Final Exam
What's a content management system?
A computer program that lets you revise and publish Web content yourself instead of having a designer or copywriter do it for you
Which of these should go in a permanent file?
A copy of your insurance policy.
Which of these is an advantage of setting up a corporation?
A corporation continues even if some of its shareholders die or become incapacitated.
Which of these terms means "the care that a reasonable person would take"?
Due diligence.
What does FAK mean to freight brokers and agents?
Freight all kinds.
The federal government forbids brokers and agents from rebating. What is rebating?
Making allowance, discounting, or giving back a portion of the freight bill payment to anyone other than the payer of the freight bill.
What are soft collections?
Making information-gathering or fact-finding calls about missing payments, and asking initial questions regarding payments that you haven't received.
What should your initial goals be when you're negotiating payment terms with the carrier and with the shipper?
Negotiate payment terms of 30 days of receipt of the paperwork with the carrier, and negotiate to receive payment from the shipper within 15 days.
When you're starting out as a broker or agent, how will your rates compare to the rates quoted by a large motor carrier that's working directly with a shipper?
They will be slightly higher.
As you begin your career in the transportation industry, how many top goals should you set for yourself?
Three or four.
When is it okay to share proprietary information about a shipment with a carrier?
When you have a contract in place with that carrier.
When would you use a state-to-state matrix?
When you want to provide general information to a shipper.
According to federal law, how soon should freight bills be paid from a shipper to a broker?
Within 15 days unless otherwise agreed upon by a rule or contract.
Should your broker-shipper agreement include instructions on how to change the contract?
Yes, as long as you and the shipper agree on the wording.
Is it a good idea to include a list of your accessorial fees as an addendum to the broker-shipper contract?
Yes. By doing this, you present all your extra fees up front, and you have proof that the shipper agreed to them.
Does it make sense to list the calls you've made on a tracking sheet?
Yes. Doing this can help you stay organized.
3 When you're just starting out in this business, is it worthwhile to create a profile of your ideal customer?
Yes. If possible, you want to spend your time working with great clients, not good clients.
Do most companies want "just-in-time" deliveries of their goods?
Yes. If the goods arrive just in time, then the receiver doesn't have to set aside storage space for them.
Is it a good idea to use software to compare carriers?
Yes. Software can give you access to information on rates, damages, and shortages
Is it a good idea to look for trucks on load boards even if you aren't posting a load?
Yes. Some carriers post their available equipment and preferred lanes.
Is it a good idea to create a blog for your company?
Yes. You can report news of how the industry is changing or showcase satisfied customers' testimonials.
If there's an insurance claim on a load, should you file that claim on behalf of the shipper?
Yes. You want to provide excellent customer service for your client.
As you develop your business goals, is it a good idea to think about your personal goals as well?
Yes. Your personal goals can motivate you to achieve your business goals.
What benefit can you offer as a broker or agent that larger competitors probably can't provide?
You can oversee every stage of the brokerage process.
What should you do if you set goals for yourself and decide you want or need to change them?
You can revise or delete your goals at any time.
What could happen to you if you place a client's shipment with an unauthorized carrier or a carrier that doesn't have a satisfactory safety record?
You could be sued for negligence.
7 What does it mean if you revoke a contract offer?
You withdraw it.
Let's say that the shipment you're brokering is a short haul. How would that information most likely affect your rate quote?
You'd probably need to quote a higher rate because most carriers dislike short hauls.
Why should you include a W-9 form in your shipper packet?
Your client's accounts payable department will need this information.
Which of these can be part of your collateral package?
Your logo.
Qualities to be a broker
dependability,accuracy, and persuasivness
Shipper
person or company that supplies or own the products being shipped(an consignor)
Sole Proprietorship
simplest business structure one person furnishes all the capital and assumes all liability and responsibility. Has the lowest start up cost
Which of these are parts of a shipper packet?
Accessorial fees list and account application.
Why do some brokers choose to spend time on niche markets?
