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Source: P.O. Roberts (1999) “Logistics and Freight Transportation: Review of Concepts Affecting Bulk Transportation”, World Bank. The principle of economies of scale in transportation particularly applies to freight distribution, as costs tend to be inversely proportional to shipment size. Freight shipped in 10 pounds parcels would cost about $1,000 per

Source: Drewry Shipping Consultants. Note: Rates are for full container loads and include the base ocean shipping rate across ship classes, port charges both at origin and at the destination, fuel surcharges and all other surcharges. The rates to ship a 40-foot container (the most common containerized unit) between different

Source: US Energy Information Administration, U.S. Gulf Coast Kerosene-Type Jet Fuel Spot Price FOB, USD per gallon. Fuel accounts for about 40% to 50% of air transport operating costs of a single flight, depending on the type of plane used (economies of scale and fuel efficiency are directly related). While

Source: U.S. Department of Transportation, Bureau of Transportation Statistics and Federal Highway Administration, Freight Analysis Framework, version 4.5, 2019. Different goods have different values when they are transported, often expressed as a ratio of value per ton. While the average ratio was about $900 for all the freight transported in

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 establishing a set of geographic zones where freight rates are equal. The rate is commonly set through the principle where the closest

There are four major categories of friction of distance functions:

Transport costs are subject to a variety of factors:

Source: World Bank, Doing Business project. Note: Cost measures the fees levied on an imported 20-foot container in U.S. dollars (USD). They include costs for documents, administrative fees for customs clearance and technical control, customs broker fees, terminal handling charges and inland transport. The cost measure does not include tariffs

Source: adapted from Global Insight, Inc., TRANSEARCH database, and U.S. Department of Transportation Freight Analysis Framework data. Cargo value and weight are related to the mode of transportation used and are usually the outcome of a balancing act between cost, capacity, and level of service. Freight offers a whole spectrum

A movement between locations A and B involves three cost components in the assessment of the related transport costs: