A container has arrived, but what did it cost?
The container landed two weeks ago and the stock is on the shelves, some of it already sold. The supplier invoice was in dollars, paid in two parts at different rates. The forwarder's invoice has ocean freight, terminal handling and a documentation fee. The broker has invoiced for clearance, and the duty and import VAT figures are on a separate statement. The haulier's invoice is still to come.
Your finance person opens last container's spreadsheet, copies it, and starts again: allocating freight by volume, duty by value, and everything else by whatever seemed sensible last time. Meanwhile, the sales team has been pricing from an estimate.
Why landed cost is always late
Landed cost depends on documents that arrive over weeks from several parties, and on allocation choices that are made fresh each time. Nothing collects the charges against the shipment as they arrive, so the calculation waits until the last invoice lands, then gets rebuilt by hand. Stock systems often hold a single cost per product and cannot handle charges arriving after the stock.
Mixed containers make it harder. One container might hold lines from two suppliers, some bulky and cheap, some small and valuable. Allocating freight by value would load the cost onto the small expensive items; allocating duty by volume would do the reverse. Getting that right by hand each time is where most of the spreadsheet hours go.
| Cost element | Usually arrives from | Typical timing |
|---|---|---|
| Goods | Overseas supplier | Before shipping |
| Ocean or air freight | Forwarder | Around arrival |
| Port and handling charges | Forwarder or port agent | At or after arrival |
| Duty and import VAT | Broker or customs statement | After clearance |
| Haulage to warehouse | Haulier | After delivery |
| Currency difference | Your bank | At payment |
What an uncertain landed cost costs you
Sell prices are set from estimates that may be wrong in either direction, particularly when freight rates move. Margins look fine until the real costs arrive, then drop. Stock is valued at the wrong cost, which your accountant has to correct. And finance spends days per container on a calculation that follows the same logic each time.
The landed cost tool we build
- Each shipment is set up from the purchase orders it carries, with lines, quantities, carton volumes and weights.
- Charges are added against the shipment as they arrive, either keyed or read from forwarder, broker and haulier invoices by an extraction step that proposes values for someone to check.
- Each charge type has an allocation basis you choose: by value, volume, weight or quantity. The tool applies it to every line.
- An estimated landed cost is available from the start, using expected charges, and is replaced by actuals as invoices arrive, with the difference shown.
- Final unit costs are written to your stock or accounts system, such as Xero, QuickBooks or a wholesale system, through its API or import.
- Each shipment's cost sheet is kept, so you can compare containers over time.
Which charges count towards stock cost, and how duty and import VAT are treated in your accounts, are decisions for your accountant. The tool applies the rules they set.
After a few containers
Sales see an estimated landed cost as soon as a shipment is booked, and the actual one as soon as the last invoice lands. Finance checks allocations rather than building them. Margin reports use real costs. And when freight rates or currencies move, you can see the effect on landed cost per product straight away.
Is this how your landed costs work?
- Every container has its own landed cost spreadsheet.
- Freight and duty are allocated differently each time.
- Sell prices are set before you know the real cost.
- Stock costs in your system are estimates nobody updates.
- You cannot compare the landed cost of the same product across shipments.