Logistic Costs Breakdown

Logistic Costs Breakdown

Generally, logistics costs include
1) Transportation costs
2) Inventory carrying costs
3) Labour Costs
4) Customer service costs
5) Rent for storage costs
6) Administration costs
7) Other costs

Logistics costs are defined differently by different companies. Some companies do not account interest and depreciation on inventories as logistic costs. Others include the distribution costs of their suppliers or the purchasing costs. In some cases, even the purchase value of the procured goods is included in the logistic costs. So, there is no generic definition of this term but every company needs to define the logistics costs for itself and the KPI’s it will be tracking to lower the costs.

Generally, companies have to do a trade-off between cost and performance while managing logistics costs. This is because the lowest cost transportation may not be the fastest and hence higher costs need to be incurred to provide higher on time delivery and performance. Also, logistics costs is also a function of the type of goods that need to be transported. The mode of transportation for a perishable good will be different from an imperishable good.

Total logistic costs reveal much about the locational dynamics of logistics activities, particularly distribution centers, since they indicate the weight of most important factors. Transportation costs remain the dominant consideration as they account for about half of the logistic costs. Inventory carrying costs are also significant with a share of about one fifth of total costs. They include the costs of holding goods in inventory (capital costs, warehousing, depreciation, insurance, taxation, and obsolescence) and are commonly expressed as a share of the inventory value. Labor costs involve the physical handling of goods, including tasks such as packaging and labeling. Customer service encompasses receiving and processing orders from customers.

Under such circumstances, distributors are willing to pay higher rents to take advantage of a logistics site that offers co-location with an intermodal terminal since this strategy enables them to reduce transportation costs, such as drayage, as well as improve their time responsiveness (lead time). Therefore, while transportation costs remains the most important element of logistics costs and its friction, non-spatial components such as inventory carrying and labor costs, are significant components that will influence locational choice depending on the supply chain.

Source: Establish, Inc. / HWD & Grubb & Ellis Global Logistics.THE GEOGRAPHY OF TRANSPORT SYSTEMS

Total Logistics Costs Tradeoff

Total Logistics Costs Tradeoff

Total logistics costs consider the whole range of costs associated with logistics, which includes transport and warehousing costs, but also inventory carrying, administration and order processing costs. Administration and order processing costs are relative to the total volume being handled. However, for the same volume being handled transport and warehousing costs will vary according to the distribution strategies being adopted. The above graph portrays a simple relationship between total logistics costs and two important cost components; transport and warehousing. Based upon the growth in the shipment size (economies of scale) or the number of warehouses (lower distances) a balancing act takes place between transport costs and warehousing (inventory carrying) costs. There is a cutting point representing the lowest total logistics costs, implying an optimal shipment size or number of warehouses for a a specific freight distribution system. Finding such a balance is a common goal in logistical operations and will depend on numerous factors such as if the good is perishable, the required lead time and the market density.

Source: adapted from McKinnon, A. "The Effects of Transport Investment on Logistical Efficiency", Logistics Research Centre, Heriot-Watt University, Edinburgh, UK.THE GEOGRAPHY OF TRANSPORT SYSTEMSsh, Inc. / HWD & Grubb & Ellis Global Logistics.THE GEOGRAPHY OF TRANSPORT SYSTEMS

TOP10 Destinations, exporters and the type of Cambodia milled rice exported in 2015

Here in bellow you can find out the DATA of the TOP10 Cambodia RICE EXPORTERS, DESTINATION and the type of Cambodia Milled rice have been exported in 2015.

TOP10 Destinations of Cambodia Rice Export in 11 Months, 2014

Freight Management ( Cost-Effective Freight Management Outsourcing)

Using our proven freight transportation management approach and our knowledge of industry best practices, we can optimize the value of your freight expenditures in all areas. And, if you have a private truck fleet, we’ll work to make sure it’s delivering the greatest benefits to your company. Our proven Freight Management approach has produced  dollars in freight savings for our clients, and we can do the same for your company.

As a CAMAJOR client; we’ll start by conducting a comprehensive evaluation of your company’s freight activities, your service needs, your freight costs and the carriers you use. We’ll then compare these factors to industry freight benchmarking standards and best practices to find the segments of your freight transportation operations that can lead directly to cost savings and service improvements. You’ll get a strategic freight management plan designed to deliver positive results that will go straight to your company’s bottom line.

