What’s Missing in Your Total Landed Cost

One of the world's largest 3PL provides this wonderful graphic and article concerning why you should be including your total landed costs. Applicable to those of us involved in transportation or the budget side of supply chain, the article explains how leaving the total landed costs out of budget calculations essentially means you're using incomplete data. Why is this important? Understanding total landed costs helps build more accurate SKU-level data. This in turn helps you charge your customers more accurately and better understand how various products play a part in weight, profit, and cost: Accurate identification of all costs affords visibility to your total costs, and allows you to understand and influence total cost elements. Without it, you have missing links in your TLC calculation. What you really want are meaningful metrics. When you only measure things like cost per mile or cost per pound, the closest you can get to total landed costs is to say, “This is my true cost to deliver nationwide.” But when you have deeper metrics, you can say, “This is my true cost to deliver this SKU to this customer.” Achieving Total Landed Cost (TLC) means having a broad knowledge of returns, damages, and other particular costs associated with SKUs. This drives optimization and mitigation of a multitude of risks which would otherwise slip through the cracks of day-to-day work.

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