FACTORS AFFECTING TRANSPORTATION COSTS IN LOGISTICS: A COMPREHENSIVE ANALYSIS OF THE DRIVERS BEHIND FREIGHT AND SHIPPING COSTS, THEIR QUANTITATIVE SIGNIFICANCE, AND STRATEGIC IMPLICATIONS FOR SUPPLY CHAIN MANAGEMENT.

Abstract

Transportation costs sit at the heart of global commerce. They determine how much businesses pay to move goods, how competitive companies can be in distant markets, and ultimately, how much consumers pay for products on the shelf. In 2023, global logistics costs surpassed 11 trillion US dollars, representing roughly 10.6 percent of the world's GDP, according to Statista. Of that enormous figure, transportation alone accounts for approximately 40 to 50 percent of total logistics expenses.

This article examines the principal factors that shape transportation costs in logistics: fuel prices, distance, cargo characteristics, mode of transport, labor, infrastructure, regulatory compliance, market demand, and geopolitical disruptions. Drawing on data from the American Transportation Research Institute (ATRI), OECD, Statista, and industry publications, the paper quantifies how each factor contributes to cost formation, highlights recent trends, and identifies strategic responses available to logistics professionals.