Zonal Transport Rates

Zonal Transport Rates

Real freight rates can be complicated to calculate for a transport company, especially when there are a large number of customers. A common answer to this problem is to establish a set of geographic zones where freight rates are equal. The rate is commonly set through the principle where the closest customers in a zone are partially subsidizing the furthest customers. For instance, under a zonal rate system, a customer located at D1 pays the same rate as a customer located at D2. Under a distance-based system, the customer at D1 would have paid a lower rate than a customer located at D2. Many transit systems are also using a zonal rate structure organized around concentric rings from the city center.