# Activity-Based Costing

*Last updated: 2026-06-23*

> Two shipments of identical weight can demand entirely different effort: one is a straightforward direct delivery, the other involves multiple customs stops, hazardous goods documentation, and cold-chain monitoring.

Two shipments of identical weight can demand entirely different effort: one is a straightforward direct delivery, the other involves multiple customs stops, hazardous goods documentation, and cold-chain monitoring. Activity-based costing (ABC) addresses this directly by allocating overhead not by volume or weight, but according to the actual cost drivers of each activity – transport, warehousing, customs clearance, quality inspection. Each activity carries a defined cost rate, and each order is charged only for the activities it genuinely triggered. For freight forwarders and logistics providers, this means more accurate costing, defensible pricing, and a clear method for identifying unprofitable orders or client relationships. ABC forms the analytical foundation for activity-based cost management (ABCM), which translates these findings into operational decisions.

**Source:** [https://en.wikipedia.org/wiki/Activity-based_costing](https://en.wikipedia.org/wiki/Activity-based_costing)

## Quick Facts

| Property | Value |
|---|---|
| Term | Activity-Based Costing |
| Language | EN |
| Word count | 119 |
| Last updated | 2026-06-23 |
| Source | https://en.wikipedia.org/wiki/Activity-based_costing |

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