Impact of Logistics Outsourcing Services on Company Transport Cost in Selected Manufacturing Companies in South Western Nigeria (Published)
Transport costs arise from carrying inventory in-transit, from numerous operations connected with frequent and small deliveries resulted from just in time deliveries. Low costs, short time of transport and accepted level of risk are crucial for logistics managers. Focus on customer needs’ satisfaction, order fulfillment, short transit time, on-time delivery; gives transport costs a new dimension. The research was carried out within manufacturing companies in south western Nigeria. The population of the study consists of top management staff, this includes logistics, procurement and marketing managers. The sample of this study consisted 10 Manufacturing companies from the list of fifty (50) quoted companies on the Nigerian Stock Exchange modified by Manufacturing Association of Nigeria in 2005. The data collected was analyzed using of regression analysis. The analysis shows that logistics outsourcing helps manufacturing companies to reduce transport cost. Transport is needed throughout the whole supply chain being the link between supply chain members. Consequently quality of transport service affects the competitiveness of the entire supply chain. The findings revealed efficient transport cost among outbound logistics activities indicating their significant effect on reducing transport cost. The paper recommended that outsourcing be encouraged. This is in order to promote economies of scale which reduces cost, enhances fleet management, as well as customers’ satisfaction.