Economy of scale in transportation deals with reduced costs in relation to the size of shipment. Larger shipments tend to have lesser cost of transportation per pound since fixed costs associated with transportation are shared/distributed over the entire shipment.
Economy of distance deals with the reduced costs in relation to the distance of shipment. The larger the distance to be shipped, the lesser the cost of transportation per mile of the distance.
Economy of transportation and economy of distance can be clubbed to form an efficient transportation strategy. A company shipping large sized shipments over a longer distance to destination will save more money in terms of transportation costs than a company
shipping smaller shipments multiple times over shorter distances.