A broker can offer unique services and therefore make more money.
About how much of your profits should you devote to advertising and marketing?
10%.
What percentage of the freight bill amount that you owe should you pay to a carrier that delivers heavily damaged freight
100%.
Minimun Insurance
100,000 cargo ins and 1,000,000 general liability ins
According to the Hours of Service regulations currently in effect, how many hours in a row can one truck driver drive?
11 hours.
In the logistics business, what's a hot zone?
A city or other area where there's a lot of freight.
What's a corporate identity?
A combination of words, colors, and designs that express your business philosophy.
How long should it typically take to set up a carrier in your system, assuming that the carrier returns all documents quickly?
About 15 to 20 minutes.
Raquel is self-employed. She works for a freight brokerage, but the brokerage doesn't take taxes out of her paycheck. Which of these terms describes Raquel?
A Independent contractor.
What's a vision statement?
A description of what your company wants to be.
What does a carrier mean by "lost miles"?
A distance traveled with an empty truck.
What's a stop charge or stopoff charge?
A fee that a carrier adds if there's more than one delivery point for the shipment.
Which of these jobs requires the job holder to get a broker surety bond?
A freight broker.
Which of these organizations is likely to send you a bid package?
A large shipper.
What is a bill of lading?
A legal document that travels with the shipment and describes exactly what is in the shipment.
What's a closing ratio?
A measurement of how many calls you have to make for each new client you acquire.
Which of these can sometimes solve a claim instantly?
A photograph that includes a time stamp and a date stamp
Which of these is a "bill to" situation?
A separate company pays the shipper or receiver's freight bills in exchange for a fee.
What's a lumper fee?
A surcharge if the carrier has to pay out of pocket to get someone to unload the truck.
What's an "out of service" period?
A time when the government discovered that a driver violated rules related to the maximum number of hours in a row that he or she can drive.
Who should help you create your broker-carrier contract?
A transportation attorney.
Which of these is the correct term for a form that the shipper fills out so you can run a credit report?
Account application or credit application.
What should you do for each top goal that you set?
Add details about it, break it into steps, and estimate the time you'll need to complete each step
What's the difference between advertising and marketing?
Advertising is just one part of marketing.
When you're processing a contract from a carrier, at what point should you perform your due diligence?
After you receive the signed and dated contract and supporting paperwork from the carrier.
Which of these steps do you need to complete before you secure a carrier for a load?
All of these.
What's the best way to file your carrier packets?
Alphabetically by carrier name
What is a "save me" load?
An emergency move that a potential customer calls you about at the last minute.
What is a roadability review?
An on-site examination to make sure that equipment providers are following safety regulations.
Which of these is the best way to find out what a shipper normally pays for a particular load?
Ask the shipper to show you competitors' freight bills.
7 How can you get your own motor carrier number?
B File form OP-1 with the FMCSA.
What's a company snapshot?
B Information from the federal government about a specific motor carrier.
According to the federal government, who is responsible for creating and keeping accident registers that include copies of accident reports?
B The carrier.
4 When should you charge for spotted trailers?
B When the shipper isn't bringing you enough business to make a free drop worthwhile.
When you create your broker-carrier contract, it's a good idea to include specific language that forbids which of these?
Back-solicitation.
At what point do you need the W-9 form returned to you from the motor carrier?
Before you issue your first payment to the carrier.
As you develop your advertising and marketing plan, which of these should be your main focus?
Benefits.
Which of these is another name for corporate identity?
Brand.
How do Hours of Service regulations affect brokers and agents?
Brokers and agents may have to increase the time estimates they give to shippers.
Why do shippers use brokers?
Brokers save shippers money and provide expertise.
Which of these are examples of flatbed freight?
Building materials, pipe, and fabricated metals.
If you become a broker agent, how will you most likely get your transportation management software?
By tying in remotely using the TMS of the broker you're working with.
Which part of this statement is false? "A freight broker sells transportation to a shipper, makes arrangements for the shipment, and transports the shipment
C The freight broker doesn't transport the shipment.
