Transportation and Distribution Mgmt Exam 2

Containers that are set onto something that can haul them, unlike the trailer don't have any wheels

(COFC) Container on Flatcar

Has wheels that you can set onto railroad and can also be lifted off and continue its journey

(TOFC) Trailer on Flatcar

Speed and travel time can be offset by:

*Flight frequency and timing* (Smaller communities have experienced reduced frequencies) *In-direct routing due to hub and spoke networks* (Legacy majors moved to hub and spoke networks following deregulation to improve load-factors) *Air traffic and ground congestion getting to and from airports* (Most relevant at major airports Adds uncertainty to travel time)

Current issues in air

*Safety*: air has lowest accident rates Airport security and threat of terrorism Substance abuse

Current issues in air

*Technology*:Speed demands sophisticated equipment Automated information processing Air Cargo Fast Flow Program Paperless, speeds processing through customs Improves shipment tracking Improves communication between connecting carriers

Due to the stagger act, rail freight/revenue declined ___%

27

Train accidents are down ___% from 1980

60

Generally reliable, except when weather and congestion disrupt schedules Limited airport accessibility adds travel time and cost

Air accessability

vary by seating capacity, cargo payload, speed, fuel, operating costs/hour Match characteristics to demand needs of route

Air craft types

Generally travels with the shipment - documents arrive at customs at the same time as the freight.

Air freight documentation

Focused on building larger planes

Airbus

Current issues facing rail

Alcohol and drug abuse( long hours)(created employee assistance programs) Raile more energy efficient than truck (less environmental impact) Technology (smart equipment) Future of smaller railroads ( more customizable and accessible to people) Customer service Drayage for intermodal service

Airplane is configured to carry only freight

All Cargo carriers

For hire carrier Primarily transport cargo Freely set the rates Enter and exit markets Use any size aircraft dictated by the market EX: FedEx ,UPS airlines

All cargo carriers

Focused on building smaller, faster airplanes

Boeing

standardized roof freight car with sliding doors on the side, can be a specialized boxcar made for especiales merchandise like auto parts

Boxcar

Basic unit of measure

Carload

For hire carrier " Air Taxis" use small to medium sized aircraft to transport people or freight no time schedule or designated route

Charter carriers

operating revenue of at least 346.8 million

Class 1

Regional (linehaul of at least 350 miles of revenue between $40 million and the class 1 threshold)

Class 2

Local Line Haul ( less than 350 miles and revenue less than $40 million per year)

Class 3

Types of merchandise carried by rail

Coal Grains Chemicals Transportation Equipment

For hire carrier Regional carriers that connect less populated routes with major cities Publish a timetable on specific routes

Commuter air carriers

In which ways do airlines compete for passengers?

Compete based on service (frequency and timing of routes, amenities:wifi, less employees which results in lower cost)

hopper car with a roof designed to transport bulk commodities that need protection from the elements

Covered Hopper car

Advantages of intermodal service

Decrease in train accidents Lower transit times More accessible to people Combining railroad long haul with the accessibility of truck service Lower cost than truck

BNSF railway Canadian national railway Canadian Pacific railway CXF transportation Kansas city southern railway Norfolk southern Union pacific railroad

Different types of railroads

Lighter cargo may be assessed on the basis of

Dimension

A flight between two points non stop

Direct service

Used for international trade & PIggy back service

Double stack trailers

Falling average costs ($/ton) as scale or capacity increase, assuming capacity utilized

Economies of Scale

Falling average cost as volume carried increases, assuming capacity remains constant

Economies of density or utilization

Cost per flight-hour higher for large planes Cost per seat-mile lower for large planes (EOS) For any given plane size, low marginal cost to fill empty seats (EOD)

Economies of scale Economies of density

Different railroads that serve different cities created to provide more effective competition

End to End merger

True or False: air freight documentation generally does not travel with the shipment. It must arrive at customs before the freight arrives.

False

True or False: there is a low percentage of fixed costs in the short run because the railroads do not own and maintain their own networks and terminals.

False

if the shipper or receiver does not own citings, another mode of transportation is required to come in and complete that shipment

Fixed rights of way

Freight car with no top or sides

Flat car

Most of revenues earned by small no. of majors

For Hire carrier

Provides service to the public and charges a fee Cannot easily be characterized into specific types because the carriers provide many different types of services

For hire carrier

Passenger revenue/ revenue passenger miles

Formula for passenger yields

This rate depends on characteristics of the cargo

General commodity rates

not top, flat bottom fixed sizes used for hauling bulk commodities

Gondola

A freight car with the floor sloping to one or more hinged doors used to discharge the bulk materials, not lid or top on it ex:hauls coal

Gravity Discharge Hopper Car

Railroads have a _____ percentage of indirect fixed costs in the short run

High

Air cost structure

High variable costs (about 80% of total) About 30% attributable to flight operations About 12% for maintenance About 17% for aircraft and traffic servicing Low fixed costs (Due to government investment in terminals and operating infrastructure) Increasing non-labor costs increase pressure to reduce labor costs, increase productivity

A ______ is a central airport that flights are routed through, and _______ are the routes that planes take out of the hub airport. Most major airlines have multiple hubs.

