Transportation Cost as a Percentage of Sales: Evaluating Overall Spend to Align Logistics Investment

Transportation Cost as a Percentage of Sales measures total transport spend—including freight, fuel, labor, and overhead—divided by company revenue over the same period. This KPI contextualizes logistics efficiency relative to overall business performance. A rising percentage may signal unplanned surcharges, process inefficiencies, or mismatch between supply and demand. To optimize this metric, integrate cost‑tracking across departments, benchmark against industry peers (often 4–10% of sales), and set reduction targets tied to revenue growth. Cross‑functional initiatives—like network redesign, modal shifts, and volume bundling—help lower the ratio. Tracking Transportation Cost as a Percentage of Sales drives strategic alignment between logistics operations and corporate profitability objectives.