Friction of Distance FunctionsThere are four major categories of friction of distance functions:
No effects of distance (1). Uncommon are economic activities
on which distance has no effects. However, the distance-cost function
telecommunication networks and the virtual space of the Internet
have such a cost structure. Telephone calls can be included in this
category as well as postal fees and public transit fares. All those
activities generally have a fixed cost which is not related to distance,
but often to a service zone. Once a new zone is entered (such as
for international phone calls) a new cost structure applies.
Linear effects of distance (2). Transport costs are increasing
proportionally to distance. Fuel consumption can be included in
this category since it is a direct function of the distance traveled.
For reasons of simplicity, a step-wise approach is often used to
establish transport rates by using administrative units as
distance units.
Non-linear effects of distance (3). Freight distribution
costs are growing in a non-linear fashion with distance from the
terminal or the distribution center, particularly because of empty
back-hauls (a). Inversely, international air transportation costs
are not usually much higher than regional air
transportation costs because long haul planes have more capacity
and fuel efficiency
(b).
Intermodal transport chain (4). A combination of linehaul
and terminal costs where transshipment costs at terminals (e.g. ports
and airports) increase the
friction of distance as efforts must be spent at loading or unloading
when passing from one mode to another.
