Financial Tribune - Diseconomies of scale, low efficiency of players in the distribution system and high overhead costs are the challenges facing Iran's logistics sector, which lead to high costs of distribution services and low transparency

Transportation expenses, which involve the cost of incorporating raw materials into the production process and/or finished goods being shipped out to the customer, account for 12% of the total price of a product in Iran compared with the global average of 6%, says an expert with the Institute for Trade Studies and Research affiliated with Industries Ministry.

Mohammad Reza Sa’adat added that costs associated with storage and materials handling constitute 6.6% of the end price of products in Iran compared with 3.3% in the world.

“The total logistics costs in our country make up 19.4% of the total price of a product whereas the share stands at 9.7-11.3% globally,” he was quoted as saying by the news outlet of Tehran Chamber of Commerce, Industries, Mines and Trade.