Logistics outsourcing, its motives and the level of logistics costs in manufacturing and trading companies operating in Finland

Abstract

This article explores the various aspects of logistics outsourcing in companies operating in Finland. The aim is to identify the connection between outsourcing, its motives and logistics costs. The data comprise a survey sample of 299 manufacturing and trading firms. Descriptive statistical analyses, analysis of variance and factor analysis were applied. Transport activities are outsourced to a large extent. The majority of companies manage most other logistics operations in-house. The outsourcing of product customisation, inventory management and warehousing is expected to become more common in the future. Cost savings together with flexibility and customer service were found to be the major motives for outsourcing. A connection between logistics costs and logistics outsourcing was identified: companies with higher levels of outsourcing are experiencing lower levels of logistics costs compared to those with lower levels of outsourcing or none at all.

Keywords:

• logistics outsourcing
• outsourcing motives
• logistics costs
• Finland

Acknowledgements

The Foundation for Economic Education (Finland) has supported this research undertaking, which is gratefully acknowledged.