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Transportation Logistics

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Answer 50 questions in 15 minutes.
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Match each statement with the correct term.
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1. Categories of major pricing decisions
The competition is intense in both TL and LTL segments
1. Setting prices on new services- consider cost and market elasticity; no precedent 2. Modification of prices over time- respond to market/operating/service changes 3. Initiating and responding to price changes- impact on market share and profits.
BNSF - CSX Transportation - Kansas City Southern Railway - Grand Truck Corporation - Norfolk Southern - Union Pacific Railroad - Soo Line Railroad
About 2 cents per dollar

2. Names of the Class 1 railroads?
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%
BNSF - CSX Transportation - Kansas City Southern Railway - Grand Truck Corporation - Norfolk Southern - Union Pacific Railroad - Soo Line Railroad
250 - 000
1850-1950

3. Class Rate Calculations
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
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.
An agreement whereby one railroad pays another for the right to operate its trains over the second carrier's track
Not the government - the railroads themselves

4. Which economies are present in the US railroad industry?
Market Forces (customers) - Governmental Controls - Other channel member - Competition.
Economies of scale
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.
A batching pig

5. What are the characteristics of a block train?
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
7%
Priority service schedule - often empty backhaul - often cars owned by the shipper - and direct movement from origin to destination
Alcoholism in the workplace - Challenges of implementing new technology - Need to increase customer service - Challenges of growing intermodal service

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

7. What factors lead to reduction of air pollution by trucks?
Use of low-sulfur diesel fuel - Use of biodiesel fuel - Cutting down on idling - Reducing traffic congestion
Moderate
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
Pipeline and Rail

8. Which US federal government agency enforces safety regulations for railroads?
To promote interstate commerce and strengthen the defenses of the country
Federal Railroad Administration (FRA)
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
80 - 000 lbs

9. What is the truck driving time limitations?
FedEx - YRC - Conway - UPS - ABF
11 hours straight or anything beyond 70 hours in 8 days
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.
30 - 000 lbs and 300 miles

10. What aspects of the trucking industry is the US involved in?
An agreement whereby one railroad pays a second carrier to transport its freight using the second carrier's crew and power equipment
Class 1 - Regional - Shortline - Switching and Terminal
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks

11. Flags of Convenience
Consolidation
Terminal
Used for tax - manning - and relaxed regulation.
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...

12. Value of Service pricing
Odd numbers: North to South highways - increase from west to east - Even numbers: East to West highways - increase from south to north
Showed a marked decline
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
To save the railroads by giving them a chance to compete with other modes on equal footing

13. What is a road train?
A longer combination vehicle towing more than one trailer
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
7%
250 - 000

14. Mini Bridge
Far east to east coast or Europe to west coast - final destination is US port city
Interior Non-port cities
The number of unions and the degree of their involvement in operations and labor management contributes to inefficiencies of the railroads
Maximize the utilization of equipment - increase the efficiency of equipment operations - save transit time and operational costs.

15. A barge tow is capable of moving how many barges?
Water
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C
15
Consolidation of shipments to different destinations within the same general area.

16. Factors affecting Pricing decisions
Market Forces (customers) - Governmental Controls - Other channel member - Competition.
Move 1 single commodity and are non-stop to destination.
563
After World War 2

17. Price variation factors in airline service
Service levels - Frequent flyer programs - Timing of flights - In advance registration
A pumping station
Main penalty is the cost of lost of sales by holding the shipment.
Coal - farm products - chemicals - transportation equipment

18. What is a public benefit of railroads?
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car
Reduced highway congestion - damage and pollution as a result of replacing trucks as an alternative
Less than 25 carriers handle 75 to 80% of total freight dollar.
An agreement whereby one railroad pays a second carrier to transport its freight using the second carrier's crew and power equipment

19. Name the types of trucking terminals
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
Break bulk - Relay - Pick up - Delivery
ton-miles
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.

20. What are the revenues of the specialized and general cargo?
Specialized: $73 Billion - General: $146 Billion
Act as a consolidator and domestic freight forwarder - inbound/outbound container arrangement
Yes
Less than 25 carriers handle 75 to 80% of total freight dollar.

21. Types and shares of cost in railroads
Use of low-sulfur diesel fuel - Use of biodiesel fuel - Cutting down on idling - Reducing traffic congestion
Fixed Costs: 30% - Semi-Variable Costs: 40% - Variable Costs: Labor and Gas
Service levels - Frequent flyer programs - Timing of flights - In advance registration
40% each to trade partners & 20% to 3rd world country to develop 3rd world ocean shipping industry - it happened to be inefficient.

22. What are the highest variable costs in the railroad industry?
83.8%
Slip-Seating - Bob-Tailing - Hub-And-Spoke System - Drop-and-Hook
Labor and Fuel
Water (Barge Ships) at 0.72 per ton mile. The second lowest is Rail at 2.24 cents per ton mile.

23. Highway weight limitation
80 - 000 lbs
Odd numbers: North to South highways - increase from west to east - Even numbers: East to West highways - increase from south to north
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
83.8%

24. What are the current trends in the US railroad?
(Trucking) Class 1: income > $10M - Class 2: $3M<income<$10M
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%
Increased use of technology - Gradual increase in the number of smaller railroads - Increase in intermodal shipments - Sharp growth in fuel efficiency of locomotives
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car

25. How many Class 1 freight railroads are there?
7
Coastal/Intercoastal - Great Lakes - Internal
1850-1950
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%

26. Types of vehicles for trucking
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
Break Bulk - Pickup and Delivery - Line Haul - Slip-Seating
Is likely to stay and even get worse in the future
A pumping station

27. What are the generally accepted classifications of railroads?
15
Class 1 - Regional - Shortline - Switching and Terminal
Consolidation of shipments to different destinations within the same general area.
One method moves the trailer on its wheels while the other moves the container

28. What is a typical fixed cost item in the motor carrier industry?
Terminal
1850-1950
Economies of scale
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.