Hub and Spoke system

Cargo competition is ______

Intense Carriers are trying to eliminate excess capacity

Involving two or more different modes of transportation in conveying goods

Intermodal

Very limited _____________ competition over long distances (500+ miles) Freight: increasing competition from time-definite motor carrier service Passengers: some competition from personal automobile travel, rail, and bus

Intermodal

For hire carrier Operate between continents

International

Intense __________ competition Cycles of new entrants, excess capacity, reduced fares, market exits

Intramodal

Between railroads Not easy to enter the industry because you have to have a lot of different cars and terminals Can be cheaper since they haul long distance Differentiated oligopoly, few places served by multiple railroads Large financial barriers to entry on a large scale

Intramodel

33% of each revenue dollar

Labor costs

(#Passengers/#Seats) x 100

Load factor

Revenue of greater than 1 billion (American, Delta, United)

Majors

100 million - 100 billion (operate between less populated areas, the feed people to the majors)

Nationals

A measure of the average yield paid per mile per passenger

Passenger yields

Carry passengers and freight Freight is carried in the belly of the aircraft

Passenger-cargo " Combi" Carriers

Truck and rail together is called

Piggy Back service

Higher than general rates for reserved space on flights EX: shipping organs quickly

Priority Reserved (Time Definite) Rates

Over 500 corporations own/operate aircraft

Private carrier

Revenue of less than 100 million (operate within a particular region of the country)

Regionals

locomotives, carriages, wagons, or other vehicles used on a railroad.

Rolling stock

shipment across the company may require several different railroads to handle the merchandise, different railroads own different portions of the country.

Service limitations

Railroads that serve the same market strengthen the financial positions of many railroads

Side by side combinations

larger carrying capacity, few size or weight constraints handle almost any type of cargo assumption of liability for damage- because it's not a smooth ride intermodal services and other new technologies a public benefit from rail: reduced road congestion and road damage

Strengths of railroad

Used for transport of liquid and gases

Tank Car

Airports financed by government Federal construction assistance programs State and local gov'ts operate and maintain Air carriers and users pay for use

Terminals

What is the future for aircrafts flying international routes

They are creating larger planes

True or False: In the US private investors own main railways and many local railways that provide freight services. In the rest of the world government owns rail infrastructure in most cases.

True

Specialized, one commodity trains Direct origin to destination movement Priority service schedules

Unit Trains

Denser cargo may be assessed on the basis of____________

Weight

Factors shippers consider

Weight/size of shipment? Time sensitivity (Is same-day service required?) Control required over shipment? How important is cost? What carriers serve the route? Is there non-stop service? How fragile/perishable is the shipment? Are specialized freight forwarder services required? Is the shipment hazmat?

Which scenarios is demand for air cargo stronger?

When shipment requirements are an emergency When products shipped are typical commodities (mail, fashion clothing, jewelry) When demand for the product is high and we need it immediately

why do airlines have low fixed costs? a) due to government investment in terminals and operating infrastructure b) due to the airlines having few employees to run the airlines c) flight operations and maintenance are easily controlled d) there are a variety of positions that employees can move between such as maintenance, ground crew, and administrative tasks.

a) due to government investment in terminals and operating infrastructure

the pick up and delivery of trailers and containers in conjunction with a line-haul rail movement is referred to as _______. a) local drayage b) smart equipment c) class I railroads d) intermodal service

a) local drayage

which of the following is true in regards to air shipments. a) normally small shipments that are time sensitive are moved by air carriers b) adding freight to passenger flights necessitates rather large size shipments c) packaging is usually significantly more for air freight than for other modes d) it is one of the most unreliable modes of transportation

a) normally small shipments that are time sensitive are moved by air carriers

a firm that transports company personnel or freight in planes to support its primary business is a a) private carrier b) for hire carrier c) international carrier d) cargo carrier

a) private carrier

which of the following is NOT a current issue in the railroad industry? a) smart locomotives have onboard computers that can identify mechanical problems b) rail is less efficient than trucks c) alcohol and drug abuse are a problem d) RFID tags are used to track equipment and shipments

b) Rail is less efficient than trucks

what type of carrier uses small to medium size aircraft to transport people or freight. there is no time schedule or designated route a) all cargo carriers b) charter carriers c) combi carriers d) commuter air carriers

b) charter carriers

when speaking about service limitations, which of the following is correct? a) assumption of liability of damage b) shipment across the country may require several different railroads handle merchandise. c) almost any type of cargo can be handled d) intermodal service is a strength of railroads

b) shipment across the country may require several different railroads handle merchandise

Air freight rates depend on

both Weight and Volume

FedEx is an example of a ______ carrier. a) passenger-cargo combination b) major c) express and all cargo d) all airplane

c) Express and All Cargo

a freight car with the floor sloping to one or more hinged doors used for discharging bulk materials is: a) gondola b) boxcar c) hopper car d) flatcar

c) hopper car

midwest is an example of what type of for hire carrier? a) major b) regional c) national d) international

c) national

the operating ratio is calculated by: a) operating income divided by operating expenses b) the number of passengers divided by the number of seats c) operating expenses divided by operating income d) the number of seats divided by the number of passengers

c) operating expenses divided by operating income X 100

A _________will pick freight up at the airport and use attached documents to clear freight through customs.

customs broker house

which of the following is NOT one of the principal commodities hauled by the railroads? a) coal b) farm products c) chemicals d) all of the options are principal commodities

d) All of the options are principal commodities

which of the following was NOT an accident shown in the course? a) north dakota derailment involving an oil train b) new york derailment involving Amtrak c) spain derailment involving high speeds d) yellowstone derailment involving a coal train

d) Yellowstone derailment involving a coal train

how would American Airlines be classified as a for-hire carrier? a) major b) commuter air carrier c) international d) both a and c

d) both a and c

the type of freight equipment car that is most prevalent is ______. a) refrigerator b) hopper c) gondola d) covered hopper

d) covered hopper

competition among airline carriers is referred to as: a) intermodal competition b) non-competition c) excess capacity competition d) intramodal competition

d) intramodal competition

Why is carloading declining

increasing average car size improving carload productivity

What type of commodities

large quantities of low-value-to-weight(bulk)

over 40% of total costs

semi variable costs

True or False: intermodal transportation is between modes; intramodal transportation is between railroads

true

Used to increase revenues and improve capacity utilization

yield management