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Transportation Logistics

Instructions:

Answer 50 questions in 15 minutes.
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Match each statement with the correct term.
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This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. What is the difference between class 1 and class 2 carriers?
Interior Non-port cities
BNSF - CSX Transportation - Kansas City Southern Railway - Grand Truck Corporation - Norfolk Southern - Union Pacific Railroad - Soo Line Railroad
FedEx - YRC - Conway - UPS - ABF
(Trucking) Class 1: income > $10M - Class 2: $3M<income<$10M

2. Land Bridge Services
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%
Commercial invoice printed on stationery of importing country's consulate and stamped by consulate.
Water (Barge Ships) at 0.72 per ton mile. The second lowest is Rail at 2.24 cents per ton mile.
Intermodal in character

3. Mistakes in pricing strategy
Service levels - Frequent flyer programs - Timing of flights - In advance registration
Over reliance on costs - slow reaction to market changes - ignoring marketing mix - prices not tailored to services and markets - need to price according to strategic plan.
Crushed stone - gravel and sand
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery

4. What were the reasons for the erosion of the railroad dominance in transportation in the US?

5. Land Bridge
One method moves the trailer on its wheels while the other moves the container
Containers moving between Far East & Europe via ship - rail - ship instead of all water through Panama Canal - Use continent U.S. as bridge (move by train) - Save Transit time - fuel - & Liner ship investment
Labor and Fuel
An agreement whereby one railroad pays another for the right to operate its trains over the second carrier's track

6. What are the highest variable costs in the railroad industry?
Transfer of function to another country - can stay within the same company!
Connect buyer and seller- Use of outside firms (outsourcing) to provide own logistics support. Firms: Info-based... freight bill payment - auditing. Asset and operation-based: in/outbound transportation - warehousing...
11 hours straight or anything beyond 70 hours in 8 days
Labor and Fuel

7. What is the truck driving time limitations?
Market Forces (customers) - Governmental Controls - Other channel member - Competition.
Moderate
With both - there are intermediary stops in between a route that serve as loading/consolidating or unloading of passengers/goods and then they are moved on to their final destinations.
11 hours straight or anything beyond 70 hours in 8 days

8. What are the issues facing the US railroads?
Alcoholism in the workplace - Challenges of implementing new technology - Need to increase customer service - Challenges of growing intermodal service
Wyoming
Provides rate for any commodity between any two points 1) Geogrphic: rate basis points and numbers 2) Commodity: commodity classification - class ratings 3) Rate structure: national scale of rates - cwt-based.
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).

9. _____ mode is ideal for moving electronics - expensive items - flowers - or time sensitive materials such as organs
Air
100 tons
Use of low-sulfur diesel fuel - Use of biodiesel fuel - Cutting down on idling - Reducing traffic congestion
Sysco - Tyson Foods - Coca-Cola - and Walmart

10. What are the current trends in trucking?
58
Consolidation of shipments to different destinations within the same general area.
Increased use of technology - Shorter length of haul - Growth of intermodal - Expected increase in rates due to expected capacity shortage - Convergence of LTL market with traditional integrators - Expanded menu of services - Active government lobbyi
A longer combination vehicle towing more than one trailer

11. What is a typical fixed cost item in the motor carrier industry?
Large carrying capacity - versatility of cargo - reduced pollution due to higher fuel efficiency compared to trucking - coast-to-coast 'land bridge' with shorter total transit sea+land times for prevailing import container routes
Terminal
Interior Non-port cities
90-s

12. What aspects of the trucking industry is the US involved in?
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
Bottlenecks - Traffic accidents - Major snowfalls - Projects to improve existing highways

13. What is the trend for the miles of road over the past 50 years in the US railroad industry?
Wyoming
Over reliance on costs - slow reaction to market changes - ignoring marketing mix - prices not tailored to services and markets - need to price according to strategic plan.
1500 tons
Showed a marked decline

