Logistics costs in Norway: comparing industry survey results against calculations based on a freight transport model

Abstract

This paper presents estimates of logistics costs in Norway. Two different methodological approaches are taken: (i) use of the national freight transport model for Norway, in which logistics costs as a share of gross domestic product (GDP) are obtained from national freight flows between municipalities in Norway and from foreign trading partners and (ii) use of a survey of industry representatives, where the results are aggregated to the macro level and yield logistics costs as a share of GDP. The transport model includes detailed cost functions for transport and other logistics cost components along with a module for optimal shipment size, frequency and mode choice. Although the two approaches are quite different, we find almost identical estimates of transport costs. For the other logistics cost components (warehousing, capital costs, insurance, wastage, packaging and administration), the survey-based approach yielded slightly higher estimates, indicating that the freight transport model does not cover all logistics cost components.