How to allocate freight and duties across products: by value, weight or quantity (2026)
Allocate each cost with the key that drives it: freight by weight (air, courier) or volume (sea freight billed per cubic metre), insurance and ad valorem duties by value, and duties by value × duty rate when the lines have different HS codes. Allocating everything by quantity is the simplest key and the one that distorts most, because a cheap light item then carries as much freight as a heavy one. Whatever the key, the allocated cents must add up exactly to the bill.
The five keys compared on one shipment
Example: 100 phone cases (2.00 each, 0.05 kg, 0.0005 m³ each) and 10 lamps (30.00 each, 1.5 kg, 0.02 m³ each) share a 250.00 freight bill.
| Key | Cases share | Freight per case | Lamps share | Freight per lamp |
|---|---|---|---|---|
| Value (200 vs 300) | 100.00 | 1.00 | 150.00 | 15.00 |
| Weight (5 kg vs 15 kg) | 62.50 | 0.625 | 187.50 | 18.75 |
| Volume (0.05 m³ vs 0.2 m³) | 50.00 | 0.50 | 200.00 | 20.00 |
| Quantity (100 vs 10 units) | 227.27 | 2.27 | 22.73 | 2.27 |
| Equal per line (2 lines) | 125.00 | 1.25 | 125.00 | 12.50 |
By quantity, a 2.00 case carries 2.27 of freight and its cost more than doubles, while the lamp looks cheaper than it is. The key changes your margins by product, not the total.
Which key for which cost
| Cost | Key that follows how it is billed | Why |
|---|---|---|
| Air or courier freight | Weight (or chargeable weight) | Carriers bill per kg |
| Sea freight, LCL | Volume | Consolidators bill per cubic metre |
| Sea freight, full container | Volume or value | The box is paid whatever the mix |
| Cargo insurance | Value | Premium is a percentage of insured value |
| Duties, one rate for all lines | Value | Duty = rate × customs value |
| Duties, several HS codes | Customs value × rate of each line | A 0% line must not carry duty paid on a 12% line |
| Broker / clearance fee | Value or equal per line | Flat fee per entry, sometimes per tariff line |
| Bank wire / FX fee | Value | Follows the amount paid to the supplier |
Duties when lines have different rates
Two lines of 1,000.00 each, one at 0% and one at 12% (illustrative rates): the customs entry shows 120.00 of duty. Spread by value, each line gets 60.00. Spread by value × rate, the 0% line gets 0.00 and the 12% line gets 120.00, which is what customs actually charged on it.
The duty base differs by country:
- United States: the transaction value excludes the costs of transportation and insurance for the international shipment to the US (19 CFR 152.103). Duty is computed on the goods value.
- European Union: the customs value includes transport and insurance costs up to the place where the goods enter the EU (Union Customs Code, art. 71; French customs, valeur en douane). Duty is computed on goods + freight + insurance to the border.
If you have the customs entry, keep its total and use the rates only to share it. If you only have rates, compute duty line by line as base × rate.
Rounding without losing a cent
Shares rarely fall on whole cents. 100.00 split over three equal lines gives 33.333… each; rounding each to 33.33 loses 0.01. The largest remainder method fixes this: round every share down to the cent, then hand the leftover cents one by one to the lines with the largest fractional parts. Result: 33.34 + 33.33 + 33.33 = 100.00. Apply it per cost, in the store currency, after conversion.
| Line | Exact share | Rounded down | Fraction | Final |
|---|---|---|---|---|
| 1 | 33.3333 | 33.33 | 0.33 | 33.34 |
| 2 | 33.3333 | 33.33 | 0.33 | 33.33 |
| 3 | 33.3333 | 33.33 | 0.33 | 33.33 |
| Total | 100.00 | 99.99 | 100.00 |
On ties the first line takes the cent. The landed cost calculator applies this to every cost and shows a check per column before you download anything.
FAQ
Can I use different keys for different costs on the same receipt?
Yes, and you should: freight by weight, insurance by value and duties by rate on the same shipment is normal. Each cost is allocated on its own, then the shares are added per line.
What if some lines have no weight?
A weight key needs a weight on every line that receives freight. Fill the missing weights (the product's shipping weight is a reasonable proxy) or use another key for that cost; do not let missing values count as zero.
Should I spread costs over units received or units ordered?
Over units received. Short-shipped units did not travel and do not carry freight; the supplier credit for them lowers the goods value.
What about a supplier discount on the whole invoice?
Treat it as a negative cost spread by value, so each line's purchase price is reduced in proportion.