Landed Cost
Landed Cost refers to the total expense incurred to deliver a product to its final destination, including the cost of goods, freight charges, insurance, customs duties, taxes, and any handling or port fees. In logistics ERP systems, calculating landed cost is critical for ensuring accurate pricing, profitability analysis, and financial forecasting. It helps logistics providers and their clients determine the true cost of a shipment, enabling informed decision-making and margin control.
How Landed Cost Works in Logistics?
The ERP system calculates landed cost by aggregating shipment details such as product value, origin, weight, transport mode, and applicable duty rates. It pulls real-time or predefined data from modules like freight billing, customs duty calculators, and tax tables. This consolidated cost is then linked to inventory valuation, invoices, or sales orders, ensuring accurate downstream reporting and compliance with financial policies across international shipments.
Logistics Leadership in ERP Systems
Strategic Planning
Landed cost visibility helps logistics leaders forecast total delivery expenses, compare shipping routes, and select cost-effective suppliers and carriers during procurement planning.
Operational Efficiency
Automated cost breakdowns in ERP eliminate the need for manual spreadsheets, enabling faster approvals, accurate quoting, and timely order confirmations.
Resource Optimization
By understanding full shipment costs, logistics teams can consolidate orders, optimize cargo loads, or adjust Incoterms to reduce unnecessary charges.
Technology Integration
ERP systems integrate landed cost modules with customs, finance, and transport databases, ensuring smooth data flow across tax rules, HS codes, and currency conversions.
Performance Monitoring
Comparing actual landed costs against estimates allows teams to evaluate vendor performance, track cost deviations, and improve budgeting accuracy over time.
Conclusion
Landed Cost is a vital financial metric in logistics ERP systems that enables smarter pricing, better risk control, and full visibility into shipment profitability. By automating this calculation, ERP platforms help logistics providers maintain control over margins, ensure compliance, and deliver value across global supply chains.