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Speaking of subsidizing shipping, i seem to recall that the price of postage is fixed no matter the distance and remoteness with the calculation that more traff
by digi_owl 8y ago
Speaking of subsidizing shipping, i seem to recall that the price of postage is fixed no matter the distance and remoteness with the calculation that more trafficed areas then subsidize less trafficed areas.
- spyckie2 8y agoShipping is weird because of cargo loads. It is similar to the airline industry in that as long as you ship enough at a price to cover the operation cost, anything else can theoretically be shipped for free. Routes with high volume usage can take advantage of this and have lower operation costs per unit because the cost is better distributed. So if shipping anywhere is a fixed cost, then yes, you are technically subsidizing less trafficked areas. Volume and cost efficiency is a hard problem to solve, because getting the cost of shipping down is essentially optimizing for this.