The supply chain of the forest industry has increasingly been adjusted to the customer’s needs for precision and quality. This has changed the operative environment both in the forest and on the roads. As the total removal of timber is increasingly divided into more log assortments, the lot size of each assortment decreases and the time consumed in sorting the logs increases. In this respect, the extra assortments have made harvesting work more difficult and affected the productivity of both cutting and forest transport; this has thus increased the harvesting costs. An activity-based cost (ABC) management system is introduced for timber harvesting and long-distance transport, based on the cut-to-length (CTL) method, in which the logistic costs are assigned to timber assortments and lots. Supplying timber is divided into three main processes: cutting, forest transport, and long-distance transportation. An ABC system was formulated separately for each of these main operations. Costs were traced to individual stands and to timber assortment lots from a stand. The cost object of the system is thus a lot of timber that makes up one assortment that has been cut, forwarded, and transported from the forest to the mill. Application of the ABC principle to timber harvesting and trucking was found to be relatively easy. The method developed gives estimates that are realistic to actual figures paid to contractors. The foremost use for this type of costing method should be as a tool to calculate the efficiency of an individual activity or of the whole logistic system.