Analysis on activity-based costing approach for jd logisitics warehousing operation (Nanning area)

Abstract

This study applies the Activity-Based Costing (ABC) method to analyze the logistics operating costs of JD Nanning Intelligent Logistics Park during 2022–2023 and proposes targeted cost-reduction measures. The findings indicate that the park’s total annual operating costs increased moderately from 100,801,612.1 RMB in 2022 to 101,421,155.9 RMB in 2023, with the warehouse management center accounting for the largest share (average 44.71% over the two years). The sorting and processing center’s cost proportion rose significantly from 30.59% to 36.74%, while the transportation and distribution center’s share declined from 25.24% to 18.02%. Concurrently, order volume grew from 20,752,226 to 23,155,985 orders. Compared with traditional costing methods, ABC yielded a lower per-order cost (2.81 RMB vs. 3.19 RMB), demonstrating higher accuracy in cost management. Monthly cost fluctuations showed peaks in warehousing and sorting during specific periods (e.g., June and year-end), while transportation costs remained relatively stable, especially in H2 2023. The application of ABC enabled a clear identification of cost drivers across warehousing, sorting, and transportation by linking resources (labor, equipment depreciation, utilities, etc.) to specific activities (order processing, inventory handling, distribution, etc.). This approach accurately reflected resource consumption at each operational stage, facilitating precise evaluation of cost behavior amid operational changes (e.g., increased orders during promotions). TheE insights derived from ABC provide a basis for formulating strategies to reduce operating costs and enhance efficiency in JD Nanning Intelligent Logistics Park