Full or Partial Freight Management

CAMAJOR offers a comprehensive approach to Freight Management adapted to your needs. We can take on the task of managing all or part of your freight shipping operations, either on-site or off-site, performing functional responsibilities for shipping, loss and damage prevention, claims, shipment expediting, and service quality management. We’ll also track and report shipping costs to you on a monthly basis in clear and concise formats.

• If you use for- hire carriers: We’ll incorporate freight cost benchmarking, carrier selection, and rate negotiation techniques to assure that you get the best rates available and the service quality you need.
• If you have your own fleet: We’ll conduct an evaluation of the costs and benefits of your existing or proposed private truck freight shipping operations so you’ll know that benefits your fleet provides. If you don’t have a private fleet, we can tell you if having one makes sense for your company.

Why does our Company need Freight Management Services?

CAMAJOR specializes in freight transportation management services. We have a professional, expert staff that can evaluate your operations and develop methods and procedures for helping your company reduce freight transortation costs while improving service quality.
Many companies don’t realize that each and every transportation decision can result in hundreds or thousands of dollars in company expense, rivaling the vast majority of capital expenditure-level amounts. Yet the degree of oversight of these decisions is relatively minimal. Your company might require multiple approvals before an employee can purchase a computer, but very little approval before a shipment decision having similar fiscal impact is made. That’s where we come in.

Main intermodal transport to North America

Cambodia Ports

Sihanoukville is the main deep-sea port of Cambodia. The Port of Sihanoukville, situated in the Bay of Kompong Som, is the principal and only deep-water maritime port of Cambodia. Kompong Som’s natural advantages include deep water inshore and a degree of natural protection from storms provided by a string of islands across the mouth of the bay. The port was built in 1959 with a total capacity of 1.2 million encompassing the old French-built wharf and adjacent new facilities. The capacity of Sihanoukville port, in its present condition, is estimated at about 950,000 tones per year, excluding POL which has separate facilities. This is about twice its present traffic. The port can accommodate ships of 10,000-15,000 tons deadweight (DWT).

The main access to the port is via a 3 km fairway channel, marked by buoys and leading lights for daylight navigation only. Due to rocky outcrops in the channel, the entrance to the port is restricted to vessels with a draft of less than 8.0-8.5 m. In practice boats of up to about 10,000 DWT can use the port. The port is located 540 nautical miles (1000km) from Singapore.

On the land side, the port is served by National Highway No. 4 (NH4, 240km to Phnom Penh), the main link between Phnom Penh and the coast, and the “New” railway line, completed in 1969, which takes a more southerly route via Kampot. The rail distance to Phnom Penh is 263km. The railway is in poor condition and handled only some 15% of the port traffic in 1993. Aid from the United States is earmarked for an immediate project to resurface the entire length of NH4 as well as to rebuild several bridges between Phnom Penh and Sihanoukville. Roads within Sihanoukville municipality itself are all hard surfaced, albeit of somewhat lesser quality and poorer condition than NH4.

As part of its program to upgrade transport infrastructure in Cambodia, the Asian Development Bank is funding some modest improvements at the port. Immediate investments include the following: new forklift truck for container movement; repair old jetty; replace fenders; replace navigating aids and allow for night navigation; improve container storage yard; and install area lighting to permit night working. There are also reports that French assistance may finance a quayside container crane. (Currently, in the absence of a dedicated crane, the port claims to be able to move 200 containers per 24 hours).

Several warehouses are available providing a total storage area of approximately 6,000 square meters. The two wharfs have a total of five warehouses, one of which is being let out to an oil exploration company. The warehouses have been under-utilized in recent years because of their poor condition, particularly their leaky roofs. Warehouses 1, 2 and 4 are now being repaired under the SRA Project. They have a combined capacity of about 36,000 cube meters. Warehouse 3 was repaired earlier with domestic funds. Container storage and handling is also available. The container yard is 50,000 square meters in area. Regular and direct shipping links with Singapore and Bangkok are in place, with Cambodian-flag shipping (Camtran Ship) being the dominant carrier. In 1993, 15,000 TEU’s (20 food equivalents) passed through Sihanoukville Port. An estimated 80 percent of the containers had origin/destination in Singapore. Behind the warehouses fronting the new wharf, there are railway platforms and tracks as well as a container parking area of some 17,600 square meters. The container area is now being resurfaced under SRAP. Both wharves are also rail-connected.

