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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 could be the rationale for railroad mergers?

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2. Class Rate Calculations
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
Moving to neighboring country - NAFTA - because the places may have close cultural affinity.
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
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.

3. Highway weight limitation
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
563
The intermodal competition has increased dramatically since WW 2
80 - 000 lbs

4. Skimming pricing
Slip-Seating - Bob-Tailing - Hub-And-Spoke System - Drop-and-Hook
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
Moving a corporations internal activities to outside providers - mainly for cheap labor
High price for price insensitive customers.

5. Categories of major pricing decisions
The competition is intense in both TL and LTL segments
Alcoholism in the workplace - Challenges of implementing new technology - Need to increase customer service - Challenges of growing intermodal service
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.
Moderate

6. 20/80 Rule
After World War 2
Highway user taxes
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
Less than 25 carriers handle 75 to 80% of total freight dollar.

7. Starting from which cargo weight and movement distance does it normally make sense to ship by rail?
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
Break bulk - Relay - Pick up - Delivery
30 - 000 lbs and 300 miles
Substantially higher

8. 1 Barge is equivalent to how many tons?
High price for price insensitive customers.
1500 tons
NTSB
Market Forces (customers) - Governmental Controls - Other channel member - Competition.

9. 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
Moving to neighboring country - NAFTA - because the places may have close cultural affinity.
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
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car

10. Which mode has the lowest cost per ton mile?
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
Expanding capacity to benefit from large volume traffic efficiencies and economies of scale - Strengthening financial position and eliminating duplication through side-by-side mergers - Ensuring fair intramodal competition through 'soft' mergers - St
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery
Water (Barge Ships) at 0.72 per ton mile. The second lowest is Rail at 2.24 cents per ton mile.

11. What is the difference between class 1 and class 2 carriers?
Economies of scope and density
High price for price insensitive customers.
(Trucking) Class 1: income > $10M - Class 2: $3M<income<$10M
Less than 25 carriers handle 75 to 80% of total freight dollar.

12. How are interstate highways numbered?
Air
Odd numbers: North to South highways - increase from west to east - Even numbers: East to West highways - increase from south to north
Consolidate orders for several customers and stop along the way for partial unloading.
484

13. What was the golden age of 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
Coal - farm products - chemicals - transportation equipment
A trucking operation that only hauls freight for the firm which owns it
1850-1950

14. Mini Bridge
Discounts: reduction from published price. Volume: TL vs LTL - Seasonal - Cash 2/10 net 30 - Geographical- FOB origin/destination - Uniform delivered pricing: zone pricing.
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.
Far east to east coast or Europe to west coast - final destination is US port city
A batching pig

15. Names of the Class 1 railroads?
A pumping station
Pipeline and Rail
BNSF - CSX Transportation - Kansas City Southern Railway - Grand Truck Corporation - Norfolk Southern - Union Pacific Railroad - Soo Line Railroad
Transfer of function to another country - can stay within the same company!

16. The average annual salary of a locomotive operator compared to a TL driver in the US is...
Expanding capacity to benefit from large volume traffic efficiencies and economies of scale - Strengthening financial position and eliminating duplication through side-by-side mergers - Ensuring fair intramodal competition through 'soft' mergers - St
15
Substantially higher
FedEx - YRC - Conway - UPS - ABF

17. What is the approximate number of railroads in the US?
LTL vs TL - Local vs Intercity Carriers - Publicly owned vs Privately owned - Specialized vs general freight
Motor/Truck - around 69-70% - Revenue % for Rail: 5.6%
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

18. Private Carrier
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.
A trucking operation that only hauls freight for the firm which owns it
Economies of scope and density
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C

19. The problem of driver shortage in the US...
Main penalty is the cost of lost of sales by holding the shipment.
Substantially higher
Is likely to stay and even get worse in the future
Pricing according to cost incurred to serve - Customer covers all costs - seller sets prices to maximize profits.

20. Consular Invoice

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21. What is a typical fixed cost item in the motor carrier industry?
Water (Barge Ships) at 0.72 per ton mile. The second lowest is Rail at 2.24 cents per ton mile.
To save the railroads by giving them a chance to compete with other modes on equal footing
Terminal
Highway user taxes

22. What is the rationale behind passing a federal act in 1956 to create a national system of interstate highways?
Terminal
anywhere between a quarter and a third of all highway travel
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.
To promote interstate commerce and strengthen the defenses of the country

23. It is common for an operating ratio of motor carriers to be around these numbers...
Consolidation
563
Move 1 single commodity and are non-stop to destination.
90-s

24. Labor relations in the US railroad industry?
Far east to east coast or Europe to west coast - final destination is US port city
Few carriers handle more than 25% of total shipment - service disruptions problems if cease operation.
An agreement whereby one railroad pays another for the right to operate its trains over the second carrier's track
The number of unions and the degree of their involvement in operations and labor management contributes to inefficiencies of the railroads

25. Funding the railroads?
Fixed Costs: 30% - Semi-Variable Costs: 40% - Variable Costs: Labor and Gas
About 25 cents per dollar
Not the government - the railroads themselves
Used for tax - manning - and relaxed regulation.

26. Which type of railroad cargo has the highest tonnage share in the US?
Economies of scale
Coal - farm products - chemicals - transportation equipment
Yes
Coal

27. Where does funding for the roads come from?
Highway user taxes
Accessibility - Speed - Universal Connector - Reliability - Frequency - Lower Loss and Damage Rates - Lower Inventory levels due to smaller shipments than other modes
Amenities/Accommodations - Direct flights to destination without layovers - More personal space in flight - In flight service personnel - No frills types of service (no perks)
Sysco - Tyson Foods - Coca-Cola - and Walmart

28. How are airport hub/spoke and LTL breakbulk similar?
FedEx - YRC - Conway - UPS - ABF
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.
15
Specialized: $73 Billion - General: $146 Billion

29. What commodity/goods are typically transported by railroads in the US?
Interior Non-port cities
Coal - farm products - chemicals - transportation equipment
Commercial invoice printed on stationery of importing country's consulate and stamped by consulate.
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.

