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Network design and optimization problems for product flow appear widely in shipping and production applications. We present a new variation to such class of problems in which the shipping cost linked with a route depends not only on the product flow moving across that route but on the product flow on other routes in the supply chain network as well. Selecting a route with fewer hurdles increases the product flow effectiveness. We consider the entire supply chain network i.e., from raw material supply to production, finished products to warehouses and then to the demand points. We formulate an integer mathematical model and present computational results for a set of test problems arising from shipping and production applications to analyze how the model performs with the varying network characteristics.