FACTORS AFFECTING TRANSPORTATION COST

Running head: FACTORS AFFECTING TRANSPORTATION COST
FACTORS AFFECTING TRANSPORTATION COST
Name of Student
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Author Note

FACTORS AFFECTING TRANSPORTATION COST1
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Fuel cost.................................................................................................................................2
Human resource cost..............................................................................................................3
Demand for freight.................................................................................................................3
Customer’s loyalty.................................................................................................................3
Vehicle capacity.....................................................................................................................4
Government regulation...........................................................................................................4
Geopolitical events.................................................................................................................4
Your reputation as a merchant...............................................................................................4
Conclusion..................................................................................................................................5
References..................................................................................................................................5
Conclusion..................................................................................................................................5
References..................................................................................................................................5

FACTORS AFFECTING TRANSPORTATION COST2
Introduction
Transportation cost refers to cost of moving the products and services from one place
to another majorly for the purpose of sale to the consumers. For instance businesses incur
transportation cost for transferring their goods to the retailers for sale to consumers.
Transportation costs are usually uncertain because the merchant transferring the goods
through shipment may not know the actual cost until they receive the invoice from the carrier
of the goods. There are a number of factors that have an affect over the transportation cost.
Some of these factors includes- the fuel cost, the human resource cost, demand for freight,
customers loyalty, vehicle capacity and others (Brazil et al., 2019). The main aim of the paper
is to discuss about all the factors affecting the transportation cost and discussing about
various concepts related to the same and showing the applicability of the factors to the real-
world situations.
Discussion
Fuel cost
The land transportation and cost and the maritime cost are related to the fuel prices
and is therefore affected by the same. This is so because if the fuel costs fall, the cargo trucks
and container ships also become cheaper for operators and therefore the transportation cost as
a whole also goes down. Moreover the losses or savings made in the transportation cost due
to the fuel cost is ultimately passed on to the consumers wither directly with the help of
component of fuel cost that will further be built on the pricing model of the carrier. On the
other hand, in case of any rise in the fuel prices the same will have to be borne by the
merchant (Kabongo Booto et al., 2020). For instance: Qantas airlines fuels cost affects its
transportation cost. As it is prominent that the company was forced to increased their fares for