Source: Adapted from P.O. Roberts (2003), Supply Chain
Management: New Directions for Developing Economies, World Bank.
Worldwide Logistics Costs, 2002
Worldwide logistics expenditures represent about 10-15% of the total
world GDP, but vary significantly
according to the level of economic development and the
orientation of the economy (manufacturing, raw materials,
services, etc.). For instance, an economy that rely
on the extraction of natural resources will have high logistics
costs than an economy focusing on advanced services. The most significant logistics cost concerns transportation
(39%), followed by warehousing (27%) and then inventory carrying (24%);
they jointly account for 90% of all logistics costs.
Warehousing costs are the fixed costs of owning or leasing
warehousing space. They vary according to the number and the
size of facilities and are irrespective of the amount of
inventory being handled. Inventory carrying
costs are the variable costs of maintaining inventory in a warehouse.
They include utilities, insurance, taxes, labor costs and the opportunity
cost of having capital fixed in a non-performing manner. It varies
according to the volume handled.