Road: Unit Costs (cost per kilometer driven)

Unit costs are the direct costs incurred by delivery vehicles per kilometer that they drive. Unit costs typically consist of fixed and variable costs. Fixed costs do not vary with vehicle use. They are composed of vehicle costs, financing costs, basedriver wages and items such as insurance and registration fees. Variable costs on the other hand, vary linearly with vehicle use and consist of fuel, maintenance, tires and any variable driver wages. Cost reduction is at the core of competitiveness and therefore is mostly a commercial matter. Unusually low-unit costs can be an indicator that operators are externalizing costs onto urban residents such as through overloading, the use of low-quality fuel or the use of obsolete or non-compliant trucks.