29. Service competition areas in airline industry
Amenities/Accommodations - Direct flights to destination without layovers - More personal space in flight - In flight service personnel - No frills types of service (no perks)
Not the government - the railroads themselves
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.
The number of unions and the degree of their involvement in operations and labor management contributes to inefficiencies of the railroads

30. Certificate of origin
anywhere between a quarter and a third of all highway travel
Covering variable costs - volume and equipment utilization - and cash flow.
Declaration of where product was made so that appropriate duties are charged
FedEx - YRC - Conway - UPS - ABF

31. Trackage

32. What is the empirical formula of the typical coal unit train in the US?
100 cars x 100 tons
15%~13%
11 hours straight or anything beyond 70 hours in 8 days
250 - 000

33. Which government agency will investigate a major railroad accident involving public safety?
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.
About 2 cents per dollar
Federal Railroad Administration (FRA)
NTSB

34. 20/80 Rule
563
1. Setting prices on new services- consider cost and market elasticity; no precedent 2. Modification of prices over time- respond to market/operating/service changes 3. Initiating and responding to price changes- impact on market share and profits.
LTL vs TL - Local vs Intercity Carriers - Publicly owned vs Privately owned - Specialized vs general freight
Less than 25 carriers handle 75 to 80% of total freight dollar.

35. Major commodities hauled by each mode
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).
1850-1950
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery
Commercial invoice printed on stationery of importing country's consulate and stamped by consulate.

36. What are the service and public benefits of the railroad industry?

37. 1 Barge ship is equivalent to how many trucks?
Used for tax - manning - and relaxed regulation.
Crushed stone - gravel and sand
58
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues

38. Government is involved in which aspects of the railroad business?
Motor/Truck - around 69-70% - Revenue % for Rail: 5.6%
Safety regulations - Evaluating fairness of disputed charged rates - Monitoring profitability of railroads - and Mergers and acquisitions
Fixed Costs: 30% - Semi-Variable Costs: 40% - Variable Costs: Labor and Gas
83.8%

39. What are the metrics to measure freight traffic in the motor carrier industry?
Covered Hopper
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
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
ton-miles

40. Pooling
Consolidation of shipments to different destinations within the same general area.
Moving to neighboring country - NAFTA - because the places may have close cultural affinity.
Economies of scope and density
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

41. Third Party Logistics
A longer combination vehicle towing more than one trailer
(Trucking) Class 1: income > $10M - Class 2: $3M<income<$10M
Seller asks buyer for l/c - buyer asks its bank to issue l/c - after approving buyer's credit line - buyer's bank notifies seller's bank it has issued l/c - seller's bank either adds confirmation or simply advises seller that l/c has been issued
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...

42. _______ mode would be ideal for moving dry bulk - grains - petroleum - and certain manufactured products not prone to damage during transit
Water
An agreement whereby one railroad pays another for the right to operate its trains over the second carrier's track
11 hours straight or anything beyond 70 hours in 8 days
Reduced highway congestion - damage and pollution as a result of replacing trucks as an alternative

43. Certificate of Inspection
FedEx - YRC - Conway - UPS - ABF
15%~13%
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C
Attests to authenticity and accuracy of the goods. Performs by third party independent company

44. What is the difference between class 1 and class 2 carriers?
Wyoming
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
To promote interstate commerce and strengthen the defenses of the country
(Trucking) Class 1: income > $10M - Class 2: $3M<income<$10M

45. Four types of Liner Service
Intermodal in character
Accessibility - Speed - Universal Connector - Reliability - Frequency - Lower Loss and Damage Rates - Lower Inventory levels due to smaller shipments than other modes
Move 1 single commodity and are non-stop to destination.
Break bulk - Container service - LASH service (lighter aboard ship) - RORO service (roll on/off ship).

46. What was the golden age of railroads?
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car
Safety regulations - Evaluating fairness of disputed charged rates - Monitoring profitability of railroads - and Mergers and acquisitions
Sysco - Tyson Foods - Coca-Cola - and Walmart
1850-1950

47. What companies are players in private carriage?
Increased use of technology - Gradual increase in the number of smaller railroads - Increase in intermodal shipments - Sharp growth in fuel efficiency of locomotives
Alcoholism in the workplace - Challenges of implementing new technology - Need to increase customer service - Challenges of growing intermodal service
Terminal
Sysco - Tyson Foods - Coca-Cola - and Walmart

48. What was the rationale behind passing the Staggers Act of 1980?
Break bulk - Container service - LASH service (lighter aboard ship) - RORO service (roll on/off ship).
1. Setting prices on new services- consider cost and market elasticity; no precedent 2. Modification of prices over time- respond to market/operating/service changes 3. Initiating and responding to price changes- impact on market share and profits.
Increased use of technology - Gradual increase in the number of smaller railroads - Increase in intermodal shipments - Sharp growth in fuel efficiency of locomotives
To save the railroads by giving them a chance to compete with other modes on equal footing

49. What are the types of railcars?
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues
Amenities/Accommodations - Direct flights to destination without layovers - More personal space in flight - In flight service personnel - No frills types of service (no perks)
FedEx - YRC - Conway - UPS - ABF
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car

50. FOB Origin/Destination
A trucking operation that only hauls freight for the firm which owns it
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).
The pickup and delivery of trailers and containers in conjunction with a line-haul rail movement
Consolidate orders for several customers and stop along the way for partial unloading.