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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. Terms of Payment
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
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
Used for tax - manning - and relaxed regulation.
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car

2. On the average - per gallon of fuel - US railroads move a ton of freight...
Economies of scope and density
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.
484
NTSB

3. Land Bridge Services
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.
To save the railroads by giving them a chance to compete with other modes on equal footing
Intermodal in character
1850-1950

4. Freight Revenue for Rail (per ton-mile)
Coal
About 2 cents per dollar
Cargo can fit in an enclosed van trailer - Food - consumer staples - manufactured goods
ton-miles

5. Intermodal Transportation
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.
Break bulk - Relay - Pick up - Delivery
Transfers accountability between domestic and international carrier at the terminal
Break Bulk - Pickup and Delivery - Line Haul - Slip-Seating

6. What companies are players in private carriage?
BNSF - CSX Transportation - Kansas City Southern Railway - Grand Truck Corporation - Norfolk Southern - Union Pacific Railroad - Soo Line Railroad
One method moves the trailer on its wheels while the other moves the container
Moving to neighboring country - NAFTA - because the places may have close cultural affinity.
Sysco - Tyson Foods - Coca-Cola - and Walmart

7. Invoices
Commercial Invoice - Pro-Forma Invoice - Consular Invoice
Transfer of function to another country - can stay within the same company!
Special Rates
Water

8. What are the metrics to measure freight traffic in the motor carrier industry?
Coal
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.
ton-miles

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

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10. Certificate of Inspection
Attests to authenticity and accuracy of the goods. Performs by third party independent company
58
Break bulk - Container service - LASH service (lighter aboard ship) - RORO service (roll on/off ship).
Terminal

11. Pricing adjustment conditions
Discounts: reduction from published price. Volume: TL vs LTL - Seasonal - Cash 2/10 net 30 - Geographical- FOB origin/destination - Uniform delivered pricing: zone pricing.
Motor: HH Goods - Heavy Machinery - Petroleum Products - Dump Trucking - Ag Commodities - Motor Vehicles - Retail Store Delivery
Yes
Fixed Costs: 30% - Semi-Variable Costs: 40% - Variable Costs: Labor and Gas

12. Which type of a railcar has the highest share in terms of its numbers in service in the US?
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.
Covered Hopper
7%
Water (Barge Ships) at 0.72 per ton mile. The second lowest is Rail at 2.24 cents per ton mile.

13. Categories of major pricing decisions
Highway user taxes
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 number of unions and the degree of their involvement in operations and labor management contributes to inefficiencies of the railroads
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.

14. What is the difference between class 1 and class 2 carriers?
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
Special Rates
(Trucking) Class 1: income > $10M - Class 2: $3M<income<$10M

15. Types and shares of cost in railroads
Commercial Invoice - Pro-Forma Invoice - Consular Invoice
83.8%
Fixed Costs: 30% - Semi-Variable Costs: 40% - Variable Costs: Labor and Gas
Substantially higher

16. Main forms of Charter Ships
Declaration of where product was made so that appropriate duties are charged
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
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues
7%

17. What is an approximate capacity of a hopper?
100 tons
Alcoholism in the workplace - Challenges of implementing new technology - Need to increase customer service - Challenges of growing intermodal service
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
One method moves the trailer on its wheels while the other moves the container

18. Which US federal government agency enforces safety regulations for railroads?
Specialized: $73 Billion - General: $146 Billion
Less than 25 carriers handle 75 to 80% of total freight dollar.
Fixed Costs: 30% - Semi-Variable Costs: 40% - Variable Costs: Labor and Gas
Federal Railroad Administration (FRA)

19. Consular Invoice

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20. Name the types of trucking terminals
Intermodal in character
Break bulk - Relay - Pick up - Delivery
About 2 cents per dollar
250 - 000

21. How does the US railroad industry compete with other modes?
The intermodal competition has increased dramatically since WW 2
Intermodal in character
Special Rates
Not an invoice but a quote. must be carefully written to avoid discrepancies w/ L of C

22. Consolidation
30 - 000 lbs and 300 miles
Cash in advance - Letter of Credit - Documentary collection - Open account - TradeCard
Main penalty is the cost of lost of sales by holding the shipment.
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%

23. What are the highest variable costs in the railroad industry?
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues
Labor and Fuel
30%
Consolidate orders for several customers and stop along the way for partial unloading.

24. What are the types of railcars?
Far east to east coast or Europe to west coast - final destination is US port city
Market Forces (customers) - Governmental Controls - Other channel member - Competition.
7%
Boxcar - Hopper Car - Covered Hopper - Flatcar - Gondola - Tank Car

25. Drayage
Increased use of technology - Gradual increase in the number of smaller railroads - Increase in intermodal shipments - Sharp growth in fuel efficiency of locomotives
FedEx - YRC - Conway - UPS - ABF
Pricing according to cost incurred to serve - Customer covers all costs - seller sets prices to maximize profits.
The pickup and delivery of trailers and containers in conjunction with a line-haul rail movement

26. In terms of tonnage moved by the whole US transportation - the share of railroads is close to this rounded number...
Truck safety requirements - Driver hours of service - User fee charges - Reduction of pollution from trucks
15%~13%
Transfers accountability between domestic and international carrier at the terminal
Completely different continent - different time zones.

