Premium Freight Cost Per Part Calculator
Premium freight is the hidden tax on a supplier that missed a ship date. This calculator isolates the excess over standard freight, converts it to cost per part and percent of revenue, and lets you see how fewer expedites change the annual number.
Your numbers
Air, hot shot, charter or team driver invoice.
What the regular lane would have cost.
100 if the cause is yours, lower if the customer shares cost.
Your results
Uses invoiced excess freight only. Overtime, sorting and administrative handling are not included.
Annual premium freight absorbed vs events per year
Sweeps Premium freight events per year from 0 to 120, holding your other inputs fixed.
Premium freight reporting from ERP data
Optional: talk through how to log premium freight causes directly from shipments in your ERP.
Optional. The tool and every export work without this. No spam.
How to use it
Pull your premium freight invoices from the last twelve months, average them, and compare with what the same weight and lane would have cost by regular carrier. Enter how many parts shipped on a typical expedite, then the share your company bears. Customer approved premium freight may be charged back, but customers commonly expect the supplier to absorb it when the supplier caused the shortfall.
- Separate supplier caused, customer caused and carrier caused events
- Use excess over standard, not the full invoice
- Update the average when fuel or air rates change
Formula
Excess per event equals premium shipment cost minus the standard freight for the same load. Annual cost equals events times excess times the absorbed share. Percent of revenue divides that by volume times price. The chart sweeps event count, so you can see the savings from cutting expedites by half before investing in extra safety stock or capacity.
Reading the result
Premium freight above a few tenths of a percent of sales usually deserves a root cause review. Compare the annual figure with the carrying cost of extra buffer inventory at the plant. If a small bank of finished goods costs less than the annual expedite spend, the buffer pays for itself.
Common mistakes
Teams track only the largest air shipments and miss the many small courier and hot shot trips that add up. Also avoid counting the full premium invoice as a loss when you would have paid standard freight anyway. Capture the cause code on every event so the Pareto points to the process, not the carrier.
Frequently Asked Questions
Does premium freight include overtime?
Not here. This tool covers the freight invoice excess only. Add overtime and sorting cost separately if you want a total cost of the recovery effort for each late event.
Who pays premium freight in automotive?
It depends on the cause and the contract terms. Customers usually expect the supplier to bear it when late delivery is the supplier's fault, while customer schedule changes may be shared or recharged.
What is a reasonable target?
Many plants aim for as close to zero as possible. Use your own history as the baseline and track the trend per quarter, because the right figure depends on program maturity and launch status.
Should I include inbound premium freight?
Yes, if you want a plant total. Run the calculator once for outbound and once for inbound, then add the annual figures for a combined view.
Netray can help join shipment, carrier invoice and delivery schedule data from your ERP so premium freight causes show up automatically instead of in a monthly spreadsheet.
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