Freight cost per unit
What it costs to move one unit to the customer.
01 What it is
Why anyone looks at this number
What it costs to move one unit to the customer.
Freight is one of the fastest-moving costs in most businesses and one of the least visible in pricing. It also connects directly to how customers order.
02 The formula
How it is worked out
Freight cost per unit = total_freight_cost ÷ units_shipped grain : month × lane × mode unit : currency per unit source : Transport management and carrier invoices
Match invoices back to shipments before averaging. Accessorial charges — waiting time, redelivery, tail lifts — often exceed the base rate and arrive on a separate invoice.
03 Worked example
The same number, with real inputs
| Freight cost | €1.92m |
| Units shipped | 4.00m |
| Calculation | 1.92m ÷ 4.00m |
| Result | €0.48 per unit |
Just under 4% of the average selling price. If drop sizes fell 10%, this rises by more than most annual price increases deliver.
04 What moves it
Four things that actually change this number
Drop size
The single biggest lever: fewer, fuller deliveries.
Mode
Air, road, rail, sea — a cost and a lead-time decision at once.
Fuel and surcharges
Indexed, external, and worth isolating from performance.
Failed deliveries
Redelivery is the most expensive freight you buy.
05 Where the number lives
The system, the record and the fields
| System of record | Key record | Fields you need |
|---|---|---|
| Transport management and carrier invoices | Shipment joined to Delivery and Order line | carrier_charge, fuel_surcharge, weight, volume, drop_count, lane |
Match invoices back to shipments before averaging. Accessorial charges — waiting time, redelivery, tail lifts — often exceed the base rate and arrive on a separate invoice.
06 How it goes wrong
Three ways this metric misleads people
Ignoring accessorials
The base rate is negotiated hard and the extras are never reviewed.
Fix: Report the fully landed cost per lane, including every surcharge.Averaging across lanes
A single number hides the routes that are losing money.
Fix: Report by lane and by customer.Not connecting to order behaviour
Freight is treated as a logistics cost rather than a consequence of how customers order.
Fix: Feed it into cost to serve and into order minimums.08 Questions
Frequently asked
Should freight sit in COGS or in operating cost?
Inbound freight belongs in cost of goods; outbound is usually a distribution cost. What matters is that the treatment is consistent, since it moves gross margin.
How do we reduce it without hurting service?
Order consolidation and delivery scheduling, almost always. Rate negotiation is a one-off; drop size compounds every week.
One definition, everywhere it is used
SCIKIQ stores this metric once and serves it to every dashboard, board pack and agent that asks.