool

**Kind:** template

**Output:** document

**Fields:**

#### Company name

**Key:** company

**Type:** text

**Default:** Midwest Industrial Supply

#### Effective date

**Key:** effective

**Type:** date

**Default:** 2026-11-01

#### Free freight threshold (order value)

**Key:** threshold

**Type:** text

**Default:** $750

#### Free freight delivery area

**Key:** zone

**Type:** text

**Default:** within 150 miles of the shipping branch, delivered by company truck

#### Small order fee

**Key:** small_fee

**Type:** text

**Default:** $15 on orders below the threshold

#### Expedite rule

**Key:** expedite

**Type:** textarea

**Default:** Next-day and same-day shipments are billed at actual carrier cost plus a handling charge, and are never covered by free freight.

#### Contact for exceptions

**Key:** contact

**Type:** text

**Default:** Customer service manager

#### Freight terms

**Key:** terms

**Type:** select

**Options:**

- Prepaid and add
- FOB Origin, freight collect
- Prepaid, freight included

**Default:** Prepaid and add

**Blocks:**

#### {{company}} Freight Policy

**Body:** Effective date: {{effective}}

This policy explains how {{company}} charges for shipping so that customers and our sales team know what to expect on every order.

#### Free Freight

**Body:** Orders totaling {{threshold}} or more before tax ship at no freight charge {{zone}}. The order value is based on invoiced merchandise and excludes tax, special freight and any items marked as freight-excluded.

#### Orders Below the Threshold

**Body:** Orders below {{threshold}} are subject to the following: {{small_fee}}. Freight terms for these orders: {{terms}}.

#### Expedited and Special Shipments

**Body:** {{expedite}}

#### Exceptions

**Body:** Exceptions such as contract customers, stocking agreements, or oversized and hazardous goods require approval from: {{contact}}. Approved exceptions must be recorded on the customer account or the sales order.

#### Policy Review

**Table:**

**Columns:**

- Item
- Owner
- Review frequency

**Rows:**

**0:** Threshold level

**1:** Sales manager

**2:** Annual

**0:** Small order fee

**1:** Finance

**2:** Annual

**0:** Exceptions list

**1:** Customer service

**2:** Quarterly

#### Approvals

**Signatures:**

- Sales manager
- Finance
- Operations

**Notes:** This is a starting point for internal use, not legal advice. Have counsel review any customer-facing terms, and confirm how your ERP applies freight charges before release.

## Content

**Intro:** A free freight threshold is one of the most visible pricing decisions a distributor makes, yet many sales teams apply it inconsistently. This template documents the rule so everyone works from the same page.

**Sections:**

#### How to use it

**Body:** Fill in the threshold, delivery area, small order fee and expedite rule that match your commercial decision, then export the document as PDF or Word. Share it with customer service, outside sales and your ERP administrator so the system configuration matches the written policy. Review the document with finance before release.

**Bullets:**

- Set the threshold from your cost data, not from competitors alone.
- Define whether the threshold uses pre-tax merchandise value.
- Decide in writing who may approve exceptions.

#### Setting the threshold

**Body:** A rough break-even threshold equals your average freight cost per order divided by your gross margin percent. If an order ships for 40 dollars and your margin is 25 percent, you need about 160 dollars of sales to cover freight on that one order, before any other costs. Most distributors set the threshold well above this to fund handling and overhead, and to nudge customers to consolidate orders.

#### Keeping it consistent

**Body:** Policy drift happens when exceptions become habit. Keep an exceptions list, review it quarterly and look at how often the threshold is waived. If the same customers always get an exception, they may need a contract term instead. Align ERP freight rules and carrier settings with the written policy so billing is automatic.

#### Common mistakes

**Body:** Writing a threshold that uses invoiced total including tax confuses customers and customer service. Not covering expedites lets rush shipments eat margin. And leaving out a small order fee gives customers no reason to batch purchases, which drives up your cost to serve.

**Cta:** Netray can analyze how freight is actually charged and absorbed across your orders in the ERP, so you can tune the threshold with data.

**Faq:**

#### What is a typical free freight threshold?

**Answer:** It varies by vertical, order size and margin. Many distributors use a threshold of a few hundred dollars, set from their cost to ship and gross margin. Use your own data to choose it.

#### Should small order fees be included?

**Answer:** A small order fee helps cover the fixed cost of picking and shipping small orders and encourages consolidation. Check customer contracts and competitive norms before introducing one.

#### Is this legal advice?

**Answer:** No. It is a generic starting point. Customer-facing terms should be reviewed by counsel, especially where contracts, tax or regional rules apply.

#### How do I enforce it in the ERP?

**Answer:** Most distribution systems support freight rules by customer, ship-via and order value, but setup varies by product and version. Ask your administrator to configure the rules to match the written policy.

## Search terms

free freight policy template, distributor shipping policy, freight threshold policy, small order fee policy, customer shipping terms template, wholesale freight policy example, prepaid and add freight policy

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