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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. Which mode has the highest carrying capacity?
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
An agreement whereby one railroad pays another for the right to operate its trains over the second carrier's track
Water
Coal - farm products - chemicals - transportation equipment

2. Bill of Lading
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.
A contract for transportation between a shipper and the carrier - also is a cargo receipt
NTSB
Consolidation

3. Types and shares of cost in railroads
Fixed Costs: 30% - Semi-Variable Costs: 40% - Variable Costs: Labor and Gas
To save the railroads by giving them a chance to compete with other modes on equal footing
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
Break Bulk - Pickup and Delivery - Line Haul - Slip-Seating

4. What aspects of the trucking industry is the US involved in?
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
NTSB
High price for price insensitive customers.
1850-1950

5. On the average - per gallon of fuel - US railroads move a ton of freight...
FedEx - YRC - Conway - UPS - ABF
484
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
Consolidate orders for several customers and stop along the way for partial unloading.

6. Unit trains
Moderate
Is likely to stay and even get worse in the future
Move 1 single commodity and are non-stop to destination.
Economies of scope and density

7. 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?
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
Economies of scale
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
A batching pig

8. Factors affecting Pricing decisions
7
Intermodal in character
The intermodal competition has increased dramatically since WW 2
Market Forces (customers) - Governmental Controls - Other channel member - Competition.

9. What is the approximate share of fixed costs of US railroads?
Motor/Truck - around 69-70% - Revenue % for Rail: 5.6%
30%
Air
Pipeline and Rail

10. Private Carrier
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
Terminal
To save the railroads by giving them a chance to compete with other modes on equal footing
A trucking operation that only hauls freight for the firm which owns it

11. What was the rationale behind passing the Staggers Act of 1980?
Not the government - the railroads themselves
To save the railroads by giving them a chance to compete with other modes on equal footing
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
40% each to trade partners & 20% to 3rd world country to develop 3rd world ocean shipping industry - it happened to be inefficient.

12. Far-shoring
58
7
Completely different continent - different time zones.
Far east to east coast or Europe to west coast - final destination is US port city

13. Three kinds of ocean carriers
LTL vs TL - Local vs Intercity Carriers - Publicly owned vs Privately owned - Specialized vs general freight
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
Odd numbers: North to South highways - increase from west to east - Even numbers: East to West highways - increase from south to north
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.

14. Carrier's Operational strategies to minimize cost
Slip-Seating - Bob-Tailing - Hub-And-Spoke System - Drop-and-Hook
Reduced highway congestion - damage and pollution as a result of replacing trucks as an alternative
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.
Odd numbers: North to South highways - increase from west to east - Even numbers: East to West highways - increase from south to north

15. What are the highest variable costs in the railroad industry?
Labor and Fuel
Bottlenecks - Traffic accidents - Major snowfalls - Projects to improve existing highways
Transfer of function to another country - can stay within the same company!
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues

16. What are the major causes of general traffic congestions?
Bottlenecks - Traffic accidents - Major snowfalls - Projects to improve existing highways
Act as a consolidator and domestic freight forwarder - inbound/outbound container arrangement
Commercial invoice printed on stationery of importing country's consulate and stamped by consulate.
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%

17. Which modes have the following cost structure: Low Variable and High Fixed?
Water (Barge Ships) at 0.72 per ton mile. The second lowest is Rail at 2.24 cents per ton mile.
Pipeline and Rail
Coal
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

18. Who has the highest number of coal carloads?
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C
Wyoming
About 25 cents per dollar
Cargo can fit in an enclosed van trailer - Food - consumer staples - manufactured goods

19. Near-shoring
30 - 000 lbs and 300 miles
Break bulk - Relay - Pick up - Delivery
Interior Non-port cities
Moving to neighboring country - NAFTA - because the places may have close cultural affinity.

20. Trackage

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21. 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...
Showed a marked decline
Economies of scale
Market Forces (customers) - Governmental Controls - Other channel member - Competition.

