Common Cost

If a transporter is delivering different consignment in the same vehicle by combine many LTL(less than truck load) into a single TL (truck load), each LTL is for a different vehicle. Because of this, the vehicle is breaks down and required to be repairs. This cost of repairs cannot be charged to any single consumer because it is common to all the customers. Hence it wills proportionately fixed to all the customers. Therefore it is called a common cost. Common costs such as terminal or management expenses are characterized as overheads. These are often allocated to a shipper according to a level of activity like the number of shipments handled.