Measuring National Level Logistics Costs - International Transport ...

ITF Summit 2012, Leipzig, May 2, 2012 

Side Event: Logistics Performance Measurement 

Measuring National Level Logistics Costs 

Overview of Worldwide Empirical Evidence 

Presented by Prof. Lauri Ojala 

Turku School of Economics at the University of Turku, Finland 

Lauri.ojala@utu.fi

A comprehensive overview 

By Rantasila & Ojala 

Discussion Paper 2012 - 04 

Published at the 

ITF Summit 2012 

Leipzig, Germany 

Available also at: 

www.internationaltransportforum.org 

ITF Summit, Leipzig, May 2, 2012, Rantasila & Ojala 2

Logistics costs: no statistical nor accounting units 

• Definitions vary from case to case 

– Large differences in awarness levels across countries 

• Firm and macro level data not compatible 

– Linkage to National Accounts data only implicit; 

• Some industry or transport statistics also rely on questionnaires 

– Self-reported data may be subjective or biased 

In short: severe knowledge gaps exist 

on the concept of logistics costs 


The boundary of the firm affects the 

object and unit of analysis; but it is fuzzy 

The line between firm, supply chain or network? 

Upstream SC Focal firm Downstream SC 

Firm Strategic Business Unit Conglomerate 

”Arm’s length” transaction Long-term partnership 

Outsourcing In-house-operations 

Intra-firm trading Intra-industry trading 

Domestic operations International operations 


Main types of logistics study/survey 

• Statistics-based studies applying models 

– Econometric 

– Other modelling approaches 

• Surveys using questionnaires 

– Comprehensive themes 

– Single-theme surveys 

• Case study-based approaches 


ASLOG France 

Brazil: ILOS 

Existing studies e.g. by the following… 

Transport Canada 

University of Lund, Sweden 

Technical University of Berlin 

Fraunhofer Institute, Germany 

Delcan Corp. for CSCMP , USA 

Thammasat University Thailand 

St. Gallen University Switzerland 

Type of study 

Statistics-based Survey-based 

Turku School of Economics, Finland 

Japan Institute of Logistics Systems 

South Africa: CSIR & Stellenbosch U. 

Ministry of Transport, New Zealand 

Latin America: Georgia Tech & LALC 

Institute of Transport Economics Norway 

US State of Logistics 

South Africa 

Brazil 

Europe Top 100 

Norway 

Logistics providers Logistics users 

Source of data 

Finland 

Germany (BVL) 

Switzerland 

Thailand, Japan 

France 

Colombia 

Sweden 


25 

20 

15 

10 

5 

0 

A wide spread of methods, units and definitions on 

logistics cost; few longitudinal studies exist 

Logistics costs as % of: (i) GDP *; (ii) Sales **; (iii) Total costs *** 

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

Finland ** ELA/ AT. Kearney** U.S. State of Logistics* Sweden* 

State of logistics 

South Africa* 

BVL Germany; 

Manufacturing*** 

Tajikistan 2005* 

Moldova 2005* 

Ukraine 2007* 

China; Choi & Lee (2009) * 

Brazil = ILOS (2010) * 

Russia 2011* 


Levels of Logistics Costs in Statistics-based 

Studies; Percentage of GDP (* % of sales) 

Source: Rantasila & Ojala (2012) ITF Discussion Paper 2012-04 


Levels of Logistics Costs in surveys; 

Percentage of GDP (* % of sales) 

Source: Rantasila & Ojala (2012) ITF Discussion Paper 2012-04 


LPI 2007 indicated a strong correlation of 

national logistics performance and costs 

Source: Arvis et al. (2007) Connecting to Compete; Logistics Performance Index, World Bank 


Knowledge gaps on national level 

logistics performance indicators & costs 

• Lack of comparable methods & terminology 

• Very few cross-country studies made even in HICs 

• Little comparative data across countries & industries 

Fact-based, comparative policy recommendations 

difficult to make without adequate indicators 


Logistics Performance International Observatory 

LPIO initiative by The World Bank to improve 

Logistics Cost & Performance analysis 

• Collecting the existing knowledge LPIO 

– Starting mainly from High Income countries 

– Three workshops held in the US, Europe and Asia 

• Analytic tools esp. for Middle & Low Income countries 

• Questionnaire-based surveys 

• Statistics-based studies 

• Modelling approaches 

• Other approaches, e.g. Logistics Performance Index (LPI) surveys 

Aim to measure logistics costs & KPI’s in a more uniform way 

” F K o C ” 


In conclusion, there is strong… 

• …interest for exchange of knowledge among 

researchers in the field; 

• …need for improved market information; and 

• …demand for better analysis to support policymaking 

especially in LICs and MICs. 

