Terminal Costs

Terminal Costs

Transport costs can be simplified as a linear function for three modes; road, rail, and maritime. It only considers the cost of loading and transport to the destination, but not unloading. The cost functions all begin at some point up the cost axis, which represents terminal costs. Because of different terminal costs, maritime shipping (T3; port costs) and rail (T2) have significant disadvantages compared to road (T1) over short distances.