Analysis of logistics costs drivers in Estonia

Abstract

Completed surveys during the years 2007 and 2012-2013 have shown that overall logistics costs in Estonia were rather high among manufacturing and trading companies, and they have grown somewhat. In this research work, it is tried to sketch and analyse, what are the reasons for cost increase and the high level of it. Logistics sector is extremely important for this peripheral North-East European country as it accounts 16% of GDP and is vital balancing trade and alas current account deficits. Based on completed statistical analysis, it seems that the company size does not matter that much. Actually reasons for logistics costs are elsewhere, being possibly related to external environment (like natural disasters and political instability). Therefore, it is being proposed that both internal and external factors should be incorporated in logistics cost surveys in the future to understand the causes and drivers of costs better. Significance of external environment has only increased in Europe within recent years due to financial, political and environmental crises taken place.