A need to create a joint knowledge platform to 

study national level logistics performance 


Thank you for your attention! 


Selected references: 

• ELA and AT Kearney (2004) Differentiation for Performance Excellence in Logistics, http://www.elalog.org/ 

• ELA and AT Kearney (2007) Innovation Excellence in Logistics 2007, http://www.elalog.org/ 

• Finland State of Logistics 2006; Naula, Ojala and Solakivi (2006) MoTC publications 45/2006 www.mintc.fi 

• Finland State of Logistics 2009; Solakivi, Ojala et al. (2009) MoTC publications 21/2009 www.mintc.fi 

• Finnish Logistics Survey 1992. Ministry of Transport and Communications publications 6/1993 

• Finnish Logistics Survey 1996-7. Ministry of Transport and Communications publications 33/1997 

• Finnish Logistics Survey 2001. Ministry of Transport and Communications publications 52/2001 

• Ittmann, HW, King, DJ, Maspero, EL et al. (2008) Fourth annual state of logistics survey for South Africa 2007: 

logistics for regional growth and development 

• Langley, J. and Dort, E. and Ang, A. and Sykes, S.(2007) “2007 Third-Party Logistics, Results and Findings of the 

12th Annual Study”, http://www.us.capgemini.com/industries/ind_tl.asp?IndID=19. 

• Ojala, Solakivi, Hälinen, Lorentz and Hoffmann (2007) State of Logistics in the Baltic Sea Region, LogOn Baltic 

3:2007 www.logonbaltic.info 

• Rodrigues, A.M, Bowersox, D.J, Calantone, R.J, (2005) Estimation of Global and National Logistics Expenditures: 

2002 Data Update. Journal of Business Logistics, Vol.26, No. 2, 1-16 

• Supply Chain & Logistics Association Canada (2008) State of Logistics, The Canadian Report 2008 

• Transport Intelligence (2008) Logistics & transport Industry Environmental Survey 

• Töyli, Häkkinen, Ojala, Naula (2008) Logistics and financial performance - An analysis of Finnish small and 

medium-sized enterprises, Int. J. of Physical Distribution and Logistics Management, 38, 1, 57-80 

• Guasch J.L – Kogan J (2006) Inventories and Logistic Costs in Developing Countries: Levels and Determinants—A 

Red Flag for Competitiveness and Growth. Policy Research Working Paper 2552. Washington DC: World Bank 

• Guerrero P - Lucenti K – Galarza S (2010) Trade Logistics and Regional Integration in Latin America and the 

Caribbean, ADBI Working Paper Series No. 233 

• Barbero J A (2010) Freight Logistics in Latin America and the Caribbean: An Agenda to Improve Performance, 

Inter‐American Development Bank Infrastructure and Environment Department, TECHNICAL NOTES No. 

IDB‐TN‐103 


Statistics-based logistics studies do exist: 

• Annual State of Logistics Report U.S 1989 

• Bowersox, Rodrigues, Calantone & Closs, Stank 1999, -02,-05 

• South Africa State of Logistics Survey 2003 

• Logistics costs in Brazil 2005 

• Top 100 in (European) Logistics 2007 

• Norwegian logistics costs 2008 

• Svensk Makrologistik (Sweden) 2008 

• Radelet and Sachs 1998 

• Lee & Hausmann (World Bank background note) 2005 


…as do surveys using questionnaires, such as: 

• ELA & A.T. Kearney 1987 

• Finland State of Logistics 1991 

• German Logistics Association BVL 1995 

• State of Logistics: The Canadian Report 200X 

• Norwegian Logistics barometer 2003 

• ASLOG L'Etat de l'art de la logistique française 2005/2006 

• McKinsey Global Supply Chains 2006 & 2008 

• LogOn Baltic Logistics Survey 2007 

• World Bank Logistics Performance Index 2007 

• Colombian logistics survey 2008 

• Swiss Logistics market, St. Gallen University 2009 


World Bank case studies on national 

logistics costs in Low-Income countries 

• Arvis: Sub-Saharan and North Africa 2003 

• Ojala: Moldova, Albania, Ukraine, Central Asia 2003 

• Naula: Central Asia 2007

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