MKT 365 Exam 3

Incoterms are generally revised approximately every ____ years.

10

Truckload carriers focus on shipments of greater than ____ pounds.

10,000

Approximately ____ of cross-border shipments move by water transportation.

60%

The cost of sending a shipment by air transportation from China to the United States can be ____ times more expensive than sending a shipment by water transportation between the two countries.

8-10

____ distinct international methods of payment exist.

Four

The ____ has established six international pallet size standards.

International Standards Organization

Incoterms refer to ____.

Terms of sale for international shipments

A commodity rate is very good for dealing with demand-specific situations.

True

A disadvantage of FOB destination pricing from a seller's perspective is that the seller's organization must have a thorough knowledge of transportation management.

True

A rate is the logistics term that signifies the price charged for freight transportation.

True

A transportation charge (the cost of transportation) can be calculated by multiplying a product's weight times the applicable rate.

True

Because greater uncertainties, misunderstandings, and delays often arise in international movements, safety stocks must be larger.

True

Concealed loss and damage claims are some of the most difficult for shippers and carriers to handle.

True

Environmental regulation of transportation is concerned with water, noise, and air pollution.

True

Failure to comply with labeling guidelines can result in surcharges, administrative fees, or penalty charges.

True

Four distinct international methods of payment (e.g., letters of credit) exist.

True

Freight forwarders sell freight at a higher rate per pound than they pay carriers to haul it.

True

In the United States, the majority of pallets are made of wood.

True

Incoterms 2010 now divides terms of sale into two groups, one of which applies to any mode of transport and the other which applies to sea and inland water transport only.

True

International transportation cannot be effective or efficient without fairly identical handling equipment being in place at each end of the trip.

True

Inventory valuation on an international scale is difficult because of continually changing exchange rates.

True

Most package labeling takes place at the end of the assembly line.

True

Reusable containers work best in a closed-loop system.

True

Some free trade agreements have actually resulted in an increase in documentation requirements.

True

Some nations with weak balance-of-payment positions issue an import license on the condition that the goods move on an aircraft or vessel flying that nation's flag.

True

The U.S. railroad industry is dominated by four freight carriers.

True

The documentation requirements for international shipments can act as a nontariff barrier to trade.

True

The level and degree of transportation regulation varies from country to country.

True

The major advantage of the unit load is that it enables mechanical devices to be substituted for manual labor.

True

Transportation documentation serves both a practical function (e.g., what, where, and how much is being transported) as well as potentially providing legal recourse if something goes awry

True

When a unit load is secured to a pallet, it is more difficult for pilferage to take place

True

When a unit load is secured to a pallet, it is more difficult for pilferage to take place.

True

When one country's currency is weak relative to other currencies, it is more costly to import products into that country.

True

The Globally Harmonized System of Classification and Labeling of Chemicals (GHS) was developed by the ____.

United Nations

A(n) ____ rate simplifies each of the three primary rate factors—product, weight, and distance.

class

With respect to density, a vehicle loaded with ____ is most likely to cube out (cubic capacity is filled before reaching its weight capacity).

coal

A(n) ____ rate refers to a specific rate for every possible combination of product, weight, and distance.

commodity

Freight forwarders ____.

consolidate the shipments of several shippers

A unit load involves ____.

consolidation of several units into larger units to improve efficiency in handling and to reduce shipping costs

The primary advantage for motor carriers is ____.

flexibility

Common carriers of transportation have ____ obligations.

four

Shippers' associations ____.

function in a manner similar to freight forwarders

In the class rate system, freight rates are expressed in dollars or cents per ____.

hundredweight

____ transportation occurs when two or more modes work closely together in an attempt to utilize the advantages of each mode while at the same time minimizing their disadvantages.

intermodal

Which of the following statements about international inventory management is false?

inventory for sale in one nation generally serves the needs of markets in nearby nations

The basic unit in unit loading is a ____.

pallet

Firms that specialize in carrying packages that weigh up to 150 pounds are called ____.

parcel carriers

Which of the following is not a source of income for international freight forwarders?

payment for freight pick up and delivery

Product density refers to a product's ____.

weight per volume

The use of Incoterms is mandatory for international shipments.

False

The volume of transportation freight claims has increased in recent years.

