Perhaps a graphic representation might make my proposal more understandable.
I forgot to say that quantity is in units of cargo/month. This rewards expedient delivery
Now if this model is adopted Revenue is separated from Costs.
In the current model, distance modifies revenue which means the costs are explicitly and directly linked with revenue!
This is a disastrous set of affairs!
Now in my model, the closer a supplying industry is to a demanding industry the more advantageous it is for the player. Furthermore the more and more the player supplies per month the more and more he increases his revenue (up to the point of elasticity). So the player will work towards connecting even industries further away if the marginal cost of connecting them is lower than the marginal revenue gain. This is up to him to calculate and is fun doing so.
This doesn't only make industries themselves prefer those closer by,
it makes the player prefer those industries which can produce him the most cargo and those to whom supplying the cargo costs the least and takes the least amount of time. Whether the greatest advantage is in an industry he finds far away or one he finds close by is the product of these factors.
Distance has no relationship with revenue or cargo payment rates, rather it is up to the player to set prices and decide which routes to choose both short and long to make the most profit.
This means
A) He is rewarded the most for effecient and quick transport from nearby suppliers to nearby demanders
B) Also rewarded the exact same amount for efficient and quick transport for those suppliers far away if delivered in the same amount of time.
C) Most rewarded the most he supplies, which inevitably forces the player to supply from long and short routes alike, whereas in the current model high produce short routes are completely unfeasible for no reason at all.
Cargo payment rates are decided by the player in such a way where he tries to make the most profit possible while meeting the demand at that price.
As Andy mentioned much earlier, the game puts you in perspective of the transport company and accordingly transport companies take the costs of transport into account when setting prices, thus justifying the increased cargo payment rates over long distances.
Well if that's the case then let's put the player in the shoes of the transport company and allow him to set the cargo payment rates.
That's where the idea comes from and that's how it proposes to solve the dilemma.
Now, as a disclaimer, in case you don't understand why equilibrium price is the most advantageous then I ask you to consider two things.
One) What happens when the price is set too high?
Two) What happens when the price is set to low?
In answering these questions you will reach understanding.