This document provides a guide to calculating total landed costs in Canada. It discusses the key factors to consider, including inbound transportation, occupancy, inventory, and outbound transportation costs. Specific variables are outlined for each cost category, such as transportation modes and rates, ownership vs leasing options, financing costs, and distribution points. The guide emphasizes regularly updating the total landed cost model with new data to improve supply chain planning and decision-making. Accurately accounting for all related expenses is important to boost business profitability.

2. www.investcalgaryregion.ca
Table of Contents
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7

3. Introduction
A guide to calculating total landed cost
in Canada
Landed costs can make or break a business.
Yet many businesses, when considering transporting goods to and across Canada,
don’t understand what goes into landed cost calculations or what to consider when
That’s partly
what goes in to the total landed cost calculation.
Whether
Simply stated, total landed cost is the amount of all costs beyond the raw
materials or manufacturing and takes into account the delivery of products
How h
Typically,
• Inbound transportation (How much it’s going to cost to get that product
• Occupancy (Where it’s going to be stored when it gets there. This can take
• Inventory
• Outbound

4. Cost s
Total
You n
This e-b
anywhere.
s a guide on the areas to consider in calculating landed cost and how to
keep those costs low so you can ultimately boost your bottom line.

5. Chapter 1
Bringing
factors
More impor
Canada is making strides reducing barriers to business. The country boasts a
Still, lik
Those cost

6. Foreign Trade Zone
The Calgary
companies.
Using an r
Retailers
centre.
those bills are paid.
So, in h
For those who choose to go it alone or handle the paperwork in-house, the
step-by-step guide

7. Here’s a checklist of Canada’s importing
requirements:
• Obtain business number
• Determine
• Determine the
whether the goods are controlled, regulated or prohibited by the
department or agency.
• Ensure that the goods are marked
• Determine
.
• Determine
• Obtain
• Determine the
• Select
Submit
Note:
company.

8. Chapter 2
knowing the cheapest and most
transporting goods
Whether
transportation needs to be considered in the landed cost calculation.
The mode
metimes the cheapest way is not the best way.
Though i
there are times when using the most
can keep your total landed
costs lower.
hin a mode, the corridor
chosen to transport goods can
On a global scale, Canada ranks
among the ,
So, it makes sense to ship cargo to this seaport and then the shortest possible
distance to a local distribution centre, right?
always.

9. Choosing the correct mode of transportation for
your business
If doing it another way can reduce the total landed cost then you might want
This needs to be considered when managing your supply chain and choosing
Depending
For othe
The inter
total landed cost.
The better the networks, the more nimble a business can be.
Occupancy
Choosing the appropriate mode of transportation is critical to ensuring your
It begin
Inland Ports
Once y
Inland port
While
products, they should be considered when calculating the total landed cost.

11. Chapter 3
Boosting your bottom line by
Shipping to the biggest Canadian market
many companies.
shipping products directly to the biggest
business.
If you
Many
out through that distribution point can
on total landed cost. Transporting to a warehouse or distribution centre in an area
There
seaport to a smaller market.
location.

12. Inland It’s on the rise
geography and including all the costs that go into total landed cost.
Still, The
Knowing
Sometimes simply looking what the competition is doing is a good starting point.
building new outlets and consider setting up across the street.
The
•
countries.
• Rail
• Air
• Ocean

13. Chapter 4
How transit time and local
infrastructure impacts your
bottom line
Daily decisions mad
Every
There
Time

14. Some other important questions to consider include:
• Is ther
• Is there easy access to rail, or are those intermodal networks strategically
congestion a problem and will it cause shipping delays?
the more money that stays in your company’s pocket.
For
year, per truck. That adds up. Fast.
Whether every level of government has a
Collabor
It’s i
Connect o
These group
landed cost model.