30. What terms describe a type of operation in trucking?
The development of the highway system - Limited access points - Long transit times - Safety of cargo during transit
Covered Hopper
Use of low-sulfur diesel fuel - Use of biodiesel fuel - Cutting down on idling - Reducing traffic congestion
Slip-Seating - Bob-Tailing - Hub-And-Spoke System - Drop-and-Hook

31. What is the difference between TOFC and COFC service?
Moderate
An agreement whereby one railroad pays a second carrier to transport its freight using the second carrier's crew and power equipment
Expanding capacity to benefit from large volume traffic efficiencies and economies of scale - Strengthening financial position and eliminating duplication through side-by-side mergers - Ensuring fair intramodal competition through 'soft' mergers - St
One method moves the trailer on its wheels while the other moves the container

32. Freight Revenue for Truck/Motor (per ton-mile)
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
Move 1 single commodity and are non-stop to destination.
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%
About 25 cents per dollar

33. What are the characteristics of a block train?
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
Priority service schedule - often empty backhaul - often cars owned by the shipper - and direct movement from origin to destination
Less than 25 carriers handle 75 to 80% of total freight dollar.
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C

34. Types of vehicles for trucking
7%
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
58
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

35. Major commodities hauled by each mode
80 - 000 lbs
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery
Consolidation
Switching - Piggybacking - Double-Stacking - Car-Loading - Trackage - Haulage - Drayage - Demurrage

36. Land Bridge Services
Intermodal in character
ton-miles
Main penalty is the cost of lost of sales by holding the shipment.
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).

37. Near-shoring
Water
Motor/Truck - around 69-70% - Revenue % for Rail: 5.6%
Moving to neighboring country - NAFTA - because the places may have close cultural affinity.
Move 1 single commodity and are non-stop to destination.

38. Core Carrier concept
Coal
83.8%
Few carriers handle more than 25% of total shipment - service disruptions problems if cease operation.
Is likely to stay and even get worse in the future

39. Factors affecting Pricing decisions
Not the government - the railroads themselves
Market Forces (customers) - Governmental Controls - Other channel member - Competition.
563
80 - 000 lbs

40. Cost of Service Pricing
Maximize the utilization of equipment - increase the efficiency of equipment operations - save transit time and operational costs.
Consolidation of shipments to different destinations within the same general area.
anywhere between a quarter and a third of all highway travel
Pricing according to cost incurred to serve - Customer covers all costs - seller sets prices to maximize profits.

41. Which modes have the following cost structure: Low Variable and High Fixed?
Pipeline and Rail
Priority service schedule - often empty backhaul - often cars owned by the shipper - and direct movement from origin to destination
Completely different continent - different time zones.
Maximize the utilization of equipment - increase the efficiency of equipment operations - save transit time and operational costs.

42. Pooling
Consolidation of shipments to different destinations within the same general area.
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.
The development of the highway system - Limited access points - Long transit times - Safety of cargo during transit
Covering variable costs - volume and equipment utilization - and cash flow.

43. UNCTAD liner code 40-40-20
Consolidation of shipments to different destinations within the same general area.
Far east to east coast or Europe to west coast - final destination is US port city
An agreement whereby one railroad pays a second carrier to transport its freight using the second carrier's crew and power equipment
40% each to trade partners & 20% to 3rd world country to develop 3rd world ocean shipping industry - it happened to be inefficient.

44. Mistakes in pricing strategy
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.
A contract for transportation between a shipper and the carrier - also is a cargo receipt
80 - 000 lbs
Pricing according to cost incurred to serve - Customer covers all costs - seller sets prices to maximize profits.

45. What are the current trends in the US railroad?
LTL vs TL - Local vs Intercity Carriers - Publicly owned vs Privately owned - Specialized vs general freight
Increased use of technology - Gradual increase in the number of smaller railroads - Increase in intermodal shipments - Sharp growth in fuel efficiency of locomotives
563
Accessibility - Speed - Universal Connector - Reliability - Frequency - Lower Loss and Damage Rates - Lower Inventory levels due to smaller shipments than other modes

46. Pricing adjustment conditions
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
Federal Railroad Administration (FRA)
Commercial invoice printed on stationery of importing country's consulate and stamped by consulate.
Discounts: reduction from published price. Volume: TL vs LTL - Seasonal - Cash 2/10 net 30 - Geographical- FOB origin/destination - Uniform delivered pricing: zone pricing.

47. Commercial Invoice
80 - 000 lbs
1850-1950
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
Market Forces (customers) - Governmental Controls - Other channel member - Competition.

48. What is a public benefit of railroads?
Break Bulk - Pickup and Delivery - Line Haul - Slip-Seating
Reduced highway congestion - damage and pollution as a result of replacing trucks as an alternative
A pumping station
40% each to trade partners & 20% to 3rd world country to develop 3rd world ocean shipping industry - it happened to be inefficient.

49. What is a road train?
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.
A longer combination vehicle towing more than one trailer
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.
High price for price insensitive customers.

50. Which government agency will investigate a major railroad accident involving public safety?
Specialized: $73 Billion - General: $146 Billion
NTSB
Odd numbers: North to South highways - increase from west to east - Even numbers: East to West highways - increase from south to north
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