Joint Cost

Joint cost is also known as back haul or returning cost. This cost is associated with providing a particular service. For e.g.: a shipment is to be transported from place ‘A’ to place ‘B’. The transport will charge the customer a price which will include all expenses like fuel, taxes, maintenance with his profit margin. After sending off the consignment at place ‘B’, the vehicle has to come back to its original place ‘A’. This cost is fall into returning to place ‘A’ is associated with the earliest cost of consignment. Hence this cost is called as joint cost. Joint costs have significant impact on transportation charges because carrier quotation must include implied joint costs based on consideration regarding an appropriate back- haul shippers and/or back- haul charges against the original shipper.