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9 April 2023
Registratienr:
Measuring Logistics PerformanceMeasuring Logistics Performance
René Meeuws
Jakarta, May 6 2009
Registratienr:
Logistics costsLogistics costs
Why do we want to know it?
Comparison with other countries? Benchmarking?Monitoring logistics performance and logistics costs in timeImpact assessment policy measures to reduce logistics costs
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Logistics Costs and GDPLogistics Costs and GDP
9%
11%
11%
13%
18%
21%
USA
Japan
EU
India
Thailand
China
Source: The Economist, June 17th 2006 & NESDB
Logistics Cost to GDP in Comparison
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Logistics Costs as % GDP Logistics Costs as % GDP US 1999US 1999
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Logistics Cost as % GDP USLogistics Cost as % GDP US
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Logistics Costs US 2002Logistics Costs US 2002Carrying Costs - $1.444 Trillion all business inventory Billions of Dollars
Interest 23
Taxes, Obsolescence, Depreciation, Insurance 197
Warehousing 78
Transportation Costs
Motor Carriers:
Truck - Intercity 300
Truck - Local 162
Other Carriers:
Railroads 37
Water 27
Oil Pipelines 9
Air 27
Forwarders 9
Shipper Related Costs 6
Logistics Administration 35
Total Logistics Cost 910
CASS Annual State of Logistic Reports (14th edition)
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Logistics Costs % GDP KoreaLogistics Costs % GDP Korea
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Logistics costs as % GDPLogistics costs as % GDPWhat does it say?What does it say?
Not very much…Transit countries where international distribution takes place may have high percentageTrend of smaller shipments and higher frequencies leads to more ton-kmIt calculates volumes to cost; time aspect not taken into accountCareful with comparisons with other countries as data may be collected in a different way
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Logistics Costs as % GDPLogistics Costs as % GDP
Can it be an indicator for logistics performance?Probably not…Would be interesting to compare Logistics Costs as % GDP with LPI – is there a correlation?
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Logistics Costs - LPILogistics Costs - LPI
There is a modest correlation between Logistics Costs as % of GDP and the score of the Logistics Performance Index…
LC % GDP LPIChina 21% 3.32Thailand 18% 3.31India 13% 3.07Japan 11% 4.02USA 9% 3.84Indonesia 3.01R=-0.61233, R²=0.374952
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How to calculate Logistics Costs?How to calculate Logistics Costs?
You need a freight model to calculate ton-km, in particular in road transportYou need to calculate costs of road transport (fuel, drivers, insurance, maintenance, depreciation, overhead costs, etc.); how to rate to cost of fuel?You need to calculate inventory and storage costsYou need to differentiate regionallyYou need to carry out surveysetc.
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Example ArgentineExample Argentine
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Indonesian StrategyIndonesian Strategy
L&R - Laws & Regulations
KCF -Key
CommodityFocus
WWI – What & Where Infrastructure
LSP -LogisticsService
Providers
ICT -Information,
Communication& Technology
HRM -Human
Resources &Management
Registratienr:
Logistics Performance IndicatorsLogistics Performance Indicators
Some indicators can already be considered: o Foreign Direct Investment; increase/decrease in absolute terms; net inflow as % of
GDP. o Trade; import/export/transshipment; increase/decrease in value and volume. o Doing Business: Days to import. o Doing Business: Starting business: Duration in days. o Port clearance: berthing-release; berthing-exit in days. o Rate of physical inspection containers at ports (%). o Dwell time containers in ports: import; export. o Cost of trucking per km; <50 km; >50 km.
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Logistics Performance IndicatorsLogistics Performance Indicators
Relative weight (%) FDI 10 Trade in value/volume 10 Days to import 10 Starting business 10 Port clearance berthing-release; berthing-exit 20 Rate physical inspection 10 Dwell time containers in ports 10 Cost trucking 20 Total 100