Cost Composition
Sourcing decisions in the apparel supply chain rely on calculations that account for all expenses incurred from the supplier to the garment factory door. The total landed cost per meter represents the cumulative sum of the purchase price and all transport, duty, and processing fees divided by the total fabric length.
Logistics Calculation
To calculate this figure, a sourcing manager must compile both direct and indirect logistics expenses. The total landed cost per meter begins with the free-on-board price from the textile mill, which covers only the manufacture and loading of the fabric roll. To this, the manager adds marine or air freight, cargo insurance, port handling fees, customs brokerage charges, and any import tariffs applied by the destination country.
Finally, domestic inland transportation from the port of entry to the garment manufacturing facility is included in the sum. This grand total is divided by the total meters of fabric received to arrive at the final per-unit cost.
Sourcing Strategy
Comparing fabric prices from different global regions is inaccurate without calculating this comprehensive sum. The total landed cost per meter often reveals that a fabric with a low factory-gate price in a distant country is more expensive than a domestic fabric once shipping and tariffs are included. High tariff rates or long shipping distances can quickly erode the savings of a cheaper manufacturing base.
Sourcing departments use this calculation to make informed decisions about whether to source from nearby countries or use long-distance ocean freight.
Financial Evaluation
Apparel brands use this unit-cost calculation to determine the viability of retail price points and to negotiate supplier agreements. An unexpected increase in freight rates or customs duties raises the total landed cost per meter, which directly reduces the profit margin of the finished garment. Sourcing managers must therefore monitor global shipping indexes and trade regulations to anticipate cost fluctuations.
By establishing long-term contracts with freight forwarders and selecting mills in countries with favorable trade agreements, brands can stabilize their material costs.