Allocating freight across multiple products

Written by James F. Kollie, Jr. · Published 9 September 2026 · Reviewed 9 September 2026 · 8 min read

Why allocation matters

Freight, insurance, broker fees, terminal handling and inland delivery are charged on the shipment, not the product. Until they are split, per-unit landed cost does not exist. Split them badly and you will discount your best product and promote your worst.

Duty, excise and import taxes are different: they are calculated per tariff line and belong directly to the product that incurred them. Allocate only genuinely shared costs.

The four bases

• By purchase value. Each product takes a share equal to its value over total value. Simple, defensible, matches how duty and tax behave, and the sensible default when nothing about the cargo screams otherwise.
• By weight. Right when the freight was priced on weight — air freight, heavy machinery, steel, tiles, cement. A cheap, heavy product genuinely consumes the freight.
• By volume. Right when the cargo cubes out before it weighs out — furniture, packaging, plastics, empty containers. The bulky item is why you paid for the second container.
• By quantity. Only when items are broadly similar in size, weight and value. Attractively simple and usually the least accurate.

Worked example: three products, one container

Shipment costs to allocate: freight 3,000.00, insurance 200.00, clearing and handling 800.00 — total 4,000.00.

Product        Value     Weight kg   Volume m3   Units
A  Roofing    24,000        9,000        18.0     1,200
B  Cable      12,000        2,000         6.0       400
C  Cooking oil 4,000        4,000         6.0     2,000
--------------------------------------------------------
Totals        40,000       15,000        30.0     3,600

The same 4,000.00 allocated four ways

Basis        Product A   Product B   Product C
By value      2,400.00    1,200.00      400.00
By weight     2,400.00      533.33    1,066.67
By volume     2,400.00      800.00      800.00
By quantity   1,333.33      444.44    2,222.23

Product C carries 400.00 on a value basis and 2,222.23 on a quantity basis — more than five times as much. On 2,000 units that is a swing of 0.91 per unit on a product whose goods cost is 2.00 per unit. The allocation basis, not the freight rate, decides whether that product looks viable.

Turning it into a per-unit cost

Product C, allocated by weight:
  goods                        4,000.00
  duty, excise, tax (its own)  1,180.00
  allocated shipment costs     1,066.67
  ---------------------------------------
  landed cost                  6,246.67
  sellable units                  1,980   (20 damaged)
  landed cost per unit             3.155

Decision rules

1. Ask what the carrier actually charged for. If the freight invoice was priced on weight or on volume, allocate on that. The invoice is the best evidence of cause.
2. Where the cargo is mixed and no single driver dominates, allocate by purchase value. It is easy to explain to a lender, an auditor or a partner.
3. Allocate different cost pools on different bases where that is more honest. Freight by weight, insurance by value, broker fees by value or per line — it is fine, as long as each pool is allocated once and the shares sum exactly to the pool.
4. Never allocate a product-specific charge. Duty on cable belongs to cable.
5. Keep the basis stable between shipments so your product margins stay comparable over time. Change it deliberately, and note when you did.
6. Check the shares add up to the total to the cent. Rounding each share independently loses or invents money.

Free versus Pro on this specific job

The free calculator works on one product or one shipment line at a time. You can allocate by hand — calculate each product's share on your chosen basis, enter that share as a shipment cost on that product, and run the sequence three times. It is entirely workable for two or three products, and it is the right way to learn the mechanics.

TrueCost Pro keeps every free feature and does this allocation for you across a multi-product shipment: you enter each shared cost once, choose the basis, and it splits the cost to the cent, shows each product's share, and carries it through to per-unit cost, margin and the printable report. If you ship mixed containers regularly, that is the difference; if you ship one product, the free calculator is enough and we would rather say so. You can read a full sample report before deciding.

Next

• What CIF includes and what landed cost adds — the figures you are allocating on top of.
• The full landed cost sequence — where allocation sits in the order of operations.

How we calculate and verify this

Every figure on this page is produced by the same calculation engine the free calculator and TrueCost Pro use, applied in the sequence set out in our calculation methodology. We publish no duty, excise, levy or tax rates of our own: rates, bases and exemptions are entered by you, and country presets are explanatory starting points that record where they came from and when they were last reviewed.

Results are estimates. This guide explains general method, not the law of any country. Confirm your tariff line, rate, tax base and exemptions with the destination customs authority or a licensed clearing agent before you commit to a purchase or a price. Nothing here is customs, tax or legal advice. If you find something wrong, tell us and we will correct it.