How Your Degree in Economics Will Help With Logistics

by Kevin Wandrei
Economics prepares a student to understand how to make a shipment go smoothly.

Economics prepares a student to understand how to make a shipment go smoothly.

A career in logistics involves assessing the movement and supply of products and people across the world. While typically associated with jobs in business as supply chain analysts, logistics applies elsewhere, too. For example, in the wake of an environmental disaster, logistics are used to help facilitate the movement of recovery materials. A degree in economics can provide the skills needed to manage and analyze logistics.

Quantitative Skills

Because of economics' mathematical nature, a major in this field usually requires course work in math, statistics and econometrics. Rutgers University, for example, requires its economics majors to complete at least one course in calculus. For the purposes of logistics, all of this quantitative work is valuable. A key function of logistics is analyzing data about the movement of people and things; a degree in economics provides the prerequisite background, including an understanding of the data-processing software often used on the job.

Macroeconomic Understanding

Logistics operations do not happen in isolation, so the impact of the broader economy is always important. For example, a company involved with transporting products between China and the U.S. would value having someone on its logistics team who understands the macroeconomics of the oil market. Changes in fuel prices effect transportation logistics. In addition, many logistics managers are involved with negotiating prices, so understanding the current state of the economy would help in determining the proper negotiation starting point.

Decision Analysis

One key element of a logistics job involves analyzing decisions and the implications of those choices. Fortunately, microeconomics, which is often a first course in an economics degree, focuses on decision analysis. Microeconomics considers how and why people make decisions and the affects of these many decisions when aggregated. Deciding where to transport certain goods or how people will react to a change in the movement of goods are parts of a logistics career, and microeconomics provides a foundation in the subject.

Optimization Research

While closely related to decision analysis, optimization research is another aspect logistics for which an economic major is well-prepared. Another aspect of microeconomics' decision analysis emphasis involves trying to find points of optimization. The concept of budget constraints and indifference curves or supply-and-demand all pivot on finding a point of optimization. Logistics jobs focus on finding the optimum number of something: the number of products to manufacture or the best number of shipments to make, for example. As such, an economics degree prepares a student for this aspect of a logistics career.

About the Author

Kevin Wandrei has written extensively on higher education. His work has been published with Kaplan,, and Shmoop, Inc., among others. He is currently pursuing a Master of Public Administration at Cornell University.

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