Outbound Freight Cost Structure and Profitability Analysis
Kivioja, Ville (2022)
Kivioja, Ville
2022
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-202204125046
https://urn.fi/URN:NBN:fi:amk-202204125046
Tiivistelmä
Freight costs are a mandatory expense in the company's operations. Careless or poorly planned decisions regarding a company’s logistics solutions can result in significant operating losses. To keep the business profitable, it is especially important to ensure that the gross margin on service products is high enough to cover the freight costs incurred for the order delivery.
This thesis is implemented for a global technology company located in Finland. It aims to study the freight cost structure of the case company from the perspectives of the recipient country and service products and to make the research results available to support future decision-making. The goal of this thesis is to provide suggestions for improving the current freight process, to increase the awareness of the case company's personnel about the impact of freight costs on profitability, to support the customer in ways to reduce freight costs and to offer the case company suggestions for lower-cost practices.
Researching this subject is necessary because the case company does not have previous research data on freight cost distribution specifically from the perspective of the recipient country or service product. The proposals offered in this thesis can be used by the case company directly in future to support logistical decisions. This thesis consists of two main parts: the first introduces a theoretical framework related to the topic, followed by the second part, which conducts a case study based on empirical research. During the research, the share of the case company's freight cost in sales profit is calculated, the deviating variables in the research source data are analysed and the most important factors are visualized to facilitate the interpretation of the figures.
This thesis is implemented for a global technology company located in Finland. It aims to study the freight cost structure of the case company from the perspectives of the recipient country and service products and to make the research results available to support future decision-making. The goal of this thesis is to provide suggestions for improving the current freight process, to increase the awareness of the case company's personnel about the impact of freight costs on profitability, to support the customer in ways to reduce freight costs and to offer the case company suggestions for lower-cost practices.
Researching this subject is necessary because the case company does not have previous research data on freight cost distribution specifically from the perspective of the recipient country or service product. The proposals offered in this thesis can be used by the case company directly in future to support logistical decisions. This thesis consists of two main parts: the first introduces a theoretical framework related to the topic, followed by the second part, which conducts a case study based on empirical research. During the research, the share of the case company's freight cost in sales profit is calculated, the deviating variables in the research source data are analysed and the most important factors are visualized to facilitate the interpretation of the figures.