Logistics Costs vs. Company Size

Production and logistics inefficiencies arising from their small size means that small scale producers have profit margins that are 19% lower than those of large companies.

Friday, September 21, 2012

An article in Elfinancierocr.com, comments on the ECLAC study "Panorama of the integration of Latin America and the Caribbean 2011-2012",which states that "logistics is a key dimension that influences the competitiveness of enterprises and their inclusion in value chains. "

Therefore, "In Costa Rica, the cost of transportation to market, for example, a kilo of tomatoes, for a small exporter represents almost a quarter of the total cost (23%), followed by customs costs (11%) and taxes (6%), while for the large exporter the largest part corresponds to the customs duties (10%), followed by transport (6%) and taxes (5%). "

"According to an ECLAC report, in relative terms in small producers pay the most for logistics. In this way, because of logistical and operational inefficiencies, small producers have a profit margin (competitiveness) which is 19% lower than major exporters in the region. "



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