Selection Criteria of Transportation Mode: A Case Study in Four Finnish Industry Sectors

Abstract

This paper takes a closer look at the very basics of logistics and it analyses the selection criteria of transportation services from the industrial point of view as the main research problem. It also tries to establish a better understanding of which industrial sectors are using which mode of logistics services and why. According to the analysis, the high value and especially high price/kg ratio of products, short life cycles and worldwide markets are typical reasons to use rapid modes of transport. The high price/kg ratio of products and the short life cycles, for example in the electronics industry, cause high price erosion and support selecting transport based on speed, as proportional transport costs remain small, even when using expensive transportation modes. Based on the results, some of the future logistics needs were identified, and the aim is to help logistics service providers offer the exact services needed, providing better competitiveness for Finnish shipping companies operating in global markets. Logistics service providers are, for example, expected to have more powerful supply chain management capabilities than a single‐service provider can typically offer. Additionally, logistics service providers should have compatible operating systems with different parties of various supply chains to enable deliveries to different customer groups according to their industry’s required speed.