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The Costs of Goods in Transit (In-Transit Inventory) in Container Shipping

Goods in transit refer 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 (https://www.shipsgo.com/service-finder/guanta/los-angeles). It takes 30 days appro..

Goods in transit refer 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 (https://www.shipsgo.com/service-finder/guanta/los-angeles). It takes 30 days approximately. 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 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 30 days approximately.

So the cost of good 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.