What does Unit Cost mean?

Unit cost is the total cost a business incurs to produce, store and sell one unit of a product. It combines fixed costs (such as premises and equipment) and variable costs (such as materials and transport) and is used to gauge how efficiently a company operates.

Why unit cost matters

Knowing the true cost per unit helps set prices, compare suppliers and find savings. In transport, the cost of moving the goods is part of the unit cost, so freight rates feed directly into it.

Unit cost in transport

To work out the transport share per shipment, carriers and dispatchers can use the IMPARGO cost calculator, which estimates the freight cost of a route in advance.