finance, shippingI am currently developing a tool to get the best out of a supply chain.
I wanted to know how to calculate (or at least give a rough estimation of) shipping cost in relation to both weight and volume. Is there some kind of formula for this ?
PS : I’m not entirely sure that this is the right place to ask that. please tell me if it isn’t.
The major shippers (UPS, FedEx, and the USPS) all offer great free tools on their web sites for calculating shipping costs based on any number of variations, such as dimension, weight, contents, etc. It’s worth looking into. The company I work for uses them daily because we ship engines and engine parts around the world, so we try to get estimates for the cheapest cost on every one.
I hope this helps.
Good luck!
Shipping cost is usually per-unit. If units in your industry are defined by weight or volume- for example, selling cubic feet of natural gas- then you multiply the shipping cost per these units by the number of units you shipped.
However, I assume that you are running some ecommerce site which charges for shipping and handling and need to find out what this is. If that’s the case, then these are more or less arbitrary values, and you are free to add on an extra 10% (or whatever) to the price as a shipping and handling cost. If you want a more accurate estimate, then you can do analytics and correlate the volume and weight of products sold over various mileages in a particular period to the expenses accrued by your shipping and handling department.
In the vast majority of cases companies just add on some reasonable-sounding value to the purchase price as S&H, or mimic the fees charged by similar companies.
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