First Cost Calculation Methods for Road Freight Transport Activity

The transport activity is one of the most expensive processes in the supply chain. Forwarding and transport companies focuses on the optimization of transportation and the reduction of transport costs.

The goal of this study is to develop a method which calculate the first (prime) cost of a given transport task more precisely than the state of the art practices. In practice the calculation of transport fee depends on the individual estimation methods of the transport managers, which could result losses for the company.

In this study the elaborated calculation method for total first cost is detailed for three types of fulfilment of transport tasks. The most common type of achievement is, when “own vehicle is used with own driver”. A software was also developed for this case based on the elaborated method.

Based on the calculations of our software, the first cost can be defined quickly and precisely to realize higher profit.