A framework to evaluate over-costs in natural resources logistics chains

Abstract

Foreign trade barriers and duties have been significantly reduced by multilateral agreements and integration mechanisms among nations. Logistics costs represent a significant proportion of the final price of the items, especially of the commodities. For this reason, minimizing logistics costs is an important challenge for nations in order to enhance competiveness of foreign trade and in particular to take advantage of natural resources rents. In this article, we propose a holistic framework for estimating logistics costs, focused on determining over costs that result from inefficient procedures and a lack of adequate public policies and regulations of the public entities. These issues have not been considered in the literature, and this article fills this gap. As a case study, we present the application of the framework to estimate over costs in some natural resources logistics chains of Bolivia. A discussion of the results found is presented together with recommendations for further research.