Customers' expectations are becoming increasingly high, which raises the bar considerably for business owners. Consumers want to receive their orders promptly and at the best price. For this reason, the logistics sector is under intense pressure, prompting it to transform. As you know, carrying out all the tasks involved in transporting goods involves costs. What should we know about them in order to better manage our business? 
Logistics costs in transport - definition
To begin with, in order to better understand the issue of logistics costs in a company, it is worth reading the definition constructed by Czesław Skowronek - a well-known Polish economist and politician, according to which logistics costs are:
the consumption, expressed in money, of living labour, means and objects of labour, financial expenses and other negative effects of extraordinary events that are caused by the movement of material goods within and between enterprises, as well as the maintenance of inventories.
We can therefore conclude that this is a specific group of costs related to the planning, organisation, as well as the execution and control of logistics processes.
Logistics costs in a company - a basic breakdown
The importance of logistics in running a business (irrespective of the industry) is enormous - a thorough analysis of the costs involved will reduce expenses and increase sales. Only in this way can a company be truly successful and sustain itself in a market that is constantly changing. Online shops should consider working with logistics companies. By delegating parcel distribution issues, you can streamline your business and ensure that you are providing the highest level of service. InPost meets the needs of businesses with a fulfilment service. Variable costs are one of the advantages of cooperation. Find out more about InPost Fulfillment and fill out a short application form."
In order to isolate logistics costs from a company's global expenditure, it is necessary to know their breakdown made, for example, by:
-
Cross-section of generic costs - these include:
- material costs, such as depreciation, material or energy consumption, external services;
- Intangible costs - these include tax expenses and those associated with various fees, any intangible services, the cost of engaging external capital and labour costs;
- other expenditure;
-
Flow phases more closely located - we distinguish:
- costs of the procurement phase ( magazine supply and transport department);
- costs of the production phase (internal transport, department responsible for production control);
- the costs of the distribution phase (warehouse, sales and transport);
-
Basic logistics complexes (segments) - these are divided into:
- physical flow costs (internal and external transport, handling expenses);
- information process costs (for example: software, hardware depreciation);
- inventory costs (expenses related to the creation, maintenance and depletion of stocks).
A company's total logistics costs are the sum of: order handling costs, warehouse management costs, transport costs, inventory management costs, shipping costs, service level costs and lots.
Logistics costs in a company - how to analyse them?
Every company is different - for this reason, carrying out an analysis will vary from case to case, which also includes cost-cutting measures. In order to get a good idea of a company's logistics costs, they should first be broken down according to the company's profile. For a manufacturing and trading company, this might look like this:
-
Recognition of general infrastructure costs - these are the ones that significantly affect the smooth running of the business. This group includes expenses related to:
- rent;
- electricity;
- waste disposal;
- vehicle hire;
- water and waste water;
- fixed and mobile telephony;
- purchase of necessary office supplies;
-
Indication of transport costs, as a manufacturing and trading company relies heavily on the delivery of products to customers. We distinguish between costs:
- fuels;
- technical review;
- liability insurance;
- depreciation;
- car repair and maintenance;
- technical reviews;
-
Determine the cost of warehouse management - proper warehouse management will significantly reduce expenses. It is necessary to take into account:
- stock status;
- rotation of said stocks.
Logistics costs in the company - variable and fixed costs
If we want to compare the company's performance with the costs that logistics generates, we need to know that we are dealing with both fixed expenses (means of transport, taxes, fees, depreciation of warehouses) and variable expenses (labour costs, material and fuel consumption, capital commitment). Of course, not all logistics cost groups will be visible at first glance. For this reason, it is worth remembering, for example, the expenses relating to inventories, which, not without reason, are currently receiving a great deal of attention. They protect the company against unexpected, additional costs resulting, for example, from a lack of necessary materials, but they themselves also become a source of costs - we freeze certain capital in them.
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