Logistics & Supply Chain
Basic

Cost Per Unit Shipped

Total shipment cost spread across the units delivered.

Formula

Cu=CtotalnC_u = \frac{C_{total}}{n}

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Variables

C_uCost per unit
C_{total}Total freight cost
nUnits shipped

Example

$1200 for 400 units: C_u = $3

How it works

This formula tells you how much of the total freight bill is attributable to each individual unit in a shipment. It works by dividing the full shipping cost by the number of units, so the cost is shared evenly across all items shipped. This gives a simple per-unit shipping cost that can be used for pricing, margin checks, or comparing transport options.

When to use it

Use this when you need to estimate shipping cost per item for orders, inventory records, or profit analysis. It is especially useful when one freight charge covers many identical units in a single shipment.

Worked example, step by step

Total freight cost = $850 Units shipped = 250 C_u = C_total / n C_u = 850 / 250 C_u = 3.40 Cost per unit shipped = $3.40

Common mistakes to avoid

  • Dividing by the number of orders instead of the number of units
  • Using the product cost instead of the freight cost as C_total
  • Forgetting to convert the result into a per-unit amount

Did You Know?

Consolidating small shipments into full loads is the fastest way to drop cost per unit.

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Reviewed & maintained by the FormulaWon editorial teamLast reviewed September 2026