A transporter may fine a minimum permanent amount irrespective of the distance to be traveled and after that some way or distance the fine will be on per unit distance basis. For e.g. / k.m. Therefore, normally as the distance increases the cost per unit distance is being reduced regularly.
The transportation cost per kilometer comes down as the distance moved increases. Hence transportation is planned in a single long lap rather than number of short laps to reach the destination. The fixed costs and costs like overheads of loading and unloading are spread over the distance through which the load is moved.
E.g. a shipment of 1000 miles will cost less than two shipments (of the same combined weight) of 500 miles.
Transportation economy of distance is also referred to as tapering principle since rates or charges taper with distance. The rationale of distance economies is similar to that for economies of scale. Longer distances allow the fixed expenses to be spread over more miles, resulting in lower overall per mile charge.
Basic regulatory policy has attempted to foster competition among privately owned transportation companies. To encourage economical and wide- spread transportation supply, the government invested in public infrastructure such as highways, waterways, and deep water ports. However, to actually provide transportation service, the government supported and regulated a system of privately owned for- hire carriers.
A transporter may fine a minimum permanent amount irrespective of the distance to be traveled and after that some way or distance the fine will be on per unit distance basis. For e.g. / k.m. Therefore, normally as the distance increases the cost per unit distance is being reduced regularly.The transportation cost per kilometer comes down as the distance moved increases. Hence transportation is planned in a single long lap rather than number of short laps to reach the destination. The fixed costs and costs like overheads of loading and unloading are spread over the distance through which the load is moved.E.g. a shipment of 1000 miles will cost less than two shipments (of the same combined weight) of 500 miles.Transportation economy of distance is also referred to as tapering principle since rates or charges taper with distance. The rationale of distance economies is similar to that for economies of scale. Longer distances allow the fixed expenses to be spread over more miles, resulting in lower overall per mile charge.Basic regulatory policy has attempted to foster competition among privately owned transportation companies. To encourage economical and wide- spread transportation supply, the government invested in public infrastructure such as highways, waterways, and deep water ports. However, to actually provide transportation service, the government supported and regulated a system of privately owned for- hire carriers.
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