Internal ratio analysis of cross-border logistics costs is a key management tool that helps companies gain an in-depth understanding of the composition of logistics costs so that they can effectively manage and control these costs. The following will explain in detail how to conduct this analysis in order to better understand the internal ratio.
1. Cross-border logistics costs usually include the following main aspects:
Returns and after-sales service: The costs in this area include processing returns, after-sales support, customer service and after-sales logistics costs.
Labor and operating expenses: Includes employee wages, training, management and coordination costs related to logistics.
Technology and system expenses: Includes supply chain management systems, tracking and visualization tools, automation systems and technical support costs.
Currency risk management expenses: Financial instruments and fees required to manage exchange rate risks.
2. Companies need the following steps to conduct internal ratio analysis:
Cost allocation: Allocate these costs to related logistics activities to determine the cost of each activity. For example, allocate transportation costs to different types of goods, modes of transportation or destinations.
Internal ratio calculation: Calculate the internal ratio of each logistics activity, that is, its proportion in the total logistics cost. It is usually expressed as a percentage.
Cost comparison: Compare the internal proportions of different logistics activities to understand which aspects dominate and which aspects require more cost control.
Develop improvement strategies: Develop logistics cost control strategies based on the results of the ratio analysis. For example, if the transportation cost ratio is high, you can seek more economical and efficient transportation methods; if the warehousing cost ratio is high, you can optimize inventory management.
Monitoring and optimization: Continuously monitor and optimize internal ratios to ensure the effective implementation of cost control strategies and make adjustments as market and business needs change.
Internal ratio analysis can help companies understand the composition of logistics costs more clearly, identify potential costs, and save opportunities. This analysis is an ongoing process that requires continuous monitoring and improvement to ensure that logistics costs are within a reasonable range and provide high-quality logistics services.