14. UNCTAD liner code 40-40-20
Move 1 single commodity and are non-stop to destination.
Large carrying capacity - versatility of cargo - reduced pollution due to higher fuel efficiency compared to trucking - coast-to-coast 'land bridge' with shorter total transit sea+land times for prevailing import container routes
40% each to trade partners & 20% to 3rd world country to develop 3rd world ocean shipping industry - it happened to be inefficient.
To save the railroads by giving them a chance to compete with other modes on equal footing

15. Freight Revenue for Rail (per ton-mile)
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues
Continuous straight line movement - minimize intermediate handlings - maximize the full capacity of equipment - consolidation and break-bulk activities - empty mileage should be minimized - movement should be scheduled and dispatched.
About 2 cents per dollar
Maximize the utilization of equipment - increase the efficiency of equipment operations - save transit time and operational costs.

16. Examples of general freight
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car
Cargo can fit in an enclosed van trailer - Food - consumer staples - manufactured goods
Moderate

17. Carriers' Technological and Equipment strategies to minimize costs
Maximize the operational time of equipment - fuel efficient speeds - vahicle weight should be minimized - standardized equipment - equipment should be adapted to special market and commodity requirements.
Discounts: reduction from published price. Volume: TL vs LTL - Seasonal - Cash 2/10 net 30 - Geographical- FOB origin/destination - Uniform delivered pricing: zone pricing.
About 25 cents per dollar
Break bulk - Relay - Pick up - Delivery

18. Which phrase best characterizes the level of competition in the motor carrier industry?
Amtrak is a US government business since 1971 - created to ease the burden on private railroads by taking over money-locing passenger transportation in exchange for the right to operate Amtrak trains over their networks
The competition is intense in both TL and LTL segments
Pricing according to cost incurred to serve - Customer covers all costs - seller sets prices to maximize profits.
Priority service schedule - often empty backhaul - often cars owned by the shipper - and direct movement from origin to destination

19. Three kinds of ocean carriers
Liner Shipping- ply fixed routes on published schedule - Tramp Shipping- charter ships - lease based on time or voyage - Private Vessels- ship registry; flags of convenience for regulations.
Completely different continent - different time zones.
Special Rates
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).

20. Starting from which cargo weight and movement distance does it normally make sense to ship by rail?
Specialized: $73 Billion - General: $146 Billion
Intermodal in character
30 - 000 lbs and 300 miles
100 tons

21. Mini Bridge
FedEx - YRC - Conway - UPS - ABF
Switching - Piggybacking - Double-Stacking - Car-Loading - Trackage - Haulage - Drayage - Demurrage
Over reliance on costs - slow reaction to market changes - ignoring marketing mix - prices not tailored to services and markets - need to price according to strategic plan.
Far east to east coast or Europe to west coast - final destination is US port city

22. 20/80 Rule
Less than 25 carriers handle 75 to 80% of total freight dollar.
Break bulk - Relay - Pick up - Delivery
BNSF - CSX Transportation - Kansas City Southern Railway - Grand Truck Corporation - Norfolk Southern - Union Pacific Railroad - Soo Line Railroad
Showed a marked decline

23. Service competition areas in airline industry
Break bulk - Container service - LASH service (lighter aboard ship) - RORO service (roll on/off ship).
Amenities/Accommodations - Direct flights to destination without layovers - More personal space in flight - In flight service personnel - No frills types of service (no perks)
A pumping station
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery

24. Pro-Forma Invoice
Safety regulations - Evaluating fairness of disputed charged rates - Monitoring profitability of railroads - and Mergers and acquisitions
BNSF - CSX Transportation - Kansas City Southern Railway - Grand Truck Corporation - Norfolk Southern - Union Pacific Railroad - Soo Line Railroad
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C
Containers moving between Far East & Europe via ship - rail - ship instead of all water through Panama Canal - Use continent U.S. as bridge (move by train) - Save Transit time - fuel - & Liner ship investment

