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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. Pricing adjustment conditions
Labor and Fuel
Discounts: reduction from published price. Volume: TL vs LTL - Seasonal - Cash 2/10 net 30 - Geographical- FOB origin/destination - Uniform delivered pricing: zone pricing.
563
Amenities/Accommodations - Direct flights to destination without layovers - More personal space in flight - In flight service personnel - No frills types of service (no perks)

2. Factors affecting Pricing decisions
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
The number of unions and the degree of their involvement in operations and labor management contributes to inefficiencies of the railroads
High price for price insensitive customers.
Market Forces (customers) - Governmental Controls - Other channel member - Competition.

3. What are the revenues of the specialized and general cargo?
To promote interstate commerce and strengthen the defenses of the country
Labor and Fuel
Pricing according to cost incurred to serve - Customer covers all costs - seller sets prices to maximize profits.
Specialized: $73 Billion - General: $146 Billion

4. Who has the highest number of coal carloads?
1850-1950
Economies of scale
Wyoming
Labor and Fuel

5. Skimming pricing
The competition is intense in both TL and LTL segments
High price for price insensitive customers.
Crushed stone - gravel and sand
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

6. Drayage
An agreement whereby one railroad pays another for the right to operate its trains over the second carrier's track
The pickup and delivery of trailers and containers in conjunction with a line-haul rail movement
Completely different continent - different time zones.
Class 1 - Regional - Shortline - Switching and Terminal

7. Name the types of trucking terminals
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.
83.8%
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues

8. What is the approximate number of railroads in the US?
After World War 2
The development of the highway system - Limited access points - Long transit times - Safety of cargo during transit
Economies of scope and density
563

9. What companies are players in private carriage?
Completely different continent - different time zones.
15%~13%
About 2 cents per dollar
Sysco - Tyson Foods - Coca-Cola - and Walmart

10. _______ mode would be ideal for moving dry bulk - grains - petroleum - and certain manufactured products not prone to damage during transit
Transfers accountability between domestic and international carrier at the terminal
Coal
Water
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C

11. Land Bridge Services
Coastal/Intercoastal - Great Lakes - Internal
Intermodal in character
Not the government - the railroads themselves
BNSF - CSX Transportation - Kansas City Southern Railway - Grand Truck Corporation - Norfolk Southern - Union Pacific Railroad - Soo Line Railroad

12. How are airport hub/spoke and LTL breakbulk similar?
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
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.
Covering variable costs - volume and equipment utilization - and cash flow.
Showed a marked decline

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

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14. What are the generally accepted classifications of railroads?
Class 1 - Regional - Shortline - Switching and Terminal
ton-miles
The number of unions and the degree of their involvement in operations and labor management contributes to inefficiencies of the railroads
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks

15. Labor relations in the US railroad industry?
Increased use of technology - Gradual increase in the number of smaller railroads - Increase in intermodal shipments - Sharp growth in fuel efficiency of locomotives
The number of unions and the degree of their involvement in operations and labor management contributes to inefficiencies of the railroads
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
An agreement whereby one railroad pays a second carrier to transport its freight using the second carrier's crew and power equipment

16. Outsourcing
Moving a corporations internal activities to outside providers - mainly for cheap labor
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.
LTL vs TL - Local vs Intercity Carriers - Publicly owned vs Privately owned - Specialized vs general freight
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

17. Pro-Forma Invoice
Slip-Seating - Bob-Tailing - Hub-And-Spoke System - Drop-and-Hook
Declaration of where product was made so that appropriate duties are charged
Break bulk - Relay - Pick up - Delivery
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C

18. What was the golden age of railroads?
1850-1950
Water
(Trucking) Class 1: income > $10M - Class 2: $3M<income<$10M
An agreement whereby one railroad pays a second carrier to transport its freight using the second carrier's crew and power equipment

19. Offshoring
Not the government - the railroads themselves
Specialized: $73 Billion - General: $146 Billion
Transfer of function to another country - can stay within the same company!
Discounts: reduction from published price. Volume: TL vs LTL - Seasonal - Cash 2/10 net 30 - Geographical- FOB origin/destination - Uniform delivered pricing: zone pricing.

20. What are the reasons for the relative decline of the US railroads after World War 2?
Commercial Invoice - Pro-Forma Invoice - Consular Invoice
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%
The trends in supply chain management called for faster and more frequent services and smaller inventories - so many shippers preferred trucks - - The newly built system of inland waterways swayed cost-conscious shippers to less expensive barge tran
Consolidation

21. FOB Origin/Destination
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).
ton-miles
Labor and Fuel
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

22. Although the Interstate Highway System accounts for about 1% of total public road mileage - it carries...
anywhere between a quarter and a third of all highway travel
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...
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
A trucking operation that only hauls freight for the firm which owns it

23. What are the highest variable costs in the railroad industry?
Labor and Fuel
Consolidation
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.
Yes

24. A barge tow is capable of moving how many barges?
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery
15
Consolidation
Consolidate orders for several customers and stop along the way for partial unloading.

