COST STRUCTURE IN TRANSPORTATION MANAGEMENT

Transportation costs are classify into a number of categories:

1.JOINT

Joint costs are expenses unavoidably created by the decision to provide a particular service. Joint cost have significant impact on transportation charges.



2.VARIABLE

Variable costs change in a predictable, direct manner in relation to some level of activity. Variable cost can be avoided by not operating the vehicle. The variable category includes direct carrier cost associated with movement each load. these expenses are generally measured as a cost per mile or per unit of weight.


3.FIXED

Fixed cost are expenses that do not change in the short run and must be serviced even a company is not operating, such as during a holiday or a strike. The fixed Category includes costs not directly influenced by shipment volume. For transportation firms, a fixed components includes vehicles, terminals, right-of-way, and information system and support equipment.
because carrier quotations must include implied joint cost based on considerations regarding an appropriate back haul shipper and back haul charges against the original shipper.


4)COMMON

This category includes carrier costs that are incurred on behalf of all selected shippers. Common costs, such as terminal or management expenses are characterized as overhead. these are often allocated to shipper according to a level of activity like the number of shipments or delivery appointment handled.

FACTORS IN LOCATING TERMINAL

 As what we know terminal is the common things in logistics field. Terminal is third party of transportation mode. A depot and distribution center placed in a planned area of a major city. Terminal may offer the short term storage to incoming or outgoing freight. Here, we will give some information about the factor that we need to concern in choosing the location of the terminals. The factors in choosing the right place for the terminal are as the following: