Quantifying the determinants of port-hinterland logistics cost from the users’ perspective: an empirical analysis

Quantifying the total logistics cost (TLC) in ports and their hinterland, covering all the direct and indirect cost components, can facilitate a holistic approach to improving the port performance and port choice determinants. A reduction in the direct and indirect costs is influenced by performance improvement resulting in a parallel influence on the port choice determinants. However, there is a lack of research addressing all the direct and indirect costs in ports and their hinterland. To fill this gap, this paper adopts the users’ perspective to examine the TLC in ports and their hinterland and performs the following examinations. First, it calculates the TLC in ports and their hinterland by formulating the TLC function according to the total cost approach from business logistics using the best available data for 39 sample ports-hinterland. Secondly, it investigates different influential determinants of TLC through regression analysis to identify the most important determinants. Finally, a port-hinterland case is used to illustrate how the most influential determinants can impact the TLC reduction through simulation-based scenarios. The findings help the users and policymakers better understand the actual cost of using ports and their hinterland and facilitate identifying the areas where improvements are needed to reduce the TLC.