Supply Chain Cost Evaluation

Supply Chain Cost Evaluation

LET Logistics

Supply Chain Cost Evaluation

One of the most frequently asked questions by the entrepreneur is: What is the price of my product including international transportation and related charges?

To answer this seemingly simple question, it is important to analyze the cost and time events that the product goes through in detail. Considering the concepts developed on the International Negotiation Terms, INCOTERMS 2020 and the cost of the product at the factory, it is time to describe each one of the costs that are part of the supply chain.

Arrival cost represents the total cost of a product on its journey from the production plant to the buyer’s door.

It includes the price of the merchandise, shipping costs, insurance rates, customs duties and any other charges incurred along the way.

Not only is it important to know how to calculate the cost of unloading, but it is necessary to run a successful business.

Costs in the country of origin

These are all those costs to be paid once the product is ready, up to the agreed place for the delivery of the merchandise.
Example: packing, packaging, documentation, origin location handling, insurance, domestic transportation, warehousing, transfer to the shipment location, customs documentation, bank charges and agents.

International transit costs

These are the costs to be paid from the port, airport or site agreed upon at the origin country to the port, airport or site agreed upon in the destination country.
Example: shipment handling, insurance, transportation, storage, landing handling and agents.

Costs in the destination or importing country

These are those to be paid from the port, airport or place agreed for the reception of the merchandise in the destination country's territory, to the buyer's factory.
Example: Landing place handling, storage, insurance, transportation, handling at the importer's premises, customs documentation, bank fees and agents.