The hidden cost of transportation of construction materials: An overview

Construction is possibly one of the most cost orientated industries in any economy. The primary mode of supplier selection has always tended to be on the basis of lowest material or service cost at point of consumption. Indeed, this remains the case even in the post‐Latham (1994) and Egan (1998) world in which we live. In general, construction cost estimates are based on a straight ‘take off’ of the quantities required. All further ‘other’ costs in the form of overhead, profit, labour and wastage are consolidated into the cost of the materials. Construction is unique within the various industries making up a modern economy in that the bulk of the materials and components that it uses are of relatively low value while being of high volume. Consequently, a significant proportion of the ‘other’ costs associated with materials purchases must be in the form of transportation from the point of extraction and / or production to the point of consumption. This paper provides an overview of the hidden costs associated with the transportation of construction materials within the industry and proposes improved methods of managing the logistics of the construction process e.g. reverse logistics, in order to reduce costs and increase the basic sustainability of the construction process.