15. Chapter 5
How to Choose the best location for
your business?
One o
Model
transportation.
Calculating
Though
To

16. Total Landed Cost Model
For the purposes .
INVENTORY: $4,765,206
INBOUND: $3,609,000
Total Landed Cost Model
OCCUPANCY: $1,248,000
OUTBOUND: $1,083,624
OUTBOUND 10.12%
OCCUPANCY 11.66%
INVENTORY 44.51%
INBOUND 33.71%
hat the numbers used in the model are hypothetical.
the Total Landed Cost Model, you will need to take into
Within each buc
calculating your Total Landed Cost.
UND
• When n
etc. will need to be considered.

17. • When
• Other
cycle. This includes any interest paid on the purchase price.
• Other
UND
• Costs,
• When
To ens
You wi
your model.
This ensure
to build an accurate landed cost model you will need to allow enough
You will a
accuracy that is suitable to your needs.

18. Chapter 6
Building
understanding the best choice
This is o
So
Here are some tips to help you when deciding whether you should lease a larger

19. 1. Lease It
Image Credit: Roland Tanglao Creative Commons
Pros to leasing space
• The
long-term lease with an option to renew.
• It doesn’t tie up needed capital.
• You can take
• Your lan
maintenance.
structure built to suit your needs and lease space in that building. This can
Cons to leasing space
• Finding
also lose your lease to a higher bidder or building sell-out, and you’re at the

20. 2. Buy It
assurance that you get what you
see.
• You
• You’ll a
Cons to Buying
• The space
translate into much higher costs than the purchase price alone.
• It may n
• The
• Your compan
• You’ll also nee
and lawn care.
Photo credit: Creative Commons

21. 3. Build It
• You can inc
access, sophisticated heating and cooling systems.
• You can design a contemporary or more traditional layout that compliments
• The design
• Low intere
Cons to Building
• You may
n in the economy happens, owning a building means you’ll
and management.
• Similar
begin work.
•
•

22. • You’ll
Surround yourself with the right people
determine the right time to buy or sell, the right locations to consider, and the nuts
Here are some of the experts you may consider contacting:
• Accountant:
•
• Commercial broker:
• Mortgage broker:
decision-making process.
It may be a
What’s eco
In the
• Project Manager:

23. Chapter 7
of understanding
it means to you
Canada’s comi
, the
Skills sh
petroleum, transportation and logistics.
These in
unless immediate measures are taken.
ust around the corner.
Students ma
e industries is Supply Chain Management.

24. What is Supply chain management?
Supply cha
customers in a supply chain.
Supply
consumption.
In other
Supply Chain
Supply solutions?
What are
e more women in the competition for supply chain talent
The supply chain sector has traditionally been male dominated, but current trends
There is a mo

25. issue’.
states in a recent Globe and Mail article
The WI
WISC also seeks to encourage employers to consider their retention and succession
Just as the supply chain sector is broad, so too can supply chain skills and
Those
Skills r
• Financial planning

26. • Forecasting
• Mechanical skills
• General management and business
• Languages
chain sector labour force by sub-functions are:
• Senior management
• Warehousing
• Transportation
• Marketing and Sales
Photo Credit: Dave McLean Creative Commons
chain knowledge and skills.
These
graduate studies.
Linked to these programs are apprenticeship and industry training programs and

27. A helpful checklist when calculating
total landed cost
Calcula
There a
and Outbound transportation — that a total landed cost model should calculate. It’s
not always an easy task but it is a critical one.
Here’s a handy checklist to help highlight the most important things to consider.
1. Inbound Transportation
Capacity
Duration
Other variables to consider:
Rates
Many
Seasonal rates, where they apply
costs
Strategic

28. 2. Occupancy
Ownership
lease or buy
Material
maintenance
Distribution points
Labour
3. Inventory (cash to close cycle)
Capital costs
product ownership
Costs asso
cycle stock
rates
nancing options
4. Outbound Transportation
From your
Duration

29. Here are some other variables to consider:
Man
Seasonal rates, where they apply
Once yo
You will want
your supply chain network.
You will want to con
second and third bottom line.
Many compan
agility.
Depending on
decision on network design.
Acknowledgements
Reg Johnston
Corrie Banks, Triskele Logistics Ltd.
Jim Brown