SCDigest editorial staff
Level of Cost Increase/Decrease
The level of cost increases/decreases by measure varied so wildly that it is hard to put the data to good use – we believe an average of the responses, for example, would really not provide much insight. We do offer some basic observations that might be useful.
The logistics cost measure probably best suited to comparisons is cost per unit or weight, as these are not directly effected at all by change in a company’s sale prices, and are much less subject to volume impacts of course than absolute logistics costs. There certainly can be some volume impact, as higher volumes can better leverage certain fixed costs or generate opportunities for greater efficiencies, while lower volumes may have an opposite effect.
Many studies have found, for example, that on average large companies have a lower cost of logistics by unit/weight and as a percent of sales within a specific industry segment than do smaller companies. And as always, there can be confounding factors. One respondent, for example, noted their cost per case measures where negatively impacted by packaging changes that reduced the average number of cases per pallet. That increased the cost per case when doing pallet moves, for example.
In looking at the companies that measured costs first by unit, weight or some similar measure, of the 83% of respondents who had costs go up in 2005, increases range from a low of .05% (retail industry company) to a high of 12% (food industry company). The average was a 4.6% increase in cost per unit/weight among this group.
Conversely, those able to decrease logistics costs per unit/weight had relatively small gains. The highest percent decrease was 5% (retail) and the average was 1.7%.
Other sections of the Logistics Cost Study:
Beginning of Story
What's Included in Logistics Costs Measures?
Logistics Costs Up or Down in 2005?
Performance by Industry - General
Apparel Industry Logistics Costs
Automotive Industry Logistics Costs
Chemicals Industry Logistics Costs
Consumer Durables Industry Logistics Costs
Consumer Packaged Goods Industry Logistics Costs
Consumer Goods Other Industry Logistics Costs
Food/Beverage Industry Logistics Costs
Furniture/Home Furnishings Industry Logistics Costs
High Tech Industry Logistics Costs
Paper/Building Products Industry Logistics Costs
Pharmaceutical/Medical Products Industry Logistics Costs
Retail Industry Logistics Costs
Wholesale Distribution Industry Logistics Costs
3PL Industry Logistics Costs
Other Industry Logistics Costs
Level of Cost Increase/Decrease
Summary
Do you have additional comments on the our logistics costs study? Let us know your thoughts.
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