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Quality adjustments Nace 49.41, Freight transport by road.

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Presentation on theme: "Quality adjustments Nace 49.41, Freight transport by road."— Presentation transcript:

1 Quality adjustments Nace 49.41, Freight transport by road

2 Background Lack of knowledge about how to adjust quality changes explicitly within this industry. No ability to Simple overlap, no overlap period. Linked to show no price change has been used as an alternative, risk of downward bias over time.

3 Background, continuation An investigation of quality adjustment methods for Nace 49.41 was made in 2013. Findings Prices are influenced mainly by the costs and the industry is characterized by tough competition and low profit margins. Production cost adjustment is thus considered as the most appropriate method.

4 Production cost for freight transport by road Great impact on the cost (price) Fuel consumption & price Distance Expenditure of time Hourly costs for staff Small influence on the cost (price) Load amount Customer segments Purchasing volume (customers) Rate Costs Surcharge for administration (30 % of personnel costs) Surcharge for vehicle costs (30 % of the fuel costs)

5 How to adjust

6 Example: specifications off the costs Service offering A (old) Specifications Costs Type of goods: Timber Vehicle: Prime mover Specification: 5-axes Price per unit (previous period The vehicle's average fuel consumption Costs Fuel cost400 kilometers11 sek per liter 0,36 liter per kilometer 1 584 sek Personnel costs7 hour 300 sek per hour 2 100 sek Total cost per transport 3 684 sek Service offering B (new) Specifications Costs Type of goods: Timber Vehicle: Prime mover Specification: 5-axes Price per unit (previous period) The vehicle's average fuel consumption Costs Fuel cost470 kilometers11 sek per liter 0,36 liter per kilometer1 861,2 sek Personnel costs8 hour 300 sek per hour 2 400 sek Total cost per transport 4 261,2 sek (Rate costs not need to be taken into the account because these are proportional to the fuel- and personnel costs and therefore does not affect the size of the cost ratio)

7 Example: Calculating the new base period price

8 Example: Index calculation

9 Arisen problems/deficiencies No access or lack of information on the price- relevant variables for the old and the new service offering from several respondents. Respondents contact/burden. Industry knowledge.


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