Planning Sustainable Transport

Chapter 10

Transport costs

It is common to use ‘cost’ and ‘price’ as synonyms: they are not. The price is the money a buyer hands over to a seller for a good or for a service. The cost is the money the seller had incurred in providing it, including, of course, the prices paid to others for the inputs that went into its creation. Prices and costs form a chain: each actor in a supply chain gains revenue from the prices paid for the goods and services they sell but also incurs costs of providing them, costs which include not only the prices paid for raw materials and labour but also for the transport and storage needed to deliver to customers at the right time and place.

The word ‘product’ is now used to cover both goods (tangible items like cars ...