22. What are the current trends in trucking?
Federal Railroad Administration (FRA)
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
Specialized: $73 Billion - General: $146 Billion
1850-1950

23. 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.
Labor and Fuel
To promote interstate commerce and strengthen the defenses of the country
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.
Special Rates

24. Did the US railroads have anything to do with the creation of world time zones?
Reduced highway congestion - damage and pollution as a result of replacing trucks as an alternative
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C
Water
Yes

25. The average annual salary of a locomotive operator compared to a TL driver in the US is...
Substantially higher
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.
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
Pipeline and Rail

26. Consular Invoice

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27. It is common for an operating ratio of motor carriers to be around these numbers...
90-s
100 cars x 100 tons
Main penalty is the cost of lost of sales by holding the shipment.
Fixed Costs: 30% - Semi-Variable Costs: 40% - Variable Costs: Labor and Gas

28. Core Carrier concept
Commercial invoice printed on stationery of importing country's consulate and stamped by consulate.
Few carriers handle more than 25% of total shipment - service disruptions problems if cease operation.
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C
Water

29. Pro-Forma Invoice
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
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C
NTSB

30. What was the golden age of railroads?
1850-1950
Break Bulk - Pickup and Delivery - Line Haul - Slip-Seating
BNSF - CSX Transportation - Kansas City Southern Railway - Grand Truck Corporation - Norfolk Southern - Union Pacific Railroad - Soo Line Railroad
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard

31. What is an approximate capacity of a hopper?
100 tons
Intermodal in character
One method moves the trailer on its wheels while the other moves the container
NTSB

32. Certificate of Inspection
Fixed Costs: 30% - Semi-Variable Costs: 40% - Variable Costs: Labor and Gas
NTSB
Attests to authenticity and accuracy of the goods. Performs by third party independent company
A trucking operation that only hauls freight for the firm which owns it

33. What are the two primary operational indicators in the railroad industry?
Carloads and Ton-miles
Consolidation of shipments to different destinations within the same general area.
Move 1 single commodity and are non-stop to destination.
Yes

34. Intermodal Transportation
One method moves the trailer on its wheels while the other moves the container
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.
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
Intermodal in character

35. Government is involved in which aspects of the railroad business?
Safety regulations - Evaluating fairness of disputed charged rates - Monitoring profitability of railroads - and Mergers and acquisitions
Used for tax - manning - and relaxed regulation.
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard

36. Freight revenue for Modes (per ton-mile)
Pricing according to cost incurred to serve - Customer covers all costs - seller sets prices to maximize profits.
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
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%
Air

37. What is Amtrak?
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
83.8%
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

38. Which phrase best characterizes the level of competition in the motor carrier industry?
The competition is intense in both TL and LTL segments
58
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).
Moving a corporations internal activities to outside providers - mainly for cheap labor

39. LTL terminals are used for connections with these operations...
About 25 cents per dollar
Break Bulk - Pickup and Delivery - Line Haul - Slip-Seating
Transfers accountability between domestic and international carrier at the terminal
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car

40. Name the 3 types of water carriers
Coastal/Intercoastal - Great Lakes - Internal
Break Bulk - Pickup and Delivery - Line Haul - Slip-Seating
40% each to trade partners & 20% to 3rd world country to develop 3rd world ocean shipping industry - it happened to be inefficient.
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

41. Class Rate Calculations
Transfer of function to another country - can stay within the same company!
An agreement whereby one railroad pays another for the right to operate its trains over the second carrier's track
Completely different continent - different time zones.
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.

42. What is the rationale behind passing a federal act in 1956 to create a national system of interstate highways?
A trucking operation that only hauls freight for the firm which owns it
anywhere between a quarter and a third of all highway travel
Consolidation
To promote interstate commerce and strengthen the defenses of the country

43. What is the difference between class 1 and class 2 carriers?
58
Coal
(Trucking) Class 1: income > $10M - Class 2: $3M<income<$10M
Economies of scope and density

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

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45. Types of vehicles for trucking
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.
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...
Service levels - Frequent flyer programs - Timing of flights - In advance registration
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

46. Major commodities hauled by each mode
Commercial Invoice - Pro-Forma Invoice - Consular Invoice
The pickup and delivery of trailers and containers in conjunction with a line-haul rail movement
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery
Specialized: $73 Billion - General: $146 Billion

47. Which Mode of Transportation has the highest volume in tonnage?
LTL vs TL - Local vs Intercity Carriers - Publicly owned vs Privately owned - Specialized vs general freight
Pricing according to cost incurred to serve - Customer covers all costs - seller sets prices to maximize profits.
Motor/Truck - around 69-70% - Revenue % for Rail: 5.6%
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

48. Carriers' Technological and Equipment strategies to minimize costs
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
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
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.
Intermodal in character

49. In terms of tonnage moved by the whole US transportation - the share of railroads is close to this rounded number...
Terminal
Coal
15%~13%
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.

50. Certificate of origin
Interior Non-port cities
Declaration of where product was made so that appropriate duties are charged
15%~13%
To promote interstate commerce and strengthen the defenses of the country