27. What are the current trends in the US railroad?
Act as a consolidator and domestic freight forwarder - inbound/outbound container arrangement
1850-1950
Increased use of technology - Gradual increase in the number of smaller railroads - Increase in intermodal shipments - Sharp growth in fuel efficiency of locomotives
anywhere between a quarter and a third of all highway travel

28. Which economies are most prominent in the trucking industry?
One method moves the trailer on its wheels while the other moves the container
A trucking operation that only hauls freight for the firm which owns it
Economies of scope and density
15

29. What was the golden age of railroads?
Intermodal in character
About 25 cents per dollar
An agreement whereby one railroad pays another for the right to operate its trains over the second carrier's track
1850-1950

30. Third Party Logistics
Attests to authenticity and accuracy of the goods. Performs by third party independent company
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...
(Trucking) Class 1: income > $10M - Class 2: $3M<income<$10M
58

31. Funding the railroads?
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
Not the government - the railroads themselves
Accessibility - Speed - Universal Connector - Reliability - Frequency - Lower Loss and Damage Rates - Lower Inventory levels due to smaller shipments than other modes
15

32. How are airport hub/spoke and LTL breakbulk similar?
Odd numbers: North to South highways - increase from west to east - Even numbers: East to West highways - increase from south to north
40% each to trade partners & 20% to 3rd world country to develop 3rd world ocean shipping industry - it happened to be inefficient.
An agreement whereby one railroad pays another for the right to operate its trains over the second carrier's track
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.

33. Survival Based pricing
Is likely to stay and even get worse in the future
Covering variable costs - volume and equipment utilization - and cash flow.
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...
Break bulk - Container service - LASH service (lighter aboard ship) - RORO service (roll on/off ship).

34. Benefits of hub and spoke system
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.
The competition is intense in both TL and LTL segments
Maximize the utilization of equipment - increase the efficiency of equipment operations - save transit time and operational costs.
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

35. Price variation factors in airline service
11 hours straight or anything beyond 70 hours in 8 days
Odd numbers: North to South highways - increase from west to east - Even numbers: East to West highways - increase from south to north
Service levels - Frequent flyer programs - Timing of flights - In advance registration
Carloads and Ton-miles

36. Dock receipt
Transfer of function to another country - can stay within the same company!
Coastal/Intercoastal - Great Lakes - Internal
Yes
Transfers accountability between domestic and international carrier at the terminal

37. Four types of Liner Service
Few carriers handle more than 25% of total shipment - service disruptions problems if cease operation.
30 - 000 lbs and 300 miles
Break bulk - Container service - LASH service (lighter aboard ship) - RORO service (roll on/off ship).
Transfers accountability between domestic and international carrier at the terminal

38. Which type of railroad cargo has the highest tonnage share in the US?
Safety regulations - Evaluating fairness of disputed charged rates - Monitoring profitability of railroads - and Mergers and acquisitions
Labor and Fuel
Wyoming
Coal

39. What do the users of truck service benefit?
(Trucking) Class 1: income > $10M - Class 2: $3M<income<$10M
Accessibility - Speed - Universal Connector - Reliability - Frequency - Lower Loss and Damage Rates - Lower Inventory levels due to smaller shipments than other modes
Break bulk - Relay - Pick up - Delivery
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

40. _____ mode is ideal for moving electronics - expensive items - flowers - or time sensitive materials such as organs
Motor/Truck - around 69-70% - Revenue % for Rail: 5.6%
7
After World War 2
Air

41. A barge tow is capable of moving how many barges?
Maximize the utilization of equipment - increase the efficiency of equipment operations - save transit time and operational costs.
15
Few carriers handle more than 25% of total shipment - service disruptions problems if cease operation.
One method moves the trailer on its wheels while the other moves the container

42. What factors lead to reduction of air pollution by trucks?
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
Use of low-sulfur diesel fuel - Use of biodiesel fuel - Cutting down on idling - Reducing traffic congestion
Bottlenecks - Traffic accidents - Major snowfalls - Projects to improve existing highways
83.8%

43. Labor relations in the US railroad industry?
Carloads and Ton-miles
Yes
30 - 000 lbs and 300 miles
The number of unions and the degree of their involvement in operations and labor management contributes to inefficiencies of the railroads

44. Freight revenue for Modes (per ton-mile)
Air carrier: highest at 80.4% - Truck: 26.6% - Rail:2.24% - Barge Ship: .72% - Oil Pipeline: 1.47%
Coal - farm products - chemicals - transportation equipment
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.
Highway user taxes

45. Trackage

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46. The status of competition within the US railroad industry?
An agreement whereby one railroad pays another for the right to operate its trains over the second carrier's track
The closer the operating ratio is to 100 - the more indicative of the possible need to raise rates to increase total revenues
The pickup and delivery of trailers and containers in conjunction with a line-haul rail movement
Moderate

47. LTL terminals are used for connections with these operations...
563
The development of the highway system - Limited access points - Long transit times - Safety of cargo during transit
Moderate
Break Bulk - Pickup and Delivery - Line Haul - Slip-Seating

48. Major commodities hauled by each mode
Labor and Fuel
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.
Water

49. Far-shoring
Completely different continent - different time zones.
Consolidate orders for several customers and stop along the way for partial unloading.
To save the railroads by giving them a chance to compete with other modes on equal footing
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

50. What could be the rationale for railroad mergers?

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