Total Expense
The cumulative financial expenditure required to purchase, transport, and receive packaging materials at a manufacturing facility represents the true cost of acquisition. In calculating the landed packaging cost, logistics managers combine the base purchase price of the cartonboard with freight, customs duties, insurance, and handling fees. This total provides a complete view of the supply chain expense.
It does not include the cost of in-house waste during assembly or the storage fees incurred after arrival. This calculation is used to compare international board mills against domestic suppliers on an equivalent basis.
Logistics Impact
Shipping efficiency has a direct impact on the unit cost of packaging. When determining the landed packaging cost, the distance from the board mill and the transport method are critical factors. Lightweighting the board can reduce these freight expenses by allowing more units per pallet.
This reduction offsets the higher cost of premium boards.
Procurement Decision
Purchasing decisions must evaluate all logistics costs rather than just the ex-works price of the board. A low-cost supplier located far away may yield a higher landed packaging cost than a local supplier with a higher base price. This comparison guides the sourcing strategy for high-volume consumer goods packaging.
