The status and development of logistics cost management: evidence from Mainland China

Purpose – The purpose of this paper is to examine current practices of logistics cost management (LCM) in Mainland China and identify factors impacting on the effectiveness of LCM. Design/methodology/approach – The questionnaire‐based survey is conducted in Mainland China. To analyze the status quo of LCM in Mainland China, the paper takes two nonparametric tests, Mann‐Whitney U ‐test and Kruskal‐Wallis one‐way analysis of variance to compare the difference between firms with and without attaching importance to LCM. Findings – The difficulties of LCM in China is as follows: first, there is a lack of effective cost measurement tools and analyses as well as reporting systems, especially in terms of distributors. Second, it is very critical to organize intra‐organizational cross‐functional teams and inter‐organizational collaboration based on business processes to promote information integrating instead of blindly investing on information technology application. Third, professional logistics managers are in short supply, even among logistics service providers. Research limitations/implications – First, although the sample covers some industries, the generalization of the conclusion is still limited due to sample size. In future research, more industries should be covered to test the hypotheses proposed. Second, this paper just analyzes the status quo of Chinese company LCM. Future studies are encouraged to deeply explore internal and external operational management factors impacting on LCM. Practical implications – This paper is a very insightful source of information about LCM in Mainland China for logistics managers and policy makers. This paper provides logistics managers with insight so as to improve their performance. There are also suggestions for government and educational institutions to provide more resources to develop and offer more logistics courses and training programs to fulfill the needs of the logistics industry. The paper sets up a basis for research on LCM in China. Originality/value – Despite the importance of LCM in Mainland China, the extant literatures scarcely have a sound analysis. Theoretically, this paper extends theories of LCM in China and identifies main issues concerning LCM. This paper is an exploratory study to figure out an effective LCM approach in China.