In the Costs section, Daniel mentioned that the fixed cost dominates the levelized cost of driving for most personal vehicles. However, this can change for different vehicles, like large trucks. Lets try computing the levelized cost of driving in $/km for an 18 wheeler with the characteristics below. Then, we'll use this information to estimate how much shipping contributes to the cost of bananas.

• The truck costs $150000 to buy.
• It can haul 16000 kg of bananas.
• The capital charge factor is 0.22.
• The taxes, fees, and insurance each year total to $10000.
• The truck is driven 220000 km/year.
• Variable operation and maintenance (VOM) costs add up to $0.021 per kilometer.
• Fuel costs $1.10 per liter.
• The truck can travel 100 km on 45 L of fuel.

Part 1: What are the fixed costs in dollars per kilometer?

answer in dollars per km

Part 2: What are the variable costs in dollars per kilometer?

answer in dollars per km

Part 3: Its also interesting to look at how much shipping contributes to the final price of goods. It often ends up being surprisingly low. Using the levelized cost of driving above, how much does driving contribute to the final price of bananas that are shipped by 18-wheeler from Los Angeles to Denver (1600 km)? Answer in $/kg of bananas. For reference, bananas sell for around $1.25/kg in the US.

answer in dollars per kg

Part 4: Finally, lets look at the incredibly low fuel use of container shipping over the ocean. It usually takes 6-7x less fuel to ship a given payload a given distance than it would to drive it. If the bananas were shipped 6000 km over the ocean from Ecuador to Los Angeles, was more fuel used for ocean shipping or truck shipping from LA to Denver? Enter the word "ocean" or "truck". If the numbers are within 10% of each other, enter the word "same".