eThesis - School of Business electronic theses

PRICING OF LOGISTICS SERVICES – Case HUB logistics Oy

Research objectives

The purpose of theoretical part of the study was to examine pricing from logistics point of view, related to principles of pricing and to pricing process. In addition, the objective was to examine possible factors affecting the price in logistics outsourcing relationship such as costs, risks, performance measurement, and service level agreements. The objective of empirical part of the study was to develop pricing as well as a pricing tool for case company’s new service concept, procurement logistics. Specific to this service concept is the inventory financing provided for customers in addition to traditional logistics services.

Research data

The theoretical part of the study was conducted reviewing literature especially related to pricing of services, as well as cost accounting, risk management and performance measurement in the context of logistics services. The empirical part consists of a case study based on a pricing development project in the case company and company’s internal pricing and cost accounting material.

Research methodology

The study follows the logic of a constructive research. Case study began by defining objectives for the pricing as well as the current state, and was continued by determining factors affecting the price of these services and by building a framework for the pricing tool. Case study includes analysis on the profitability and susceptibility to risks as well as how to develop the revenue logic of procurement logistics and profitable outsourcing relationship by using pricing as a tool.

Main findings

Factors affecting the price of procurement logistics were identified and a pricing tool was built for the case company. The outcome of the development project, a pricing tool can be used in the contract negotiations and it helps the case company to determine absorption costs of providing these services; costs from logistics activities, inventory activities and from the capital provided.

Keywords

Pricing, logistics services, inventory financing, cost management in logistics services