Data & Calculation:
The measurement trackes the transportation cost against sales revenue over a period, for instance, month.
Based on an individual company’s practice, the transportation cost can be broken down by
- Freight Out
- Freight In
- Duty
- Material Handling Charges
- Brokerage
- Postage & Courier
The cost ratio can be used to review carrier pricing and logistics performance. This can be used to support logistics expenses analysis and transportation strategies.