Quincus

Cost to serve

You cannot optimize a margin you cannot decompose.

Cost is computed at the shipment level rather than allocated by revenue share. Every activity that touches a shipment carries a measured rate, and the sum reconciles back to the source system.

LIVE

Decompose a shipment

Handling touches3
$650.00100%Revenue$40.326%Linehaul$21.603%Handling$6.201%Sortation$13.202%Dwell$116.0018%Last mile$452.6870%Contribution
Rates applied
  • Linehaul$0.00042 / kg·km
  • Handling$0.06 / kg · touch
  • Sortation$6.20 flat
  • Dwell$2.20 / hour
  • Last mile$28 + $0.11 / km
  • Customs$95 flat
  • Exception recovery$210 flat
Total cost to serve$197.32
Contribution$452.68
Margin69.6%
Largest cost driverLast mile · $116.00
Runs in your browser on a simplified version of the production method. Illustrative of behavior, not of production performance.

The problem class

Why margin hides.

Activity-level cost attribution.

Each touch, from linehaul to exception recovery, priced separately at a measured rate. Allocation by revenue share averages the losses across the winners and calls the result a margin.

Marginal versus fully absorbed cost.

Shadow prices from the solve give the true marginal value of one more unit of capacity.

Auditability back to the source system.

Every cost figure has a lineage. If it cannot be reconciled to the source, it does not ship.

The method

How margin is decomposed.

Quincus computes cost at the shipment level rather than allocating overhead by revenue share. Every activity that touches a shipment carries a measured rate, and the sum is auditable back to the source system.

Cs=∑a∈Ausa raC_s = \sum_{a \in A} u_{sa} \, r_a

Usage u of activity a by shipment s, multiplied by the measured rate r for that activity. Linehaul, handling, sortation, dwell, last mile, customs, and exception recovery are each carried separately.

Marginal versus absorbed
πi=∂Z∗∂bi\pi_i = \frac{\partial Z^*}{\partial b_i}

The shadow price on a capacity constraint is the true marginal value of one more unit of that resource. It is the number that should drive a buy versus build decision on capacity, and it falls out of the same solve that produced the routing plan. Fully absorbed cost answers a different question and answers it after the fact.

What this changes

What becomes visible.

01

Loss-making lanes identified at shipment level rather than inferred from a P&L.

02

Capacity buy versus build decisions driven by shadow price.

03

Cost figures that reconcile to the source system.

Where it runs

Sectors that lean on this capability.

Air cargoFreight forwardingAgricultural and perishable

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