What's the first thing you should do if you find out that a shipment never arrived?
Call your client.
29 You want the truck driver to call you each day at a specific time to let you know her location and whether she is having any problems. What do people in the transportation industry call this procedure?
Check call.
How can you establish your credibility with a potential customer?
Check details carefully, ask intelligent questions, and listen closely to the person's answers.
2 Which of these choices is a good tip to use in deciding on your business name
Choose a name that's easy to spell and pronounce.
2 Which National Motor Freight Classification code is for the lowest-cost freight to ship?
Class 50.
Which of these terms means "a specific part of the contract that describes a rule or a consequence"?
Clause.
When you're researching shippers, which of these types should you focus on?
Companies that ship frequently and that ship large products.
Which of these terms applies if a consignee accepts a shipment but doesn't bother to inspect it?
Concealed damage.
Which of these means "a company that transports goods under an agreement with a limited number of shippers"?
Contract carrier.
Let's say you send the shipper your broker-shipper contract, and the shipper sends it back, unsigned, with some suggested changes. What do lawyers call this?
Counteroffer.
Which of these should you do (if possible) before negotiating with a potential client?
Decide which factors or price points are deal breakers (things that would make you walk away from the negotiating table). B Write down your expectations. C Think about what your potential client may want from this negotiation.
In 1980, the Motor Carrier Act began what in the transportation industry
Deregulation.
What is dimensional pricing?
Determining a less-than-truckload shipping rate by the amount of space the freight takes up rather than by NMFC freight class.
If you're posting a load on the Internet, how much information should you provide on the rate?
Don't specify the rate. If you leave the rate open, more carriers will call you.
Carrier
Person or company that undertaker tosend goods by rail, sea, air, waterway or a combination of these.
Which type of insurance would most likely cover you if you or one of your employees fails to check a load's value ahead of time?
Errors and omissions insurance.
How often should you process the invoices in your mail to go out to your shippers?
Every business day.
9 A freight broker must meet the legal requirements outlined by which organization?
FMCSA, a division of the Department of Transportation.
What should you do if you're filing a small claim that's below your carrier's deductible?
File it directly with the carrier's claim department.
Sometimes a broker or agent wastes valuable time talking on the phone about shipping services with an employee who has no decision-making authority. How can you prevent this from happening to you?
Find out who pays the freight bills at that company, and ask the person you are talking with early on in the conversation if he or she is the one who makes the decisions regarding the routing of the freight.
What's a process agent?
Someone who can receive legal papers for you in case someone sues you.
What should you do if a carrier says that its home state doesn't require workers' compensation insurance?
Get a written statement from the carrier to this effect, have the carrier's official representative sign and date it, and keep it on file
What's the most important thing to remember when you're generating a rate quote?
Get accurate information about the shipment from the customer the first time.
Which of these is the last step in the sales process?
Go back to Step 1.
Testimonials are more effective if they are which of these?
Specific.
In which of these situations is contingency cargo insurance valuable?
If a carrier's primary cargo insurer goes out of business.
Why is it important to have an organized filing system?
If shippers, carriers, or consignees find out that your recordkeeping is sloppy, they may not want to do business with you.
Why is it important for your broker-shipper contract to state that you're a property broker?
If the carrier does something wrong, you don't want a court to decide that you and the carrier are equally liable.
Which of these might happen if you place a client's shipment with an unauthorized carrier?
If the carrier turns out to be unsafe, a court could find you legally responsible for damages.
If the federal government sends a notice downgrading a motor carrier's safety rating, when does that notice take effect?
In 45 days (for carriers of hazardous materials) or 60 days (for all other carriers).
Where should you spell out how you, the carrier, and the shipper will communicate?
In the broker-carrier contract.
Let's say that your shipper refuses to sign your broker-shipper contract. Which of these is the best way to protect yourself?
Include your terms and conditions in the credit application, rate confirmation sheet, invoice, or all three.
