Level 7 · Part 4
The cost of a trip, and who pays
Count every cost of a journey, including empty returns, and agree who bears losses.
Transport can be the largest cost between farm and market. If you do not count it properly, a sale that looks good may lose money.
- Fuel, or the hire price of a vehicle or porter.
- The driver and the people who load and unload.
- Wear and repairs on a vehicle that you own, and the cost of the money you paid for it.
- Fees, tolls, permits and market charges where they apply.
- Losses and damage on the way.
- The empty trip back, if you come back without a load.
| Item | Amount (invented units) |
|---|---|
| Vehicle hire or fuel | 60 |
| Driver and helpers | 25 |
| Fees and charges | 5 |
| Expected losses on the way | 10 |
| Total cost of the trip | 100 |
| Units delivered | 50 |
| Transport cost per unit | 2 |
Divide the total cost of the trip by the units that actually arrive in good condition, not the units loaded. If you can fill the vehicle and bring a return load, the cost per unit falls.
Agree who bears the risk
Before a trip, agree in writing who pays if goods are damaged, delayed or lost, and how it will be checked. Transport rules, permits and insurance depend on the country and the type of goods, so ask the transport authority and the buyers what applies to you.
Exercise 7.4 · The true cost of my trip
- Choose a trip you make or could make and list every cost, with your own figures from a recent trip or a quote.
- Divide by the units that arrive in good condition to find the transport cost per unit.
- Write two ways to lower the cost per unit: for example sharing, a return load or better packing.
- Compare the cost per unit with the price you receive, and write what you learn.
Background reading for this part:
- Developing Sustainable Food Value Chains: Guiding Principles — Food and Agriculture Organization of the United Nations (FAO), 2014