5 Shipping Cost Formulas Every Importer Should Know

You get a freight quote, mentally compare it to what you paid last time, and move on — until the actual invoice arrives 40 days later and it's nowhere close to what you expected. Somewhere between placing the order and the bill landing, a formula you never ran yourself decided what you actually owe.

Most of shipping cost isn't negotiation. It's math — and it's math you can do yourself before you ever confirm an order. These are the five formulas that matter most, starting with the three that decide your freight bill directly, followed by two more that decide whether the whole order was actually worth it.

3. Chargeable Weight — The Rule That Actually Decides What You Pay

This isn't a calculation so much as a comparison, but it's the most important step of the three, because it's the one that tells you which of the first two numbers actually matters.

Chargeable Weight = whichever is higher: Actual Weight or Volumetric Weight

Using the example above: actual weight was 60kg, volumetric weight was 200kg. The chargeable weight is 200kg, and at Proc360's normal-goods air rate of $11.40/kg, that's $2,280 in freight. If you'd budgeted based on the 60kg actual weight (60 × $11.40 = $684), you'd be short by well over $1,500 on a single shipment.

This is also the number that tells you whether air freight makes sense at all for a given order, or whether sea freight would work out cheaper once the real chargeable weight is known.

4. Total Landed Cost — What the Goods Actually Cost You

Freight is only one line item. The number that actually determines whether an order was profitable is your total landed cost — everything it took to get the goods from your supplier to your door.

Landed Cost = Product Cost + Freight + Customs Duty + VAT + Local Delivery + Any Certification Fees

Worked example: Product cost ₦300,000, freight ₦120,000, customs duty and clearing ₦70,000, local delivery ₦15,000.

• Total landed cost: 300,000 + 120,000 + 70,000 + 15,000 = ₦505,000

Pricing your resale goods off the product cost alone — without running this full formula — is the single most common way importers underprice their own margin without realizing it.

5. Selling Price — Turning Landed Cost Into an Actual Margin

Once you know your real landed cost, this is the formula that sets a price that actually accounts for it, rather than guessing at a markup that feels right.

Selling Price = Total Landed Cost × 2.5 to 4

Worked example: Landed cost of ₦505,000 per batch, split across 50 units, gives a per-unit landed cost of ₦10,100.

• At a 3x markup: ₦10,100 × 3 = ₦30,300 selling price per unit

The multiplier you choose depends on your product category and competition, but the starting number has to be the real landed cost — not the product price you saw on the supplier's page.

Quick Recap

1. CBM — decides your sea freight bill

2. Volumetric weight — decides your air freight bill

3. Chargeable weight — the rule that tells you which of the two actually applies

4. Total landed cost — what the order actually cost you, beyond just the product price

5. Selling price — turns that real cost into a margin instead of a guess

Run these five before you confirm your next order, not after the invoice arrives.

Skip the Manual Math Entirely

Proc360's shipping cost calculator runs the CBM, volumetric weight, and chargeable weight comparison for you automatically, using your actual cargo dimensions — so you know your real freight cost before you book, not after. Combined with transparent sea and air rates and included customs clearance, your landed cost stops being a guessing game.

Sign up with Proc360 and calculate your next shipment's real cost before you commit to it.

1. CBM (Cubic Metre) — The Formula Behind Every Sea Freight Quote

If you ship by sea, this is the single most important number attached to your order. Sea freight (LCL) is priced by volume, not weight — you're paying for the space your goods take up in a shared container, not what they weigh on a scale.

CBM = Length (m) × Width (m) × Height (m)

For multiple cartons, work out the CBM of one carton and multiply by the total count.

Worked example: You're shipping 30 cartons, each measuring 0.6m × 0.4m × 0.4m.

• One carton: 0.6 × 0.4 × 0.4 = 0.096 CBM

• 30 cartons: 30 × 0.096 = 2.88 CBM

• At Proc360's sea freight rate of $390/CBM: 2.88 × $390 = $1,123.20 in base freight

Get this number wrong — or let a supplier's oversized outer packaging inflate it — and you're paying for space you didn't need to buy.

2. Volumetric Weight — The Formula Behind Every Air Freight Bill

This is the one that catches almost every first-time air freight shipper off guard. Air freight isn't billed on what your goods actually weigh — it's billed on chargeable weight, and volumetric weight is one half of that equation. It converts the space your goods occupy into an equivalent weight figure, because a box of foam pillows takes up as much aircraft space as a box of dense electronics, even though it weighs a fraction as much.

Volumetric Weight (kg) = Length (cm) × Width (cm) × Height (cm) ÷ 6,000

Worked example: 20 cartons of fashion accessories, each carton weighing 3kg and measuring 50cm × 40cm × 30cm.

• Actual weight: 20 × 3kg = 60kg

• Volumetric weight per carton: (50 × 40 × 30) ÷ 6,000 = 10kg

• Total volumetric weight: 20 × 10kg = 200kg

That's more than triple the actual weight — and it's the number that ends up on your invoice, not the 60kg you were expecting.