Logistics costs are the costs incurred when a product is moved from one location to another. These costs can include not only the freight charges paid to carriers, but also insurance, duty, customs clearance, handling charges, and more. Depending on the freight terms, these costs can be paid by the supplier and recharged to the customer within the item price or as a trailer charge. They can also be paid by the customer directly to the carrier, insurer, customs, and so on.

As manufacturing companies increasingly look for cheaper materials and components from remote sources, logistics costs have become a more significant aspect of cost management. Accurate product and customer profitability information that includes the total cost of purchasing or selling items supports better pricing and financial analysis decisions.