What is the meaning of the cost of goods in transit?
The cost of goods in transit refers to merchandise and other inventory items that have been shipped by the seller but have not yet been received by the buyer. Let’s take the shipping journey from Guanta to Los Angeles. It takes approximately 30 days. To calculate the costs of in-transit inventory, logisticians should know the annual inventory costs of their companies. It changes approximately 20-25 % of the inventory at hand. In this case, let’s take it at 25 %. Also, also let’s take the value of cargo in a 20’ container as of $50,000.
Do the math;
average shipment value of $50,000 x annual inventory carrying cost of 25% = $12,500 per year/365 = $34.24 per day).
From Guanto to Los Angeles, it takes approximately 30 days.
So the cost of goods in transit is equal to $1,027 per container.
If you have 50 containers shipment per month; your monthly cost of goods of transit is equal to $1,027 x 50 = $51,350
As a logistician tour task is to reduce the transit time and, needless to say, decrease the in-transit inventory costs. ShipsGo service finder can offer to assist and offer you Long Beach (6 km away from Los Angeles) instead of Los Angeles as POD (Port of Discharge) for the sake of reducing transit times for 4-5 days.
ShipsGo’s vision is to make people happy with the information. Since the beginning of our journey in the container transportation business, we have been trying to organize the shipping industry’s information and make it accessible universally. We have developed our two well-known products in the digital container transportation market; container tracking and route finder. These two products were developed for “visibility” in container transport. We provide information on the current position of containers and carriers’ route performances (transit time and reliability). We have reached 5,000 daily searches on our website from 70+ countries and plan to reach 30,000 daily searches worldwide.