Methodology: Definition and Selection of Variable to Measure Logistic Cost

Abstract

For the purposes of this report, the term “Logistics Costs” refers to all the costs involved in moving the product from the origin of production to the destination (point of exit from a country or local markets). And those costs are linked/associated with a number of things such as the infrastructure (extent and quality), transport, services, time/duration, the value of product, permits, certifications, and procedures required to physically move a product from place of origin to destination-border crossing, port or airport-FOB, with all the proper and needed certifications to access the destination market. Those costs include transport costs, license, permits and procedures, custom process, port-/airport-related costs, inventories, spoilage or losses in transit, thefts, insurance, port and airport or cross-border processes, warehousing, financial costs, and time-related and administrative costs. An average structure, by the most common blocks of themes, of the weight of those elements is presented below. Clearly, that distribution is product specific and there are slight variations according to the typology of products (see Guasch, 2004, 2018).