How to allocate freight costs across products
Assign product-specific charges directly, then split shared costs using the weight, packed volume or handling activity that best explains each charge. Record the basis, replace estimates with actual invoices and check that all allocations reconcile. Request product-level packing data from Cambridge China Bridge.
Build a shipment cost sheet
Start with a shipment reference linking the goods invoices, packing lists, freight quote and subsequent bills. Give each product code its own row, with shipped quantity, packed volume, gross weight and carton or pallet references. Ask for mixed cartons to be broken down by product rather than assigning their whole volume to whichever product appears first.
Keep each charge in a separate column, showing its supplier, invoice reference, currency, estimate or actual status, and allocation basis. Mark costs already included in the goods price so they are not added again. Our landed price guide explains the overall cost components; this sheet explains how to divide the shipment costs between products.
Choose a basis that explains the charge
Allocate a charge directly when the invoice identifies the product responsible. For shared freight, ask the forwarder what drove the bill: packed volume, gross weight, chargeable weight or occupied container space. Use matching product data. Do not default to purchase value: a bulky, inexpensive product can consume more transport capacity than a compact, expensive one.
For each shared charge, divide the product's relevant measure by the total measure for the products covered, then multiply by the charge. Include shared packaging space consistently. Record the reason for your choice and apply it to comparable shipments; change it when the charging conditions change, with an explanation.
| Charge | Starting basis | Check before allocating |
|---|---|---|
| Volume-driven freight | Packed volume | Include outer packaging and allocated shared pallet space |
| Weight-driven freight | Gross weight | Use the weight basis shown on the bill |
| Air or courier freight | Product contribution to chargeable weight | Ask how package-level charging affects mixed cartons |
| Pallet handling | Pallet movements or occupied pallet space | Check whether products needed different handling |
| Flat shipment documentation charge | Documented, consistent shared basis | Use equal product shares only where the administrative effort is comparable |
| Product-specific repacking | Direct assignment | Identify the affected product and supporting invoice line |
Handle shared and exceptional charges
Split shared terminal handling, clearance fees and final delivery separately where their charging bases differ. A flat documentation fee need not follow the freight split. Where no clear driver exists, choose a reasonable proxy such as packed volume, record why it fits and retain the calculation. Do not present this internal costing choice as a prescribed customs method.
For storage, delays, examinations or special handling, record which products were affected and what caused the charge. Assign identifiable product-specific work directly; spread genuinely shared costs across the affected products. Flag exceptional costs separately so they do not silently become the normal freight assumption for future orders.
Keep customs valuation separate
Keep separate columns for transport to the UK border and subsequent delivery. Ask your customs agent to confirm how freight and insurance to the border should be treated in customs value, using what goes into customs value as a starting point. HMRC says UK transport costs included in the total freight charge can be deducted when separately charged and distinguishable. Ask for the supporting breakdown rather than treating your internal product split as evidence of the border split.
Give the customs agent the invoices and packing data, and ask how shared additions were assigned to declaration lines. A declaration line may group products, so keep a mapping to your product codes. Compare its figures with your sheet and investigate differences; use our guide to checking and correcting an import declaration where needed.
Reconcile estimates to actual invoices
Retain the quoted estimate, then record each actual invoice and credit note against the same charge category. Apply the documented basis to the actual amount. Check that product allocations add back to each charge and that the shipment total matches the invoice register. Resolve duplicates, missing bills and rounding differences explicitly; mark the costing provisional while charges remain outstanding.
Keep a bridge from estimated to final cost by product, showing changes caused by packing measurements, freight charges, handling and currency conversion. Preserve the original and revised calculations with the supporting documents. Divide each product's allocated charge by its relevant quantity to obtain a unit charge, keeping the sellable-unit adjustment explained in the landed price guide visible and separate.
Frequently asked questions
Should I split freight by product value?
Use value only when it reasonably explains the charge. For capacity-driven freight, packed volume or the carrier's weight basis usually gives a more useful split. Record why you chose it.
Can I split freight equally across products?
Only if the products consume comparable transport resources. Equal shares can distort margins when carton sizes or weights differ. A flat administrative charge may justify a different basis from freight.
How do I allocate mixed-carton freight?
Ask for each product's packed volume and gross weight within the carton. Allocate shared packaging consistently, then check that the product measures reconcile to the carton totals.
What if the final freight invoice is higher?
Replace the estimate with the actual charge using the recorded basis. Show the change by product, investigate unexpected extras and check that the revised allocations match the invoice total.