Multiple-method analysis of logistics costs

Janne Engblom, Tomi Solakivi, Juuso Töyli*, Lauri Ojala

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

35 Citations (Scopus)

Abstract

Logistics costs comprise a significant and relevant proportion of business costs, often exceeding 10 per cent of company turnover. This article examines the differences and interdependencies in the self-reported logistics costs of manufacturing and trading companies operating in Finland. Total logistics costs are taken to consist of six individual components: transport, warehousing, inventory carrying, logistics administration, transport packaging, and indirect costs of logistics. The analysed panel data covers 241 companies identified from two surveys for the years 2005 and 2008. Logistics costs were explored through multiple methods including descriptive analysis, generalised linear mixed models (GLMM), and principal component analysis. The distributions of logistics costs measured as percentages of turnover were skewed and best described by the beta distribution. Time, the number of employees, turnover, industry, and level of internationalisation were shown to be statistically significant explanatory variables of logistics costs. Logistics costs tended to be lower in larger companies, although diseconomies of scale eventually prevail. The analysis also covers changes in costs between 2005 and 2008. In general, the results indicate the need for caution in interpreting changes in logistics costs, and for simultaneously controlling the effects of background variables. (C) 2012 Elsevier B.V. All rights reserved.

Original languageEnglish
Pages (from-to)29-35
Number of pages7
JournalInternational Journal of Production Economics
Volume137
Issue number1
DOIs
Publication statusPublished - May 2012
MoE publication typeA1 Journal article-refereed

Keywords

  • Logistics costs
  • Panel study
  • Mixed model
  • Random effect
  • SUPPLY CHAIN
  • PERFORMANCE
  • INVENTORY
  • TRANSPORTATION
  • SERVICE

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