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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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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. Survival Based pricing
563
After World War 2
Economies of scope and density
Covering variable costs - volume and equipment utilization - and cash flow.

2. Micro Bridge
1850-1950
Service levels - Frequent flyer programs - Timing of flights - In advance registration
Interior Non-port cities
Break Bulk - Pickup and Delivery - Line Haul - Slip-Seating

3. What are the characteristics of a block train?
FedEx - YRC - Conway - UPS - ABF
High price for price insensitive customers.
Priority service schedule - often empty backhaul - often cars owned by the shipper - and direct movement from origin to destination
The pickup and delivery of trailers and containers in conjunction with a line-haul rail movement

4. How are interstate highways numbered?
Less than 25 carriers handle 75 to 80% of total freight dollar.
Odd numbers: North to South highways - increase from west to east - Even numbers: East to West highways - increase from south to north
Reduced highway congestion - damage and pollution as a result of replacing trucks as an alternative
Coal - farm products - chemicals - transportation equipment

5. Certificate of Inspection
Specialized: $73 Billion - General: $146 Billion
Attests to authenticity and accuracy of the goods. Performs by third party independent company
30 - 000 lbs and 300 miles
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

6. Types and shares of cost in railroads
1500 tons
Air
Fixed Costs: 30% - Semi-Variable Costs: 40% - Variable Costs: Labor and Gas
Economies of scope and density

7. Service competition areas in airline industry
Economies of scale
Moving a corporations internal activities to outside providers - mainly for cheap labor
Amenities/Accommodations - Direct flights to destination without layovers - More personal space in flight - In flight service personnel - No frills types of service (no perks)
Water (Barge Ships) at 0.72 per ton mile. The second lowest is Rail at 2.24 cents per ton mile.

8. Which modes have the following cost structure: Low Variable and High Fixed?
30%
Pipeline and Rail
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.
Break bulk - Relay - Pick up - Delivery

9. Starting from which cargo weight and movement distance does it normally make sense to ship by rail?
Transfers accountability between domestic and international carrier at the terminal
The number of unions and the degree of their involvement in operations and labor management contributes to inefficiencies of the railroads
30 - 000 lbs and 300 miles
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

10. How are airport hub/spoke and LTL breakbulk similar?
100 tons
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 contract for transportation between a shipper and the carrier - also is a cargo receipt
Alcoholism in the workplace - Challenges of implementing new technology - Need to increase customer service - Challenges of growing intermodal service

11. Which mode has the highest carrying capacity?
40% each to trade partners & 20% to 3rd world country to develop 3rd world ocean shipping industry - it happened to be inefficient.
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.
Market Forces (customers) - Governmental Controls - Other channel member - Competition.
Water

12. _____ mode is ideal for moving electronics - expensive items - flowers - or time sensitive materials such as organs
Accessibility - Speed - Universal Connector - Reliability - Frequency - Lower Loss and Damage Rates - Lower Inventory levels due to smaller shipments than other modes
ton-miles
(Trucking) Class 1: income > $10M - Class 2: $3M<income<$10M
Air

13. Benefits of hub and spoke system
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.
Maximize the utilization of equipment - increase the efficiency of equipment operations - save transit time and operational costs.
A batching pig
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks

14. Certificate of origin
Coastal/Intercoastal - Great Lakes - Internal
Reduced highway congestion - damage and pollution as a result of replacing trucks as an alternative
Declaration of where product was made so that appropriate duties are charged
Water

15. What is the difference between class 1 and class 2 carriers?
(Trucking) Class 1: income > $10M - Class 2: $3M<income<$10M
High price for price insensitive customers.
Cargo can fit in an enclosed van trailer - Food - consumer staples - manufactured goods
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...

16. Flags of Convenience
Transfers accountability between domestic and international carrier at the terminal
Used for tax - manning - and relaxed regulation.
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
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. Terms of Payment
To promote interstate commerce and strengthen the defenses of the country
Consolidation
250 - 000
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard

18. What is the difference between TOFC and COFC service?
One method moves the trailer on its wheels while the other moves the container
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
Transfer of function to another country - can stay within the same company!
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

19. Consular Invoice

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20. What is an approximate capacity of a hopper?
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.
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
Less than 25 carriers handle 75 to 80% of total freight dollar.
100 tons

21. The status of competition within the US railroad industry?
Wyoming
Moderate
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).
Far east to east coast or Europe to west coast - final destination is US port city

22. Land Bridge
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
Discounts: reduction from published price. Volume: TL vs LTL - Seasonal - Cash 2/10 net 30 - Geographical- FOB origin/destination - Uniform delivered pricing: zone pricing.
Coastal/Intercoastal - Great Lakes - Internal
Less than 25 carriers handle 75 to 80% of total freight dollar.

