Types of Transport Costs
Mobility is influenced by transport costs. Empirical evidence for passenger vehicle use underlines the relationship between annual vehicle mileage and fuel costs, implying the higher fuel costs are, the lower the mileage. At the international level, doubling of transport costs can reduce trade flows by more than 80%. The more affordable mobility is, the more frequent the movements and the more likely they will take place over longer distances. Empirical evidence also underlines that transport costs tend to be higher in the early or final stages of a movement, also known as the first and the last mile. A wide variety of transport costs can be considered.
Terminal costs. Costs that are related to the loading, transshipment and unloading. Two major terminal costs can be considered; loading and unloading at the origin and destination, which are unavoidable, and intermediate (transshipment) costs that can be avoided. For complex transport terminals, such as ports and airports, terminal costs can involve a wide array of components.
Linehaul costs. Costs that are a function of the distance over which a unit of freight or passenger is carried. Weight is also a cost function when freight is involved. They include labor and fuel and commonly exclude transshipment costs.
Capital costs. Costs applying to the physical assets of transportation mainly infrastructures, terminals and vehicles. They include the purchase or major enhancement of fixed assets, which can often be a one-time event. Since physical assets tend to depreciate over time, capital investments are required on a regular basis for maintenance.