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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.).

Details

Unit: Money

Direction: Minimize

Unit: USD$


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Benchmark Results


This KPI is most used for:
Cost Leadership

Comments

  1. keith S.

    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).

  2. usik pitono

    The main point on this KPI is how to minimize freight cost. Action plan to minimize is much important. In the normal condition, end users have not much role to manage the freight cost decided by 3PLs, but internal analysis on load fulfilment of the cargo toward the standard capacity (ie: container, truck)is much important. How to optimize the load, hence it can reduce the freight cost.
    thanks and hopefully useful

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