Logistics Costs

Logistics costs influence the whole value chain because they occur many times in production function. Following the drastic reduction of foreign trade tariffs in the 1990s, logistics costs became fundamental to countries’ competitiveness. Measurements show that in Latin America and the Caribbean logistics costs as a percentage of GDP are between 50 and 100% greater than in countries of the OECD. Logistics cost analyses by company reveal similar results.

The importance of logistics costs as a factor in competitiveness contributed to the definition of methodologies to quantify them. Though there is no consensus on their precise definition, two basic approaches exist:

  • The macro approach, based on data from national accounts or from input-output model studies, which estimates logistics costs as a percentage of GDP. 
  • The micro approach, which surveys firms in order to estimate performance indicators and collect logistic costs data. 

The Freight Transport and Logistics Regional Observatory is developing a methodology that combines the micro and macro approaches.