Which of these means "calls that you make to establish contact with potential customers and find out whether you'd want to work with them"?
Initial contact calls.
How did deregulation change the transportation industry?
It allowed many more people to become freight brokers.
Why is the account application one of the most important items in the shipper packet?
It allows you to run a credit report on the shipper and figure out what credit limits to extend.
Which of these will be most important to your typical client?
It depends. Each client has different needs and priorities.
Why is it important to state in the broker-carrier contract that you and the carrier are independent entities?
It has to be clear that the drivers that the carrier hires aren't your employees.
Which of these statements is true of a standard shipper-carrier contract?
It says that you're a motor carrier, you'll carry the freight under your authority, and you'll carry the primary cargo insurance.
How long should the cover letter in your shipper packet be?
It should fit onto one page and be easy to read.
What should your broker-carrier contract say about rates?
It should state that rates can change.
Which of these statements about less-than-truckload freight is true?
It's more likely than full-truckload freight to get damaged during the trip.
Is negotiating a talent or a skill?
It's partly a talent but mostly a skill. It's possible to learn negotiation and to teach it to others.
For most brokers and agents, which part of the sales process is the most difficult?
Landing that first customer.
Which of these describes a situation where there are many trucks and few shipments in a certain area of the country?
Low demand.
What does it mean to audit a freight bill?
Make sure that it's for the correct shipment and that the charges are accurate.
What should you do if you know that the driver will need lumpers to unload a specific shipment?
Make sure that the driver gets a receipt from the lumpers and that the shipper agrees to pay for that charge.
Is it a good idea to use a model broker-shipper contract instead of hiring a lawyer to create your own?
No. A model contract may not address issues related to your state, the types of business you're seeking, or recent changes in laws and regulations.
Which of these is an effective way to improve your relationships with shippers?
Offer incentives to carriers.
As a broker or agent, how can you compete with large motor carriers who quote rates directly to your potential customers?
Offer superb customer service.
Brent is a freight broker working with a new client. The client said the load was delivered satisfactorily, but the client's bill is two weeks past due. How often do we recommend that Brent call the client to politely ask when payment will arrive?
Once or twice per week.
What are preliminary prospects?
Potential customers who may or may not be right for you.
Edward is a freight broker. He wants to hire someone to be his legal point of contact for each state in which he does business. What is this person called?
Process agent.
Which of these niche markets should you probably avoid?
Produce.
You'd subtract your costs from your revenue to find which of these?
Profit margin.
What's the legal name for a freight broker?
Property broker.
When you first speak with a carrier about a particular load, how much information should you give?
Provide general information: the closest large pickup city, the destination city, and the weight of the shipment.
For which of these tasks does the freight broker earn a fee?
Providing services as an intermediary.
Ben is making his 50 calls a day when, during call 10, he talks with someone he has a lot in common with. What should he do?
Spend more time on that call than on many of the others he makes that day.
Who is to blame if the driver arrives at the delivery point and finds out that deliveries are by appointment only, and there's no appointment for this load?
The broker or agent.
Which of these niche markets should you probably avoid because it often results in damage claims that are difficult to prove or disprove?
Rebuilt or reconditioned products.
How can a natural disaster affect the logistics business?
Refrigerated trucks may be in high demand.
Which of these should you do while listening actively?
Repeat what the speaker said in your own words.
Which of these is a sensible way to continue to do business with a company that has open late invoices with you?
Require that shipments be prepaid until the late invoices are paid off, or present the option that they can deliver or overnight a check to you to bring their account current (or pay by credit card if your brokerage is set up to take card payments).
What should you do if you make 50 calls per day for four months and you still aren't building up connections with potential clients?
Rethink the way you're making calls and the businesses you're calling.
ACT is an example of what?
Sales database management software.
Which of these ratings can the federal government give to a motor carrier?
Satisfactory, conditional, or unsatisfactory.
Which of these terms means "figuring out how to design your site and your content so that your website ranks highly on Google, Bing, and similar sites"?
