Revisiting the Conventional Wisdom on Transportation Costs
Figure 2.1
17
Comparison of Transport Prices in Different Parts of the World, 2006–07
12
11
10 7
8
4
3.5
4
te dS ta te s
6
az il
average transport prices (in US cents per tkm)
14
5
5
8
5
2
2
Ch W in es a te lo rn ng Eu -d ro ist pe an – Af ce ric a– Du r Lu ban sa – Af ka Ou ric ag a–L ad om ou é Af go – ric u a– M om Ka ba m sa Af pa – ric la a– Nd Dou jam ala én – a
Br
Un i
Pa kis t
an
0
Source: Teravaninthorn and Raballand 2008. Note: tkm = ton per kilometer.
Box 2.1
Breakdown of Vehicle Operating Costs Transport companies group their costs in two categories: 1. Fixed costs Pro rata temporis independent of vehicle usage (factor α) Financial charges, depreciation of investment, wages, facilities, taxes (including vehicle taxes) 2. Variable costs (factor β)
Proportional to vehicle usage (distance or trips) Fuel, subsistence, road user charges Maintenance, tires, taxes
Hence, Operating Costs per km =
Fixed Monthly Costs + Variable Costs (Distance per Month * Load factor)
The usual benchmark for operating cost (widely used in international comparisons) is the cost of traction per km for a 40-foot container or a semi-trailer. Source: Authors.
Fixed costs are lower in developing countries because: • Labor costs are a small percentage (5 percent or less) of total operating costs, while they constitute up to half of the operating costs in western Europe.