and,
rx - Rx = T - t
x = T - t r - R.
Railroads do not separate the terminal and hauling charge for the good and sufficient reason that if this be done there are a number of other factors of transportation that could with equal reason be segregated. The terminal costs, and by that is considered all the expense except the actual cost of haulage, has been variously computed. G.M. Jones, Bureau of Foreign and Domestic Commerce, United States Department of Commerce, estimates “that the average expense of hauling a ton of freight 240 miles is 74 cents while the cost of handling the same freight at the terminals is 75 cents.”[196]
A more definite and possibly more accurate statement is that of the Inter-State Commerce Commission, also quoted by Lane, p. 53:
The combined average terminal cost at one end is shown to be 10.4 cents per hundred pounds. For two terminal buildings (origin and destination) this figure doubled results in 20.8 cents per hundred pounds; and as this figure contains no elements of overhead costs, or taxes, such costs are arrived at by dividing the terminal cost by the operating ratio.
The operating ratio of the Trunk Line roads for 1915, 1916 and 1917 is 69.6, and the result of dividing the terminal cost of 20.8 cents by the operating ratio is 30 cents per hundred pounds, which covers terminal expenses and overhead for less than carload freight.
An example may be worked out with the assumption that the railway terminal charge is 30 cents per hundredweight, the truck terminal charge is 10 cents, the railway haulage charge is 0.02 cent per hundredweight mile and the truck haulage charge 0.3 cent per hundredweight mile. Then the economical length of the haul must not be less than
x = 30 - 10.3 - .02 = 20.28 = 200028 = 5007 = 71 miles.
The length of haul varies directly as the difference in terminal charges and indirectly as the difference in rates.