25. FOB Origin/Destination
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).
Terminal
An agreement whereby one railroad pays a second carrier to transport its freight using the second carrier's crew and power equipment
After World War 2

26. What companies are players in private carriage?
Crushed stone - gravel and sand
Voyage: Time - Bareboat or demise Voyage: Similar to taxi - ship owner - responsibility for crews & operation Time: Rent Vessel & crew for period of time Bareboat/Demise: Long period - chartering party responsibility for crews & operation
Yes
Sysco - Tyson Foods - Coca-Cola - and Walmart

27. Near-shoring
Crushed stone - gravel and sand
Substantially higher
58
Moving to neighboring country - NAFTA - because the places may have close cultural affinity.

28. Where does funding for the roads come from?
Odd numbers: North to South highways - increase from west to east - Even numbers: East to West highways - increase from south to north
Highway user taxes
11 hours straight or anything beyond 70 hours in 8 days
Accessibility - Speed - Universal Connector - Reliability - Frequency - Lower Loss and Damage Rates - Lower Inventory levels due to smaller shipments than other modes

29. Freight Revenue for Truck/Motor (per ton-mile)
Commercial Invoice - Pro-Forma Invoice - Consular Invoice
Main penalty is the cost of lost of sales by holding the shipment.
About 25 cents per dollar
Maximize the operational time of equipment - fuel efficient speeds - vahicle weight should be minimized - standardized equipment - equipment should be adapted to special market and commodity requirements.

30. Types and shares of cost in railroads
Containers moving between Far East & Europe via ship - rail - ship instead of all water through Panama Canal - Use continent U.S. as bridge (move by train) - Save Transit time - fuel - & Liner ship investment
Fixed Costs: 30% - Semi-Variable Costs: 40% - Variable Costs: Labor and Gas
Motor/Truck - around 69-70% - Revenue % for Rail: 5.6%
Federal Railroad Administration (FRA)

31. What are the characteristics of a block train?
15
Increased use of technology - Gradual increase in the number of smaller railroads - Increase in intermodal shipments - Sharp growth in fuel efficiency of locomotives
Service levels - Frequent flyer programs - Timing of flights - In advance registration
Priority service schedule - often empty backhaul - often cars owned by the shipper - and direct movement from origin to destination

32. Which mode has the highest carrying capacity?
The use of two or more modes to move a shipment from origin to destination. -Malcom McLean first move freight by truck and rail in 1950.
One method moves the trailer on its wheels while the other moves the container
Water
About 25 cents per dollar

33. Class Rate Calculations
Substantially higher
Provides rate for any commodity between any two points 1) Geogrphic: rate basis points and numbers 2) Commodity: commodity classification - class ratings 3) Rate structure: national scale of rates - cwt-based.
Break Bulk - Pickup and Delivery - Line Haul - Slip-Seating
Far east to east coast or Europe to west coast - final destination is US port city

34. The whole history of the US railroads is a history of...
NTSB
Act as a consolidator and domestic freight forwarder - inbound/outbound container arrangement
Consolidation
Increased use of technology - Gradual increase in the number of smaller railroads - Increase in intermodal shipments - Sharp growth in fuel efficiency of locomotives

35. Unit trains
Move 1 single commodity and are non-stop to destination.
100 cars x 100 tons
Terminal
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues

36. 1 Barge ship is equivalent to how many trucks?
Increased use of technology - Gradual increase in the number of smaller railroads - Increase in intermodal shipments - Sharp growth in fuel efficiency of locomotives
58
Break bulk - Relay - Pick up - Delivery
Water (Barge Ships) at 0.72 per ton mile. The second lowest is Rail at 2.24 cents per ton mile.

