Krugman (1991) J. Pol. Econ. 99, 3 suggests that so long as transport costs are low, firms can benefit from concentrating in a single location and delivering products to farmers in another location. Alonso-Villar (2005) J. Econ. Geog. 5, 5 finds that the effects of cost reductions in transporting final goods are different from those in intermediate goods. For feeder costs (the costs of transferring freight from large ships/vehicles/aircraft to smaller ones) and handling costs (the costs of physically shifting the freight), and marginal cost/revenue analysis, see Konings (2007) J. Transp. Geog. 15, 6. Baier and Bergstrand (2001) J. Transp. Geog. 53, 1 find that, for the growth in world trade, 1992–2000, trade liberalization was three times more important than transport costs.
Knowles (2006) J. Transp. Geog. 14, 6 adds the concept of cost/space convergence to time–space convergence: ‘time/space and cost/space have both collapsed differentially and especially in the last 50 years. Small but incremental changes can have significant consequences for time/cost–space convergence or divergence whilst response lags and inefficient decision making retard change. Collapses in time/space and cost/space are due to innovations in air, rail, road and sea transport technology, communications and handling technology. The differential spatial effects reflect a more unequal world and are largely due to unequal investment in modal capacity, routes and terminals at local, national and international scales. This tends to enhance the importance of the largest demand centres in developed countries and of nodal centrality and intermediacy.’ Knowles summarizes the result as a ‘shrunken, misshapen world’. Combes and Lafourcard (2005) J. Econ. Geog. 5, 3 show that transport technology and market structure are responsible for most of the transport cost decrease. ‘Infrastructure improvements only condition the spatial distribution of the gains.’ See Link (2005) J. Transp. Geog. 13, 1 on the social costs of transport: pollution, noise, and accidents among them.