Applying Activity-based Costing at Logistics Service Providers
Logistics service providers run business under a considerable pressure. They have to provide high quality logistics services at lowest possible prices and at the same time have to ensure a sustainable, profitable operation. This kind of business management requires reliable and true information about service costs. Distortions of costing information shall be minimised and the drivers of costs shall be accurately explored. Activity-based costing with methodological and industry specific adaptations may be used to improve the accuracy of logistics service providers’ costing procedures. Additionally, it can deliver information on cost efficiency as well. Thus this paper aims to analyse the applicability of activity-based costing for the case of logistics service providers. A specialised cost calculation model is elaborated and tested under real-world circumstances. The functionality of the model is illustrated by pilot calculations. This shows that significant differences might exist between the results of activity-based costing and the outcomes of traditional costing. The significance of differences is in line with the complexity and heterogeneity of logistics services.