Freight Cost per Unit Shipped
Average logistics cost incurred per unit or order shipped
What is Freight Cost per Unit Shipped?
Freight cost per unit shipped is the average freight and logistics cost for each unit or order sent. It shows how much it costs to move products to customers.
Freight can be a large part of the cost of a product, so tracking it helps protect margin.
How this KPI is measured
- Function
- Operations & Supply Chain
- Sub-function
- Logistics & Fulfilment
- Industry
- All Industries
- Type
- Lagging
- Impact
- Efficiency
- Unit
- $
- Measurement frequency
- Monthly / Quarterly
- Formula
- Total freight and logistics costs / Total units or orders shipped
How to calculate it
Divide total freight and logistics costs by the total units or orders shipped.
For example, if freight cost 200,000 for 80,000 units, the cost per unit is 2.50.
Include all logistics costs such as carriage, fuel surcharges and handling, and split by route, carrier and product.
Where it is used
Controlling logistics costs
Find savings.
Choosing carriers
Compare rates.
Pricing products
Include delivery cost.
How to improve it
Tips and common mistakes
- The cheapest freight is not always best. Consider reliability.
- Include all logistics costs.
- Compare per unit and per kilogram.
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