Packaging & Freight Materials Cost Allocation

Export packing is more than a carton. A finished garment is folded, placed in a polybag, grouped with other garments into an export carton, protected with tissue paper and silica gel against moisture, sealed with tape and straps, and marked with carton numbers, style, size ratio, and destination. Each of those materials costs money, and each is consumed at a different rate: polybags per garment, cartons per carton count, tape per carton, tissue per garment.

Packaging cost matters for two reasons. First, it is not small at scale: a few taka per garment becomes tens of thousands per order. Second, it is the cost section buyers check when they suspect a quotation is padded, because packing ratios are verifiable facts. A sheet that shows its ratios can be checked. A sheet that shows one lump sum cannot.

The natural search phrase for this skill is packaging cost per garment, and the method is: fix the ratio, cost each material, divide three ways, then allocate freight through the same ratios.

All three allocation figures come from one total, so they must reconcile exactly. Packing cost per garment equals total packing material cost divided by order quantity. Packing cost per dozen equals per-garment cost times 12, or equivalently total packing cost divided by dozens in the order. Packing cost per carton equals total packing cost divided by carton count, or equivalently per-garment cost times pieces per carton.

The consistency check is the proof. If per-garment cost is BDT 4.7083 and pieces per carton are 24, then per-carton cost must be 4.7083 times 24, which is BDT 113.00. If the sheet shows a different per-carton figure, a divisor is wrong somewhere, and the sheet must be fixed before it reaches a quotation. This check takes seconds and catches most packing arithmetic errors.

Carton count itself comes from the packing ratio: order quantity divided by pieces per carton, rounded up if the division is not exact. A remainder means a part carton, which still needs a carton, tape, and marking, so carton count always rounds up, never down.

An order of 12,000 shirts is packed 1 piece per polybag and 24 pieces per carton. All prices below are illustrative example values.

Carton count is 12,000 divided by 24, which is 500 cartons exactly.

Polybags: 12,000 garments times BDT 2.00, which is BDT 24,000. Export cartons: 500 cartons times BDT 45, which is BDT 22,500. Tissue paper and silica gel: 12,000 sets times BDT 0.50, which is BDT 6,000. Tape, straps, and carton marking: 500 sets times BDT 8, which is BDT 4,000.

Total packing material cost is 24,000 plus 22,500 plus 6,000 plus 4,000, which is BDT 56,500. Per garment it is 56,500 divided by 12,000, which is BDT 4.71 (4.7083 before rounding). Per dozen it is 56,500 divided by 1,000 dozen, which is BDT 56.50. Per carton it is 56,500 divided by 500, which is BDT 113.00. Check: 4.7083 times 24 is 113.00, and 4.7083 times 12 is 56.50. The three figures reconcile.

Note what the sheet does not do: it does not average. It does not spread carton cost over garments by eye. Every figure is one division from the total, so any figure can be re-derived from any other.

Freight is billed by the forwarder per container, per CBM, or per kilogram, never per garment. The allocation must therefore start from the invoice and walk down through the billed unit to the garment.

Sea freight for this shipment is USD 4,500. Per carton it is 4,500 divided by 500 cartons, which is USD 9.00. Per garment it is 9.00 divided by 24 pieces per carton, which is USD 0.375.

CBM gives the second check. A carton measuring 60 by 40 by 40 centimetres is, in metres, 0.60 times 0.40 times 0.40, which is 0.096 CBM. For 500 cartons, total CBM is 500 times 0.096, which is 48 CBM. Freight per CBM is 4,500 divided by 48, which is USD 93.75. If the forwarder quoted per CBM, the same invoice reconciles through this route instead: 48 CBM times USD 93.75 is USD 4,500.

Currency conversion is the last step, with the rate stated on the sheet. At an illustrative exchange rate of BDT 120 per USD, freight per garment is 0.375 times 120, which is BDT 45.00. A sheet that mixes BDT packing and USD freight without a stated rate cannot be audited, because nobody can reproduce the conversion.

Air freight follows the same structure with chargeable weight instead of CBM: actual weight versus volumetric weight, whichever is higher, divided into the invoice the same way. The divisor changes; the discipline does not.

Price terms decide who pays freight, and the cost sheet must respect that line. Under FOB (Free on Board), the seller delivers the goods on board the vessel and the buyer pays international freight. Packing stays on the seller's sheet; international freight does not. Under CFR (Cost and Freight), the seller pays cost plus international freight to the destination port, so freight appears on the seller's sheet. Under CIF (Cost, Insurance and Freight), the seller additionally pays marine insurance, which is its own line, separate from freight.

The common error is putting international freight inside an FOB quotation, which overprices the offer and confuses the buyer, or leaving freight out of a CFR quotation, which underprices it and turns a won order into a loss. The fix is one word on the sheet: the price term, printed beside the freight line, so nobody has to guess which side of the line the freight sits on.

Before any packing and freight sheet reaches a quotation, run this checklist. The packing ratio matches the current buyer instruction, not last season's. Carton count rounds up. Every packing material appears exactly once, including tissue, silica, tape, and marking. The three allocation figures reconcile: per dozen equals per garment times 12, and per carton equals per garment times pieces per carton. Freight is allocated from the forwarder invoice through cartons and CBM, never divided straight by order quantity. One exchange rate is stated and dated. The price term is printed on the sheet. A sheet that passes these checks reconciles with the invoice, and a sheet that reconciles with the invoice survives any buyer audit.

The packing ratio on the cost sheet must match the buyer's packing instruction exactly, and the instruction itself deserves the same care as the costing. A packing instruction states pieces per polybag, pieces per carton, carton dimensions, carton marking format, and any pallet requirement. If the instruction says assorted sizes per carton, the size ratio belongs on the sheet too, because a carton of mixed sizes still costs one carton but needs a different marking and a different pick list.

Barcodes close the loop between packing and the buyer's warehouse. Each carton barcode must encode the style, purchase order, carton number, and quantity, and it must be scanned and verified before the carton is sealed. A barcode that fails at the buyer's dock triggers a chargeback and a relabelling job, both more expensive than the thirty seconds a verification scan takes at packing.

Shipment documentation carries the same numbers once more: packing list quantities by carton, total carton count, total CBM, and gross and net weights. The packing list, the forwarder invoice, and the cost sheet must all show the same carton count and the same CBM. When all three documents agree, customs clearance, buyer receiving, and freight payment all proceed without queries, and the order closes cleanly.