Design of a logistics costs analyzer to formulate distribution routes for freight forwarders

Nowadays, the globe is suffering an economic downturn and the competition within the logistics industry has become more and more intense. Therefore, a number of logistics services providers (LSPs), such as freight forwarding companies, is facing with a decline in business volume. It is believed that the reason of profit loss is due to high operating and transportation costs within the logistics network. LSPs, in such sense, try to reappraise the current logistics network and relocate the distribution centres for cutting operating costs, reducing lead time, and enhancing customer service level. In order to help these companies achieve these goals, a decision support system (DSS) is required to analyze various factors including inbound freight costs, warehousing costs, and outbound freight costs under different scenarios. In this paper, a logistics costs analyzer (LCA) is proposed to reduce freight costs and shorten delivery time by selecting appropriate suppliers and constructing effective distribution routes. With the help of LCA, the supply chain performance would be improved.