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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. What is a typical fixed cost item in the motor carrier industry?
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.
Is likely to stay and even get worse in the future
The competition is intense in both TL and LTL segments
Terminal

2. Which phrase best characterizes the level of competition 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.
Terminal
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
The competition is intense in both TL and LTL segments

3. Certificate of origin
Covered Hopper
Special Rates
A longer combination vehicle towing more than one trailer
Declaration of where product was made so that appropriate duties are charged

4. Service competition areas in airline industry
Few carriers handle more than 25% of total shipment - service disruptions problems if cease operation.
Amenities/Accommodations - Direct flights to destination without layovers - More personal space in flight - In flight service personnel - No frills types of service (no perks)
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.
Pipeline and Rail

5. 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
Used for tax - manning - and relaxed regulation.
Is likely to stay and even get worse in the future
Fixed Costs: 30% - Semi-Variable Costs: 40% - Variable Costs: Labor and Gas

6. What are the generally accepted classifications of railroads?
Reduced highway congestion - damage and pollution as a result of replacing trucks as an alternative
Main penalty is the cost of lost of sales by holding the shipment.
About 25 cents per dollar
Class 1 - Regional - Shortline - Switching and Terminal

7. How does the US railroad industry compete with other modes?
The intermodal competition has increased dramatically since WW 2
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
Highway user taxes
Moving a corporations internal activities to outside providers - mainly for cheap labor

8. Class Rate Calculations
Coal - farm products - chemicals - transportation equipment
About 25 cents per dollar
Alcoholism in the workplace - Challenges of implementing new technology - Need to increase customer service - Challenges of growing intermodal service
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.

9. How many Class 1 freight railroads are there?
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%
7
(Trucking) Class 1: income > $10M - Class 2: $3M<income<$10M
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues

10. Terms of Payment
The intermodal competition has increased dramatically since WW 2
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
Few carriers handle more than 25% of total shipment - service disruptions problems if cease operation.
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

11. Which mode has the highest carrying capacity?
Cargo can fit in an enclosed van trailer - Food - consumer staples - manufactured goods
Water
Transfers accountability between domestic and international carrier at the terminal
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C

12. What was the golden age of railroads?
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).
1850-1950
15
Coastal/Intercoastal - Great Lakes - Internal

13. Pro-Forma Invoice
Maximize the utilization of equipment - increase the efficiency of equipment operations - save transit time and operational costs.
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C
Coastal/Intercoastal - Great Lakes - Internal
After World War 2

14. What is the primary railroad cargo out of Arkansas by tonnage?
Far east to east coast or Europe to west coast - final destination is US port city
To save the railroads by giving them a chance to compete with other modes on equal footing
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
Crushed stone - gravel and sand

15. _______ mode would be ideal for moving dry bulk - grains - petroleum - and certain manufactured products not prone to damage during transit
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.
15%~13%
To save the railroads by giving them a chance to compete with other modes on equal footing
Water

16. What are the LTL carriers?
Not the government - the railroads themselves
Special Rates
FedEx - YRC - Conway - UPS - ABF
Odd numbers: North to South highways - increase from west to east - Even numbers: East to West highways - increase from south to north

17. Unit trains
Move 1 single commodity and are non-stop to destination.
To promote interstate commerce and strengthen the defenses of the country
Not the government - the railroads themselves
1500 tons

18. Starting from which cargo weight and movement distance does it normally make sense to ship by rail?
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues
30 - 000 lbs and 300 miles
Alcoholism in the workplace - Challenges of implementing new technology - Need to increase customer service - Challenges of growing intermodal service
Move 1 single commodity and are non-stop to destination.

19. What factors lead to reduction of air pollution by trucks?
83.8%
The pickup and delivery of trailers and containers in conjunction with a line-haul rail movement
Intermodal in character
Use of low-sulfur diesel fuel - Use of biodiesel fuel - Cutting down on idling - Reducing traffic congestion

20. Near-shoring
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.
Attests to authenticity and accuracy of the goods. Performs by third party independent company
Moving to neighboring country - NAFTA - because the places may have close cultural affinity.
Completely different continent - different time zones.

21. Mistakes in pricing strategy
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
Special Rates
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.
100 cars x 100 tons

22. What is the approximate share of fixed costs of US railroads?
30%
Federal Railroad Administration (FRA)
Less than 25 carriers handle 75 to 80% of total freight dollar.
7

23. Trackage

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24. What could be the rationale for railroad mergers?

