Shipping costs can be a strain on your company’s bottom line, especially if you’re using assisted or automatic production systems in the game.

This tutorial will cover some tips to minimize your shipping costs.

Let’s first look at how we calculate shipping costs.

In the game, shipping costs come from the infrastructure rating of the two cities where the vehicle is traveling.

It also accounts for the fuel rate of the two cities, the global gas rate, and the distance between the cities.

Over time, the shipping costs per distance decreases. However, sometimes increasing global fuel costs offsets this.

The better the ratings of the cities, the lower the shipping costs are. The closer the cities are together, the lower the costs are.

How does the game decide where a vehicle goes?

The game sorts every branch location you’re selling a specific model in by sales price.

The location with the highest price gets their orders first.

They source their order from the closest factory within their assigned shipping distance or restrictions.

When that factory runs out of inventory, the branch will pull units from the next closest within its shipping distance or restriction.

If more than one branch has the same sales price, the game will sort them by distance to the closest factory.

===Individual Model Production Tips===

If you’re managing production individually, you’ll find a couple of costs metrics to the side of the Branch Distribution Window.

The Min-Max Transport Costs Per Unit displays a range of costs to ship the vehicle to this branch with the current shipping distance setting.

The game can not predetermine the exact shipping costs because it requires the sales figures to process first, and other location’s demand can alter where vehicles come from.

Either way, the price will not be lower than the min, nor higher than the max unless you change the shipping distance.

Estimated Units in Shipping Range displays the number of vehicles produced or in inventory within the current shipping distance.

===District Production Tips===

If you enable district locks, the game will not ship vehicles outside of the selected district.

This action can increase costs in some situations.

For example, if you have a branch in Athens, and factories in London and Istanbul,

And you have Athens’ locked to the European District, it will only get vehicles from London, even though Istanbul would be cheaper.

When using district locks, we recommend operating many smaller factories in the district rather than a few large factories.

Then you would spread your production out across the district.

If you use the districting system to manage production, it will automatically spread out production across the district.

However, if you have many models, you will run out of production lines at some locations, which may cause some non-optimal shipping situations.

===Auto Production Tips===

Because of technical issues, Autoproduction overrides your shipping settings.

By default, the Autoproduction system sets all shipping distances to global.

However, the game includes several options to restrict and shape shipping with the Autoproduction system.

We cover these systems in the Autoproduction Shipping Restrictions video.

Some things to note, the Restrict Shipping to the Same Region/Continent restriction has similar issues as District locks.

Unlike the Districting system, Autoproduction does not spread production around unless it runs out of factory lines.

You should use the "Limit Production To" restriction to shape your production and produce certain types of vehicles in certain places. We cover this shortly.

=== General Tips ===

1) Shipping Costs are a large expense before World War 2. Historically, companies produced as locally as possible.

After World War 2, shipping costs decrease considerably. At this time, you can consider regional production rather than local production.

Around the late 70s, shipping costs decrease enough that it becomes feasible to ship globally. At which time, you may want to consider labor costs more than shipping costs when building factories.

2) When it comes to building factories before World War 2, build large factories near major sales centers and smaller factories further away.

3) You should produce high volume, low margin vehicle models near branches that sell the most.

Also, produce lower volume, high margin vehicles further away from major population centers.

Cheaper vehicles, such as phaetons, tend to make fewer profits per vehicle. And high shipping costs eat into this profit.

Since shipping costs are linear with the number of vehicles you ship, if you produce more of these units closer to where you sell the bulk of them, you’ll reduce transportation costs per vehicle.

Low-volume vehicles, such as Limousines, make more profits per vehicle but sell fewer vehicles.

You can absorb more transportation costs per unit with these types of vehicles because they have higher margins and low volume.

If you’re using Autoproduction, use the "Limit Production To" restriction to force this convention.

4) When you price vehicle models the same, the game will ship vehicles closest to a factory first before ones further away.

This mechanic could cause increased shipping costs in some situations.

For instance, you have a branch in Los Angeles, many factories on the east coast, a single factory in the center of the United States, and some branches close to this factory.

When you price the vehicle model the same, Los Angeles gets their vehicles last because all other branches are closer to factories.

If the branches in the center empty the factory in the middle of the country, Los Angeles will have to get vehicles from the East Coast, thus increasing shipping costs considerably.

A solution to this issue is to sell the vehicle for a higher price in Los Angeles. This action will put Los Angeles at the top of the shipping list.

Los Angeles will get vehicles from the central factory.

If Los Angeles empties the central factory, the branches near it will have to get their vehicles from the East Coast.

While the shipping costs for the branches near the center will go up slightly, there will be a larger drop in the Los Angeles shipping costs.

These concepts are not always foolproof, but you should consider them if you are running into issues with transportation costs.