How to Calculate Shipping and Forwarding Cost of Apparel Export Order?
How to Calculate Shipping and Forwarding Cost of Apparel Export Orders?
Shipment is the process of expediting the goods to the buyer through the proper means of transport so that they reach the buyer safely and at the right time. Shipping and forwarding is the sequence of activities involved in sending the packing or packed apparel to the buyer who is in a foreign country. After the goods are packed, they have to be sent to the buyer safely. Shipping of goods requires two things- a container to carry the carton boxes and a vehicle to carry the container. We going to discuss the cost of shipment to describe How to Calculate the Shipping and Forwarding Costs of Apparel Export Orders.
A handling fee is a quantity or amount that is charged to a customer on top of the purchase price and sales tax. It’s often seen that providers quote a shipping and handling fee with the export order. The handling fee includes or covers the cost of the packaging, repackaging, and movement of goods. In this article, we are discussing How to Calculate Shipping and Forwarding Costs of Apparel Export Orders.
Estimation of Forwarding and Shipping Costs:
In the apparel manufacturing industry, shipping and forwarding cases normally follow the commercial department. The responsible person must have a clear concept of the necessary shipping terms and conditions. Otherwise, apparel shipping and forwarding costs may increase. Calculate Shipping and Forwarding Cost of Apparel Export Orders details given below:
Shipping Cost Calculation Method in Export-Import Business:
Find out the shipping and forwarding cost per apparel by following the below chart:
| SL No. | Parameters | Quantity & Cost |
| 01 | Order quantity | 10000pcs apparel |
| 02 | Total value | Rs. 1000000 |
| 03 | 1 carton box | 200 apparel |
| 04 | Carton box size | 60cm× 40cm× 30cm |
| 05 | Freight charge for shoppers | $40/m3 (1$= Rs. 45) |
| 06 | Terminal handling charges | Rs. 250/m3 |
| 07 | Documentation charges | Rs. 1000 |
| 08 | Transportation | Rs. 8000 |
| 09 | Port charges | Rs. 10000 |
| 10 | Custom expenses | Rs. 12000 |
| 11 | Insurance charges (If any) | Rs. 12000 |
| 12 | Agent commission | 0.2% of total value of the order |
| 13 | Service charge | Rs. 2000 |
Solution:
The below formula has to apply in apparel shipping and forwarding cost calculation method:
Apparel shipping and forwarding cost per apparel,
Total expenses related with shipping
= …………………………………………………..……….. (1)
Shipping quantity
Now,
Total carton box,
= (Order quantity/No. of apparel in each carton)
= (10000/20)
= 50
Again,
Carton box volume,
= (0.6m × 0.4m × 0.3m)
= 0.072m3
So,
The total volume stands at,
= (No. of carton box × Volume of carton box)
= (50 × 0.072)
= 3.6m3
All Shipping Expenses Calculation:
Freight cost,
= (Total volume × freight charge × Rs. 45)
= (3.6 × $40 × Rs. 45)
= Rs. 6480
Again,
Terminal handling charge,
= (Total volume × charge)
= (3.6 × Rs. 250)
= Rs. 900
Again,
Documentation charge – Rs. 1000
Transportation charge – Rs. 8000
Port charges – Rs. 10000
Custom expense – Rs. 12000
Insurance charge – Rs. 12000
Agent commission (0.2% of total value) – Rs. 2000
Service charge – Rs. 2000
So,
Total expense cost stands at,
= Rs. (6480 + 900+1000+8000+10000+12000+12000+2000+2000)
= Rs. 54380
Now,
From the equation-01, we get,
Apparel shipping and forwarding cost per apparel,
= (54380/10000)
= Rs. 5.45