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25. What is the empirical formula of the typical coal unit train in the US?
Not the government - the railroads themselves
100 cars x 100 tons
Economies of scale
Yes

26. Drayage
Main penalty is the cost of lost of sales by holding the shipment.
A batching pig
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 pickup and delivery of trailers and containers in conjunction with a line-haul rail movement

27. What are the types of railcars?
Pricing according to cost incurred to serve - Customer covers all costs - seller sets prices to maximize profits.
A batching pig
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car
Special Rates

28. Which type of a railcar has the highest share in terms of its numbers in service in the US?
Special Rates
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
Pipeline and Rail
Covered Hopper

29. Outsourcing
Pipeline and Rail
Moving a corporations internal activities to outside providers - mainly for cheap labor
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery
ton-miles

30. What aspects of the trucking industry is the US involved in?
Water
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
Bottlenecks - Traffic accidents - Major snowfalls - Projects to improve existing highways
Motor/Truck - around 69-70% - Revenue % for Rail: 5.6%

31. Third Party Logistics
Break bulk - Container service - LASH service (lighter aboard ship) - RORO service (roll on/off ship).
Covered Hopper
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...
The pickup and delivery of trailers and containers in conjunction with a line-haul rail movement

32. On the average - per gallon of fuel - US railroads move a ton of freight...
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
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues
Less than 25 carriers handle 75 to 80% of total freight dollar.
484

33. FOB Origin/Destination
Free on Board- Origin (seller pays shipping costs); Destination (Buyer pays).
Covering variable costs - volume and equipment utilization - and cash flow.
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
30 - 000 lbs and 300 miles

34. A barge tow is capable of moving how many barges?
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
15
Moving a corporations internal activities to outside providers - mainly for cheap labor
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

35. Factors contributing to the decline of Railroad use
The intermodal competition has increased dramatically since WW 2
7%
The development of the highway system - Limited access points - Long transit times - Safety of cargo during transit
Highway user taxes

36. Four types of Liner Service
58
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%
Break bulk - Container service - LASH service (lighter aboard ship) - RORO service (roll on/off ship).
Labor and Fuel

37. Major commodities hauled by each mode
1500 tons
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%
Alcoholism in the workplace - Challenges of implementing new technology - Need to increase customer service - Challenges of growing intermodal service
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery

38. Dock receipt
Safety regulations - Evaluating fairness of disputed charged rates - Monitoring profitability of railroads - and Mergers and acquisitions
Bottlenecks - Traffic accidents - Major snowfalls - Projects to improve existing highways
Transfers accountability between domestic and international carrier at the terminal
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery

39. Examples of general freight
Carloads and Ton-miles
Far east to east coast or Europe to west coast - final destination is US port city
Cargo can fit in an enclosed van trailer - Food - consumer staples - manufactured goods
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

40. What are the metrics to measure freight traffic in the motor carrier industry?
A longer combination vehicle towing more than one trailer
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
ton-miles
1500 tons

41. What is an approximate capacity of a hopper?
Break Bulk - Pickup and Delivery - Line Haul - Slip-Seating
100 tons
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.
15

42. Funding the railroads?
Not the government - the railroads themselves
A longer combination vehicle towing more than one trailer
Economies of scope and density
A pumping station

43. UNCTAD liner code 40-40-20
About 25 cents per dollar
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.
30 - 000 lbs and 300 miles
40% each to trade partners & 20% to 3rd world country to develop 3rd world ocean shipping industry - it happened to be inefficient.

44. What are the two primary operational indicators in the railroad industry?
Specialized: $73 Billion - General: $146 Billion
ton-miles
Carloads and Ton-miles
A pumping station

45. What is Amtrak?
11 hours straight or anything beyond 70 hours in 8 days
Crushed stone - gravel and sand
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
Commercial Invoice - Pro-Forma Invoice - Consular Invoice

46. Consolidation
Main penalty is the cost of lost of sales by holding the shipment.
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
One method moves the trailer on its wheels while the other moves the container
Pipeline and Rail

47. Skimming pricing
The competition is intense in both TL and LTL segments
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
90-s
High price for price insensitive customers.

48. Social Responsibility pricing
Substantially higher
High price for price insensitive customers.
Society and customer first.
Moderate

49. Which Mode of Transportation has the highest volume in tonnage?
30%
Completely different continent - different time zones.
Motor/Truck - around 69-70% - Revenue % for Rail: 5.6%
30 - 000 lbs and 300 miles

50. Land Bridge
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
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
Consolidation of shipments to different destinations within the same general area.
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C