Economics Of Cement Transportation ? Introduction

The increasing demand for large volumes of relatively low-cost cement has resulted in the need for an equally low-cost high-volume means for transporting that cement. It has been estimated that 20% - 25% of the total cost of cement to the buyer represents delivery expenses from the mills. For instance, during the 1972 cement shortage in the Southeastern region of the U. S., bid prices for a ton of cement delivered increased to $45 compared to $20 average at mill price, i. e. , F. O. B. plant. Much of the increase was caused by the anticipated higher cement shipping costs for longer hauling distance. The exceptionally high bid price, of course, was not the price quoted by the successful bidder. Thus, clearly, cement is not a marketable commodity unless it can be economically transported to the consumer.