Search engine optimization.
Why is it a good idea to ask each of your shippers to create its own bill of lading form?
So it will be uniform for all their shipments, and there won't be any surprises in the fine print
5 When you become a broker or broker agent, you become part of which of these?
Supply chain.
Which of these terms means "a whole system of people, organizations, and equipment that moves products from seller to buyer"?
Supply chain.
Which of these terms means "the companies that will be most likely to use your services"?
Target market.
Which of these terms means "a statement from a happy customer, explaining exactly why he or she is pleased with the work you did"?
Testimonial.
Which of these must you include on every rate information sheet you send out?
That day's date.
What is due diligence?
The care a reasonable person would take.
Why is it important to keep the details of the shipment confidential until after the carrier signs and returns the broker-carrier contract?
The carrier could go directly to the shipper and cut you out of the process.
What are the two most important qualities that a broker should look for in choosing a carrier?
The carrier has a valid motor carrier license and proper insurance to protect the shipper.
Who is responsible for and liable for any personal injury or damage to vehicles or equipment that happens while the freight is in the carrier's possession?
The carrier.
When should you post a load?
The earlier you post, the better.
What does it mean if an insurance policy has an aggregate limit of $1 million?
The most the insurer will pay on that policy is a million dollars during the length of that policy (usually a year).
What happens if the shipper states an incorrect class on a less-than-truckload shipment?
The motor carrier may reclassify the shipment, which would mean the shipper would have to pay a higher price than the original rate quote.
Who is responsible for buying cargo insurance?
The motor carrier.
What is a consignee?
The person responsible for receiving the shipment.
Why does reconditioned freight cause so many headaches for freight brokers and agents?
The products could be damaged before they even go on the truck, and the broker or agent doesn't usually inspect the freight ahead of time.
What is cash flow?
The total amount of money that your business generates plus the total amount that it uses up
Which of these generally makes a contract invalid?
There's no description of what is being exchanged.
Which of these statements is true of full-truckload shipments?
They are normally rated by the mile.
Which of these are legal requirements that a freight broker has to meet?
They must meet the standards of the Federal Motor Carrier Safety Administration and have cash reserves or financial backing.
What does it mean to deadhead?
To drive a truck back empty.
Why does the carrier need to know the value of the load?
To make sure it has enough insurance coverage.
Why is it worthwhile to create a mission statement?
To motivate you, your employees (if you have them), and potential clients.
Which of these terms means "to legally prevent other businesses from using a business name that's the same as yours"?
Trademark.
What does it mean to give back a load?
Turn it down because you can't find the right truck.
What is co-brokering
When you agree with a client to broker a shipment, and then you give that load to another licensed freight broker to help you arrange the shipment.
What should your broker-shipper agreement say about the number of shipments you will broker for the client?
Use language that allows the shipper to entrust you with one shipments or many shipments.
What is reconditioned freight?
Used or rebuilt items.
What is blocking and bracing?
Using plastic, wooden, or metal bars to keep the cargo from moving around too much.
6 What does it mean to carry the receivables?
When a payment is due to the carrier before the money comes from the shipper, you need to have enough funds on hand to pay the carrier.
A freight broker agent must have a contract with what type of person or organization?
A licensed and bonded broker or brokerage firm.
What is air freight alternative?
A niche market that offers an over-the-road substitute for companies that use a lot of air-freight shipping.
Brianna is establishing her own freight brokerage. She has two partners who will invest money in the business, but they won't manage it with her. What's the correct name for this type of business?
Limited partnership.
Which type of software allows you to communicate with potential carriers about shipments that you've been hired to broker?
Load posting software.
Which of these terms means "controlling the flow and storage of goods from origin point to destination"?
Logistics
How often should the motor carrier communicate directly with the shipper
Never. All communication should go through you.The ONLY exception should be in the case of an extreme emergency situation, such as a situation in which the shipper is completely unable to reach you (the broker/agent), and needs information such as where the shipment is.
