Transportation, Freight & Distribution worked example

Lane Cost Variance at 110% affected shipment share: a worked example

What does the result look like when affected shipment share reaches 110%? The full calculation is worked below with real intermediate numbers. Use it to explain freight budget misses by lane, carrier, customer, or mode.

The inputs for this scenario

  • Shipments on lane: 96 shipments (unchanged)
  • Rate variance per shipment: 38 $ / shipment (unchanged)
  • Affected shipment share: 110 % (raised for this scenario; the documented default is 100)
  • Fixed lane variance: 1,200 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Variable lane cost variance = shipments on lane × rate variance per shipment × affected shipment share) to the inputs above produces each figure below.
  • At this operating point the engine returns 5,213 $ for total lane cost variance, the number this scenario is built around.
  • At this operating point the engine returns 54.3 $ / unit for variance per lane shipment.
  • At this operating point the engine returns 4,013 $ for variable lane cost variance.
  • At this operating point the engine returns 1,200 $ for fixed charges.

How this compares with the baseline

  • Against the tool's baseline example, where affected shipment share sits at 100% and the headline result is 4,848 $, this scenario comes in 7.52% above the baseline at 5,213 $.
  • A figure at this level is achievable when affected shipment share is genuinely sustained, not just peaked for a shift. It treats per-shipment rate variance as uniform across the affected shipments, so it smooths over mode, weight-break, and accessorial differences that can make individual shipments swing far from the average.

Results at a glance

  • Total lane cost variance: 5,213 $ (headline result)
  • Variance per lane shipment: 54.3 $ / unit
  • Variable lane cost variance: 4,013 $
  • Fixed charges: 1,200 $

Run it with your numbers

  • Every input above is editable in the live Lane Cost Variance calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.