What are the main components of a transport cost model?

• A. Fixed handling/dispatch charges, variable freight rates, distance/weight-based costs, fuel surcharges, and accessorial charges.
• B. Only insurance costs and taxes.
• C. Packaging material costs.
• D. Costs of product development.

Answer: (A)

Think of a transport cost model as capturing what it costs to move goods from one place to another. The main pieces are fixed charges for handling or dispatch, which don’t depend on how far or how much you move; variable freight rates that vary with the carrier’s pricing; costs that scale with distance or weight, since longer routes and heavier shipments require more resources; fuel surcharges that track changes in fuel prices; and accessorial charges for extra services like inside delivery, liftgate, or special handling. Together, these elements reflect the real drivers of transportation cost as shipments change.

Insurance costs, taxes, packaging materials, and product development are not part of the core transport cost model. They can affect total cost, but they’re not direct price drivers of moving goods.