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January 29, 2014

Cost of Transportation

Nowadays, cost of transportation is one of the important aspects that always being issued in logistics world services. All of these, because of, fuels plays big role as it will give big impact towards the transportation itself in deciding the price for the service provided.

As each transport provider must pay the price in order to produce transportation services, thus the transport cost played as a monetary measure for the services. Transportation costs are classified into a number of categories which is variable, fixed, joint and common cost.

Variable cost is a cost changing depends on situation. It not just situation, but also the distance could be as one of the facets for this variable costs. In the view of distance, it can be measure by how far the shipment will be delivering to the destination. The longer the distance, will result to the increasing cost of transportation itself.

While for fixed cost, firms still have to pay for this type of cost even when they’re not running the operation during the holiday day. Which means, for instance firm still need to pay for the leasing cost of the vehicles that used for the distribution product.

Joint cost is a kind of an expensive cost. It usually cost incurred by those people that are request for special kind of services. This service is provided at anytime and the destination based on customers want. The total cost is a combination from the customer’s places to the destination, plus the destination till to where the transport provider comes.

Last but not least, common cost is a must have that transport provider incurs once they’re start to deliver and distribute firm’s products to many places. This costs actually depends on the workers itself on how they managed the using cost, for instance cost of food and drinking.

As for the conclusion, many facets should be focus on, thus the cost of transportation will be more effectively towards the firm. And it will be running more efficiently for the delivering the shipment until receive to the location’s requested.

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