23. Third Party Logistics
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...
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.
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C
Reduced highway congestion - damage and pollution as a result of replacing trucks as an alternative

24. 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?
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car
A batching pig
An agreement whereby one railroad pays another for the right to operate its trains over the second carrier's track
Highway user taxes

25. What is a road train?
11 hours straight or anything beyond 70 hours in 8 days
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).
A trucking operation that only hauls freight for the firm which owns it
A longer combination vehicle towing more than one trailer

26. Ways to classify the motor carriers
Highway user taxes
LTL vs TL - Local vs Intercity Carriers - Publicly owned vs Privately owned - Specialized vs general freight
Showed a marked decline
Consolidation of shipments to different destinations within the same general area.

27. What is a public benefit of railroads?
Reduced highway congestion - damage and pollution as a result of replacing trucks as an alternative
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.
The pickup and delivery of trailers and containers in conjunction with a line-haul rail movement
Class 1 - Regional - Shortline - Switching and Terminal

28. Skimming pricing
High price for price insensitive customers.
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
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.
Specialized: $73 Billion - General: $146 Billion

29. What was the golden age of railroads?
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
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.
1850-1950

30. What is the approximate share of fixed costs of US railroads?
Amenities/Accommodations - Direct flights to destination without layovers - More personal space in flight - In flight service personnel - No frills types of service (no perks)
83.8%
Transfers accountability between domestic and international carrier at the terminal
30%

31. What are the types of railcars?
Act as a consolidator and domestic freight forwarder - inbound/outbound container arrangement
7
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car
A longer combination vehicle towing more than one trailer

32. What are the current trends in trucking?
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
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
Showed a marked decline

33. Main forms of Charter Ships
Labor and Fuel
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
Used for tax - manning - and relaxed regulation.
83.8%

34. What is the rationale behind passing a federal act in 1956 to create a national system of interstate highways?
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
Showed a marked decline
Wyoming

35. What are the current trends in the US railroad?
Water (Barge Ships) at 0.72 per ton mile. The second lowest is Rail at 2.24 cents per ton mile.
A contract for transportation between a shipper and the carrier - also is a cargo receipt
Increased use of technology - Gradual increase in the number of smaller railroads - Increase in intermodal shipments - Sharp growth in fuel efficiency of locomotives
A longer combination vehicle towing more than one trailer

36. What aspects of the trucking industry is the US involved in?
100 cars x 100 tons
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
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
Air

37. What term is related to railroad operations?
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.
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.
Switching - Piggybacking - Double-Stacking - Car-Loading - Trackage - Haulage - Drayage - Demurrage
Terminal

38. How many Class 1 freight railroads are there?
Moving to neighboring country - NAFTA - because the places may have close cultural affinity.
Specialized: $73 Billion - General: $146 Billion
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.
7

39. Which US federal government agency enforces safety regulations for railroads?
Federal Railroad Administration (FRA)
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
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
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car

40. Which mode has the lowest cost per ton mile?
Water (Barge Ships) at 0.72 per ton mile. The second lowest is Rail at 2.24 cents per ton mile.
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
Main penalty is the cost of lost of sales by holding the shipment.
Air

41. It is common for an operating ratio of motor carriers to be around these numbers...
A longer combination vehicle towing more than one trailer
83.8%
ton-miles
90-s

42. What is the trend for the miles of road over the past 50 years 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
Water
Showed a marked decline
The competition is intense in both TL and LTL segments

43. What is Amtrak?
To save the railroads by giving them a chance to compete with other modes on equal footing
Pricing according to cost incurred to serve - Customer covers all costs - seller sets prices to maximize profits.
Specialized: $73 Billion - General: $146 Billion
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

44. 1 Barge ship is equivalent to how many trucks?
58
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.
The intermodal competition has increased dramatically since WW 2
Water (Barge Ships) at 0.72 per ton mile. The second lowest is Rail at 2.24 cents per ton mile.

45. Mini Bridge
Labor and Fuel
A contract for transportation between a shipper and the carrier - also is a cargo receipt
Far east to east coast or Europe to west coast - final destination is US port city
7

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.
Covered Hopper
Carloads and Ton-miles
Sysco - Tyson Foods - Coca-Cola - and Walmart
Special Rates

47. Offshoring
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery
Cargo can fit in an enclosed van trailer - Food - consumer staples - manufactured goods
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
Transfer of function to another country - can stay within the same company!

48. Invoices
Slip-Seating - Bob-Tailing - Hub-And-Spoke System - Drop-and-Hook
The number of unions and the degree of their involvement in operations and labor management contributes to inefficiencies of the railroads
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
Commercial Invoice - Pro-Forma Invoice - Consular Invoice

49. What is the truck driving time limitations?
250 - 000
11 hours straight or anything beyond 70 hours in 8 days
Break bulk - Container service - LASH service (lighter aboard ship) - RORO service (roll on/off ship).
Declaration of where product was made so that appropriate duties are charged

50. Private Carrier
A trucking operation that only hauls freight for the firm which owns it
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.
Water
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