PHNOM PENH PORT

Phnom Penh depends on access via the Mekong through the delta area of Vietnam. The Phnom Penh port is the country’s traditional river port, accessible to vessels from the South China Sea through Vietnam. Phnom Penh port is located in the city (Tonle Sap river), some 3-4km from its junction with the Mekong. It is some 330 km from the mouth of the Mekong of which about 100 km is in Cambodia and the rest in Vietnam. The distance from Singapore is about 1450km. Vessels of up to 2,000 DWT can use the route without difficulty, and 5,000 DWT boats can pass the entrance to the Mekong (the ‘Main bottleneck) on favorable tides. Regular dredging is necessary at three points in Cambodia for the 5,000 DWT vessels to reach Phnom Penh. The port serves up to 150 ships per year, including 3 Singapore-based cargo vessels which take 10-12 days for the return voyage.

INFRASTRUCTURE

The main-cargo port consists of two sites, generally called Port No. 1 and Port No. 2:

Port No. 1 (the main port) consists of a 184-m long pier built in reinforced concrete, plus three pontoons for sea-going vessels. There are two berths, known as Berths 4 and 5, which can accommodate ships up to 2,000 DWT and 4,000 DWT, respectively. Some 540m of domestic pontoon capacity is available for river ships and barges of up to 100m or 1,800-2,000 tons. The pontoons are served by lighters and junks. There are other berths available for small craft. There are 12 depots of 2,700 sq m and 5,910 tons storage capacity within some 180 m of the berths, plus open storage of some 4,300 sq. m. There is another warehouse complex at Kilomet 6 (Phnom Penh) having 15 sheds with a total capacity of 70,000 tons and 8 sheds of nearly 4,000 tons. Although actual crane capacity is not dear, there are 12 cranes- i.e. two 25-ton, four 16-ton, and six 6.5-ton cranes.

Port No. 2, about 1km south of the main area, consists of two 45 m by 10 m steel pontoons. Due to the long and narrow bridges and the seasonal variation in water levels, these two berths can not be reached by equipment. The capacity of the main port (No. 1) has been estimated at about 150,000 tons per year, a figure already exceeded. This port is now to be rebuilt with the aid of a Japanese grant. The improvements are expected to increase the capacity to some 566,000 tons per year. As an interim measure, Port No. 2 will be rehabilitated under a World Bank credit. When the improvements to Port No. 1 are completed, Port No. 2 could perhaps revert to domestic use (up to 1991, Port No. 2 was for domestic use only).

KOH KONG PORT

Koh Kong is situated near the Thai border and is used by small boats, below 500 DWT.The Koh Kong provincial port is really a system of three ports. Vessels entering Cambodia from Singapore, Malaysia or Thailand call first at Paklong, on the Gulf of Siam about 15 km from the Thai border, for customs clearance and other formalities. Up to 300-ton capacity boats can be accepted, or 500 tons at anchorage. The 300-ton boats can then proceed across the bay to Koh Kong town for unloading or transshipment to smaller vessels if required.

Koh Kong is a small provincial capital with no road access to the rest of Cambodia. Road 43 can only be used (with difficulty) by motor cycles at present. Thus after clearance most boats proceed to another provincial port al Sre Ambel, at an inlet the Kompong Som Bay near Road 4, some 170 km from Phnom Penh. Sre Ambel can only accept 120 to 130-ton boats, however. Traffic that arrives at Koh Kong in larger boats has to be transshipped between vessels at Paklong or Koh Kong town.

Paklong and Koh Kong have quite good but limited facilities and are very congested, particularly Paklong. There is some warehousing in Koh Kong town to support the transshipment activity. Koh Kong is also a quite an important fishing port, from which about 16,000 tons were exported to Thailand in 1993.

OTHER PORTS

Cambodia’s other seaport is at Kampot, 148km from Phnom Penh along Road 3 or 166km by rail. The port is situated in the town on a river bank 4 km from the sea. Of the minor ports, Kampot is the most important coastal facility. It was more important before 1975 when it had better facilities and was able to take vessels of up to 150 tons or more. It is a lighter port, with two main approaches from the sea, one of which has fairway depths of 10 m to within 11 km of the port. The other southern channel could accommodate vessels of less than 4.6m draft. There are three channels through which junks and lighters could enter the river to reach Kampot. A wooden jetty can be used by 30-40 tonne boats. There is a regular trade with Koh Kong, for exchange of goods with Thailand, but Kampot port is not itself used for international traffic.

The other river ports, for example Kompong Cham on the Mekong, are in general also used for domestic traffic only. A small port exists at Kompong Ampil, in Takeo province, where there is a fair amount of trade with Vietnam via a small river that leads into the Bassac, but most boats are only of 25 to 30-ton capacity.