Terminal Costs

Terminal Costs

The above graph represents a simplified assumption concerning transport costs for three modes; road, rail and maritime. It only considers the cost of loading and transport to 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 disadvantage compared to road (T1) over short distances.