False

Truckload freight moves through a carrier's terminal(s).

False

With FOB origin pricing, the seller retains title and control of the shipment until it is delivered.

False

The Logistics Performance Index ____.

was created in recognition of the importance of logistics in international trade

____ is generally the cheapest form of transportation.

water

____ systems consider the reverse flow of products, their reuse, and the marketing and distribution of recovered products.

Closed-loop

The U.S. ____ is the federal government body with primary responsibility for transportation safety regulation.

Department of transportation

____ refers to the interaction between workers and workplace conditions.

Ergonomics

Which of the following is not a possible payment option (terms of sale) for U.S. domestic shipments?

FOB origin, freight collect and charged back

"Weighing out" refers to a container that has been weighed prior to its departure from a container yard.

False

As a general rule, labeling requirements and enforcement tend to be more stringent in larger countries (based on population) than in smaller countries.

False

Bilateral agreements liberalize international aviation opportunities and limit federal government involvement.

False

Freight forwarders are the same thing as freight brokers.

False

International freight forwarders' income comes from two primary sources

False

National holidays have no impact on the effectiveness and efficiency of international logistics.

False

Plastic pallets tend to be less expensive than wooden or metal pallets.

False

Shipping conferences refer to annual meetings of large international shippers.

False

The International Chamber of Commerce developed the Globally Harmonized System of Classification and Labeling of Chemicals (GHS).

False

The World Trade Organization has established six international pallet size standards.

False

The class rate system simplifies with respect to three primary factors—density, product, and distance.

False

The primary purpose of a nontariff barrier is to encourage exports.

False

What international method of payment is issued by a bank and guarantees payment to a seller provided that the seller has complied with applicable terms and conditions of the particular transaction?

a letter of credit

Which of the following is not a key piece of classification and labeling information provided by the Globally Harmonized System of Classification and Labeling of Chemicals (GHS)?

a picture of the chemical or hazardous material

____ is generally the fastest form of transportation for shipments exceeding 600 miles.

air

What do we call a system of accounts that records a country's international financial transactions?

balance of payments

The most important single transportation document is the ____.

bill of lading

International freight forwarders can provide a number of functions. Which of the following is not one of them?

booking space on carriers, preparing an export declaration, arranged for insurance, and preparing and sending shipping notices and documents

As a general rule, labeling requirements and enforcement tends to be more stringent in ____ countries than in ____ countries.

economically developed; economically developing

Which of the following is not a political restriction on international trade?

embargoes, import quotas, tariffs, and barring certain types of shipments

Consular documents ____.

involve obtaining permission from the importing country for the goods to enter

When one country's currency is weak relative to other currencies, ____.

it becomes more costly to import products to the country, but its exports surge

A transportation broker _____.

looks to match a shipper's freight with a carrier to transport it

A major advantage of the unit load is ____.

mechanical devices can be substituted for manual labor

What is the time limitation within which a freight claim must be filed?

nine months from the delivery date

Which international logistics service provider is often confused with the international freight forwarder?

non-vessel operating common carrier

Less-than-truckload motor carriers ____.

operate through a series of terminals

Integrated air carriers ____.

own all their vehicles as well as pick up and delivery facilities

Which of the following is false?

pictures are preferable to words for labeling a product

____ is the most reliable form of transportation.

pipeline

Which of the following is not a cultural factor that can influence international logistics?

population

A major drawback to metal and plastic pallets is their ____.

price

Which mode is not the "best" or "worst" on any of the six attributes (e.g., capability, flexibility, etc.) that were used to compare the modes?

railroads

In the United States, ____ account for the largest share of ton-miles and ____ account for the majority of freight revenues.

railroads; trucks

Consignees are ____.

receivers of freight

____ can be defined as the process of determining how a shipment will be moved between origin and destination.

routing

A ____ is used in areas where dockworkers cannot read but need a method to keep documents and shipments together.

shipper's mark

Which of the following is false?

shippers or carriers are entitled to a product's full retail value when filing a freight claim

____ are taxes that governments place on the importation of certain items.

tariffs

With FOB destination, freight prepaid ____.

the seller pays the freight charges and owns the goods in transit

Weight times rate equals ____.

transportation costs