25. Bill of Lading
100 tons
Air
A contract for transportation between a shipper and the carrier - also is a cargo receipt
Intermodal in character

26. Invoices
Maximize the utilization of equipment - increase the efficiency of equipment operations - save transit time and operational costs.
Is likely to stay and even get worse in the future
1500 tons
Commercial Invoice - Pro-Forma Invoice - Consular Invoice

27. A pumping station requires 3-6000HP to move oil through a pipeline. To move more than 1 grade at same time what do you use?
A batching pig
BNSF - CSX Transportation - Kansas City Southern Railway - Grand Truck Corporation - Norfolk Southern - Union Pacific Railroad - Soo Line Railroad
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
Showed a marked decline

28. What is Amtrak?
Highway user taxes
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C
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
1500 tons

29. 1 Barge is equivalent to how many tons?
Alcoholism in the workplace - Challenges of implementing new technology - Need to increase customer service - Challenges of growing intermodal service
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).
Accompanies shipment - Bill for the goods from the seller to the buyer - Often used by government to determine the true value of goods when assessing customs duties
1500 tons

30. Mini Bridge
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/Truck - around 69-70% - Revenue % for Rail: 5.6%
High price for price insensitive customers.
Far east to east coast or Europe to west coast - final destination is US port city

31. What commodity/goods are typically transported by railroads in the US?
15
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car
Coal - farm products - chemicals - transportation equipment
Is likely to stay and even get worse in the future

32. Non-vessel operating common carriers (NVOCC)
Act as a consolidator and domestic freight forwarder - inbound/outbound container arrangement
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C
30 - 000 lbs and 300 miles
58

33. Far-shoring
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
Completely different continent - different time zones.
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
Market Forces (customers) - Governmental Controls - Other channel member - Competition.

34. Which economies are present in the US railroad industry?
Economies of scale
58
Main penalty is the cost of lost of sales by holding the shipment.
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues

35. What are the current trends in trucking?
Safety regulations - Evaluating fairness of disputed charged rates - Monitoring profitability of railroads - and Mergers and acquisitions
One method moves the trailer on its wheels while the other moves the container
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
30%

36. What terms describe a type of operation in trucking?
To promote interstate commerce and strengthen the defenses of the country
Break bulk - Relay - Pick up - Delivery
Transfers accountability between domestic and international carrier at the terminal
Slip-Seating - Bob-Tailing - Hub-And-Spoke System - Drop-and-Hook

37. What are the current trends in the US railroad?
Economies of scope and density
Increased use of technology - Gradual increase in the number of smaller railroads - Increase in intermodal shipments - Sharp growth in fuel efficiency of locomotives
Priority service schedule - often empty backhaul - often cars owned by the shipper - and direct movement from origin to destination
30%

38. What factors lead to reduction of air pollution by trucks?
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
Use of low-sulfur diesel fuel - Use of biodiesel fuel - Cutting down on idling - Reducing traffic congestion
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
Is likely to stay and even get worse in the future

39. 20/80 Rule
Far east to east coast or Europe to west coast - final destination is US port city
Break bulk - Container service - LASH service (lighter aboard ship) - RORO service (roll on/off ship).
Coastal/Intercoastal - Great Lakes - Internal
Less than 25 carriers handle 75 to 80% of total freight dollar.

40. Which mode has the highest carrying capacity?
100 tons
Transfers accountability between domestic and international carrier at the terminal
Water
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.

41. Government is involved in which aspects of the railroad business?
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
Safety regulations - Evaluating fairness of disputed charged rates - Monitoring profitability of railroads - and Mergers and acquisitions
Moving a corporations internal activities to outside providers - mainly for cheap labor
1500 tons

42. What is the truck driving time limitations?
11 hours straight or anything beyond 70 hours in 8 days
Not the government - the railroads themselves
Consolidation of shipments to different destinations within the same general area.
Service levels - Frequent flyer programs - Timing of flights - In advance registration

43. Near-shoring
Break Bulk - Pickup and Delivery - Line Haul - Slip-Seating
Slip-Seating - Bob-Tailing - Hub-And-Spoke System - Drop-and-Hook
Moving to neighboring country - NAFTA - because the places may have close cultural affinity.
Carloads and Ton-miles

44. What must be used in intervals when transporting pulverized coal mixed with water at long distances?
A pumping station
BNSF - CSX Transportation - Kansas City Southern Railway - Grand Truck Corporation - Norfolk Southern - Union Pacific Railroad - Soo Line Railroad
Bottlenecks - Traffic accidents - Major snowfalls - Projects to improve existing highways
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car

45. Which modes have the following cost structure: Low Variable and High Fixed?
90-s
100 cars x 100 tons
Service levels - Frequent flyer programs - Timing of flights - In advance registration
Pipeline and Rail

46. Core Carrier concept
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
Few carriers handle more than 25% of total shipment - service disruptions problems if cease operation.
Pipeline and Rail
484

47. Cost of Service Pricing
Carloads and Ton-miles
Move 1 single commodity and are non-stop to destination.
Declaration of where product was made so that appropriate duties are charged
Pricing according to cost incurred to serve - Customer covers all costs - seller sets prices to maximize profits.

48. What do the users of truck service benefit?
The development of the highway system - Limited access points - Long transit times - Safety of cargo during transit
Accessibility - Speed - Universal Connector - Reliability - Frequency - Lower Loss and Damage Rates - Lower Inventory levels due to smaller shipments than other modes
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
After World War 2

49. What is a typical fixed cost item in the motor carrier industry?
Terminal
7%
Sysco - Tyson Foods - Coca-Cola - and Walmart
About 2 cents per dollar

50. Major commodities hauled by each mode
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery
Gov't aid to develop air service - Gov't funding of highways - Construction of inland waterways - Growing preference of shippers for more frequent deliveries and smaller shipments
1850-1950
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks