Costing Logistics Services

Abstract

Third Party Logistics (3PL) providers’ paradigm has grown into a critical and common strategic approach, due to the benefits of the outsourcing model. Over the past two decades, 3PL’s sector has played a critical role in the Greek economy. Logistics providers have extended their scope beyond traditional transportation and warehousing activities to also include many other main logistics services such as procurement, distribution, inventory management, packaging, and order processing services. In the services-oriented business sector (in general) the realization of the true costs of the provided services is a critical success factor. Specifically, a 3PL company by assessing the costs of services can confidently pursue the logistics objective of providing desired customer service at the least total cost. This paper presents and evaluates the costing systems that the 3PL’s companies have used. It is based on a survey that is focused on logistics providers in Northern Greece. This survey aimed at first to identify the adopted costing system, to assess its significance for both the provision of services and the designing - redesigning of services’ portfolio, to estimate the degree of satisfaction by top managers, and to recognize the problems regarding the existing costing system such as the non-value added logistics services.