Cost drivers in transport and logistics
Improving costing methods is a current issue and at the same time a real challenge in transport and logistics business. Due to financial problems more and more companies in these sectors decide to adopt developed costing techniques like activity-based costing (ABC). This calculation methodology, however, needs to identify applicable performance measures as cost drivers. Cost drivers are key factors in ABC as they are the basis of cost allocations. This paper aims to establish a sound theoretical framework of cost driver analysis in the field of transport and logistics. After defining the scope of cost drivers in general the relevance of such measures in transport/logistics costing is examined. Methods for driver selection are described and validated by empirical results. The main conclusion of the study is that cost driver analysis plays an important role in transport and logistics management and shall be supported by using mathematical methods as far as possible. Correlation/regression counting and analytic hierarchy process (AHP) have been identified as possible methods for making cost driver selections more reliable.