Background: This thesis investigates the complexities of supply chain management, emphasizing the critical role of logistics and transportation in ensuring efficiency and competitiveness. It examines the significant impact of transportation costs, which constitute a substantial portion of logistics expenses, and the challenges faced by the transportation sector due to market uncertainties. These uncertainties make it difficult for transportation companies to accurately estimate costs, which is crucial for decreasing logistics expenses and achieving transportation efficiency.

Purpose: The purpose of this thesis is to analyze the supply chain and identify the factors that influence freight rates in the contracted road transportation market. By understanding how these factors impact freight rates, whether causing them to increase or decrease, the thesis aims to enable businesses to plan their transportation costs proactively and enhance their competitiveness and efficiency by decreasing logistics costs.

Method: The thesis uses mixed methods. For qualitative study results are collected from the field experts. As for the quantitative approach we analyzed contracted freight rates with quantifiable measurements.

Conclusion: Thesis findings revealed key cost elements, such as fuel and labor, that influence freight rates and can be used as cost predictors. Furthermore, market conditions including infrastructure quality, congestion and economic factors, disruptions can significantly influence freight rates, but they cannot be used as predictors alone, since their predicting values are not strong enough. The study concludes that understanding both cost elements and market dynamics is essential for accurate freight rate estimation, which is vital for maintaining competitiveness and efficiency in the rapidly evolving transportation sector.