Freight cost per unit shipped
Calculated by dividing total freight costs by number of units shipped per period. Useful in businesses where units of measure are standard (e.g., pounds). Can also be calculated by mode (barge, rail,ocean, truckload, less-than-truckload, small package, air freight, intermodal, etc.).
Direction: Less is better
Unit: Money
average score: 4.5
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April 14th, 2008 at 2:36 am
Where a business is shipping a large range of SKU’s, would it be meaningful to simply calculate:
Total freight cost / Value of stock shipped?
Obviously as this ratio increases, profit decreases.
But at the end of the day, it’s a matter of finding a mechanism to drive improvements in an area where different stakeholders often have competing interests (example sales vs distribution).