37. Value of Service pricing
Special Rates
Pricing according to product value or demand - higher value of the product - the higher the transportation price (risk of loss/damage..). Third Degree price discrimination: separate price for separate groups of buyers with same service. Must posses
1850-1950
Water

38. The number of for-hire motor carriers in the US currently falls somewhere in the middle of this range...
Connect buyer and seller- Use of outside firms (outsourcing) to provide own logistics support. Firms: Info-based... freight bill payment - auditing. Asset and operation-based: in/outbound transportation - warehousing...
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery
250 - 000
90-s

39. Certificate of origin
About 25 cents per dollar
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
anywhere between a quarter and a third of all highway travel
Declaration of where product was made so that appropriate duties are charged

40. The average annual salary of a locomotive operator compared to a TL driver in the US is...
40% each to trade partners & 20% to 3rd world country to develop 3rd world ocean shipping industry - it happened to be inefficient.
Substantially higher
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues
7%

41. Line of credit process

42. What are the generally accepted classifications of railroads?
The use of two or more modes to move a shipment from origin to destination. -Malcom McLean first move freight by truck and rail in 1950.
With both - there are intermediary stops in between a route that serve as loading/consolidating or unloading of passengers/goods and then they are moved on to their final destinations.
Class 1 - Regional - Shortline - Switching and Terminal
Moderate

43. What is the rationale behind passing a federal act in 1956 to create a national system of interstate highways?
Alcoholism in the workplace - Challenges of implementing new technology - Need to increase customer service - Challenges of growing intermodal service
1850-1950
To promote interstate commerce and strengthen the defenses of the country
Containers moving between Far East & Europe via ship - rail - ship instead of all water through Panama Canal - Use continent U.S. as bridge (move by train) - Save Transit time - fuel - & Liner ship investment

44. Third Party Logistics
High price for price insensitive customers.
Society and customer first.
Connect buyer and seller- Use of outside firms (outsourcing) to provide own logistics support. Firms: Info-based... freight bill payment - auditing. Asset and operation-based: in/outbound transportation - warehousing...
Reduced highway congestion - damage and pollution as a result of replacing trucks as an alternative

45. What must be used in intervals when transporting pulverized coal mixed with water at long distances?
A pumping station
anywhere between a quarter and a third of all highway travel
LTL vs TL - Local vs Intercity Carriers - Publicly owned vs Privately owned - Specialized vs general freight
The intermodal competition has increased dramatically since WW 2

46. 1. Character of shipment rates: LTL/TL rates - multiple-car rates - incentive rates - unit train rates - density rates... 2. Area - location or route rates: Local rates - joint rates - proportional rates - differential rates - per mile rate.
Special Rates
Covering variable costs - volume and equipment utilization - and cash flow.
Declaration of where product was made so that appropriate duties are charged
Coastal/Intercoastal - Great Lakes - Internal

47. Cost of Service Pricing
90-s
Pricing according to product value or demand - higher value of the product - the higher the transportation price (risk of loss/damage..). Third Degree price discrimination: separate price for separate groups of buyers with same service. Must posses
Consolidation
Pricing according to cost incurred to serve - Customer covers all costs - seller sets prices to maximize profits.

48. Which government agency will investigate a major railroad accident involving public safety?
Water
100 tons
NTSB
Coal - farm products - chemicals - transportation equipment

49. What is the current share of trucking in total transportation expenses is closest to...
Water
Line-Haul Vehicles: Tractor Trailer combination of 3 or more axles - City Straight Vehicles: Single Units - Special Vehicles: Dry Van - Open Top - Flatbed - Tank Trailer - Special
Liner Shipping- ply fixed routes on published schedule - Tramp Shipping- charter ships - lease based on time or voyage - Private Vessels- ship registry; flags of convenience for regulations.
83.8%

50. Certificate of Inspection
Reduced highway congestion - damage and pollution as a result of replacing trucks as an alternative
Class 1 - Regional - Shortline - Switching and Terminal
Showed a marked decline
Attests to authenticity and accuracy of the goods. Performs by third party independent company