Which of these might you include in a vision statement?
New specialties or markets that you want to explore.
Is it a good idea to have your spouse, mentor, or business coach help you review your list of goals?
Yes. Reviewing your goals with someone you trust can help you make them clearer and more specific.
Is it a good idea to visualize your goals?
Yes. Visualizing can boost your mood and carry you through the tough times.
Which of these is an appropriate penalty for back-solicitation?
You have the right to ask a judge for a restraining order or injunction.
Which of these is the first step in processing a broker-carrier contract?
You receive the signed and dated contract and the required paperwork from the carrier.
5 At what point should your goals be fixed and unchangeable?
You should always be able to change your goals
3 What name may you want to use for your company that's different from its legal name?
Your Web or domain name.
In which of these situations would it be appropriate to co-broker a shipment?
Your co-broker has specialized equipment or resources that you don't have.
Where does a broker load reference number come from?
Your transportation software.
How many goals should you have on your top goals list?
Three to four (and make sure that at least two are business goals).
2 How long does the federal government require you to keep records of your brokerage transactions?
Three years.
According to section 371.2 of the FMCSA Department of Transportation Laws and Requirements, for how long must a broker keep a record of each brokerage transaction
Three years.
In government regulations, what does the term "purpose and scope" mean?
Why the rules exist and which people and organizations must obey them.
You tell a driver that she needs to phone you at a certain time every day until she delivers the cargo. What name do brokers and agents give to this communication?
Check call.
Which of these should you do before tendering your first load to a carrier?
Check the carrier's safety rating and start a new file for that carrier.
How much money will you need to provide the surety bond company to get a surety bond of $75,000?
It will depend on your credit rating.
What's a property broker?
It's another name for a freight broker.
4 When you choose your Web or domain name, which of these tips should you follow?
Keep it simple and easy to remember, and try to make it 15 letters or less.
If you've failed to reach a certain goal in the past, should you add that goal to your list of top goals?
Yes, if you take the time to think about why you failed before and what you will do differently in the future.
When should you include an automatic renewal clause in a contract?
When you've worked with a carrier before and have gotten excellent service from them.
What's the advantage of sending a full-color brochure by email rather than mailing or handing out a paper copy?
It's less expensive.
In which type of business does one person furnish all of the capital and personally assume all of the liability, and all of the profits go to the owner?
Sole proprietor.
Which of these is a common deductible on a motor carrier's insurance certificate?
$1,500 or less.
How long should your master list of goals be?
As long as you want it to be.
Damien is a freight broker. But to give clients more confidence in him, he claims that he owns a fleet of trucks too, even though he owns no trucks. Damien could face a lawsuit for which of these?
Misrepresentation.
Why do brokers try to fill backhauls when possible?
A full backhaul means more money.A backhaul is the return trip a truck makes after delivery. If that trip includes cargo, the carrier and the agent make more money than they would by sending an empty truck.
As you begin to set business and personal goals, how many goals should you include on your master list?
As many as you want.
How can you choose a freight class for a less-than-truckload shipment?
Ask the manufacturer or shipper. Most companies know which freight code their product is in.
In general, how large does a consolidated shipment have to be to make it cheapest to ship as a full truckload rather than sending it through smaller less-than-truckload shipments?
At least one-third of a truckload or 10,000 pounds.
Which type of shipment is usually most profitable?
Full-truckload shipments.
Your shipment has been delivered! How soon do we recommend that you call the consignee?
Within an hour of the driver's checking in with you.
Which of these types of insurance replaces lost wages if a driver gets hurt on the job?
Workers' compensation.
Can you ask a driver to work as dock labor?
Yes, if you discuss it in advance and arrange for payment.
How can you tell whether an authority granted by the FMCSA belongs to a freight broker or a motor carrier?
A broker MC number has a lowercase "b" at the end.
Which of these terms means "a service business that connects shippers that need to transport their goods with authorized motor carriers that want to provide transportation services"?
Freight brokerage.
