The number everyone can see
A breakbulk transload has a per-ton cost you can build from the bottom up. Gang hours at the labor rate, the equipment on the berth, the hours it takes to work the vessel, divided by the tons moved. Call that the direct cost.
In the example below the direct cost is $34.86 per metric ton at an annual volume of 60,000 tons. That is a real number and it is not wrong. The mistake is treating it as the floor.
The cost that does not move
Underneath the per-ton work sits cost that exists whether or not this particular cargo shows up. Yard and facility charges. Equipment on a monthly rather than hourly basis. Supervision that is not booked to a gang. Insurance, compliance, the share of overhead the job should carry.
Those do not scale with tons, so they do not appear in a per-ton build-up. If the annual figure for them is $83,400, then the true annual cost of doing this business is not $2,091,600. It is $2,175,000.
Pricing at direct cost does not break even. It loses $83,400 a year, and it does it quietly, because every individual job looks like it covered itself.
The worked example
Same job, priced four ways. Revenue is price times 60,000 tons, and profit is revenue minus the $2,175,000 annual cost.
| Mult | Price row | $ / MT | Annual revenue | Annual profit | Margin |
|---|---|---|---|---|---|
| × 1.00 | At direct cost | $34.86 | $2,091,600 | −$83,400 | −4.0% |
| × 1.04 | Break-even | $36.25 | $2,175,000 | $0 | 0% |
| × 1.15 | Standard markup | $40.09 | $2,405,400 | $230,400 | 9.6% |
| × 1.22 | Chosen | $42.50 | $2,550,000 | $375,000 | 14.7% |
The multipliers shown are rounded to two decimals, which is how a pricing sheet normally displays them. The prices are what the exact multipliers produce.
Reading the ladder
At direct cost is a loss. This is the row that surprises people. It is also the row that explains a terminal that feels busy and does not make money.
Break-even sits above direct cost, not at it. At $36.25 the job finally covers everything, including the fixed cost that never appeared in the per-ton build-up. That is $1.39 a ton above where most floors get set. On 60,000 tons that gap is the difference between losing $83,400 and losing nothing.
Everything above break-even is a decision, not a discovery. Standard markup and the chosen price are commercial judgement. The ladder’s job is to make sure that judgement starts from the right floor.
The one thing to take away. Break-even is a solved number, not a chosen one. It depends on your fixed cost and your volume, so it moves when either moves. If volume drops to 45,000 tons and fixed cost holds, the break-even price rises even though nothing about the work changed.
Why volume is part of the price
Fixed cost is recovered across whatever volume actually moves. That makes annual volume an input to the price rather than a separate forecast, which is why an annual volume assumption belongs on the model itself rather than buried in one line.
It also means a volume commitment is worth something concrete at the negotiating table, and you can say how much. Recovering $83,400 across 60,000 tons costs $1.39 a ton. Across 45,000 tons it costs $1.85. That 46 cent difference is a real number you can put in front of a customer asking for a lower rate on lower volume.
What this means for a quote you have to defend
Six months after a quote goes out, the question is rarely what the price was. It is why. Answering that needs three things the ladder assumes you have:
- The rate each line used, as it was that day. Not today’s rate. If a bound line silently follows the rate library forward, the March quote stops reproducing the March number and you cannot reconstruct what you sent.
- The fixed cost you assumed, written down. Fixed cost that lives in someone’s head is the reason two people at the same terminal quote the same job differently.
- The volume the price assumed. A price is only defensible alongside the volume it was built on.
That is the whole argument for treating pricing as a model rather than a spreadsheet: not that the arithmetic is hard, but that the assumptions have to survive being asked about.
Manifold's cost models hold your rates, your drivers and your fixed cost in one place, and compute this ladder including the solved break-even row. Every figure on this page is illustrative. The point is the shape of the arithmetic, which does not change with the numbers.