Transport Rates and Network Structure

Transport Rates and Network Structure

The network structure can influence transport rates since it shapes the quantity of traffic transiting through links and nodes and, therefore, the potential for economies of scale along these routes. The above example represents locations with similar characteristics (e.g. population) and generating the same amount of traffic. The transport rates will be influenced by the network structure:

  • Diffused network. An extended service would be characterized by low frequencies and smaller shipments, resulting in high rates on many segments of the network. This is particularly the case for peripheral nodes.
  • Centralized network. A centralized network structure (right side) has less links and a consolidation of flows at hubs. It results in lower rates on several segments that have a higher frequency of service, notably those between hubs. The peripheral nodes have less direct connections, but are subject to lower rates.