Transport Final
The principle area of service competition and source of competitive advantage between air passenger carriers is:
Frequency and timing of flights
If the shipment terms are FOB Origin, which of the following applies?
The buyer is responsible for filing loss or damage claims with the carrier
A specialty transportation service that a shipper might use to move a large quantity of small shipments in bulk to a more local distribution point is called
pool distribution
Given the same rate structure as in the previous question, how much would it cost (in $/cwt.) to ship an order that weighs 4200 lbs.?
$7.74
All of the following are examples of typical "line" responsibilities in transportation management except:
-Carrier selection -Shipment planning -LOBBYING GOVERNMENT ON PROPOSED REGULATORY CHANGES <===== -Tracing and expediting shipments -Pre auditing freight rates
A certificate of origin is important for which of the following reasons?
-It enables customs officials to enforce trade embargos -It enables customs officials to assess the proper import duties
Which of the following are typical functions of a good WMS?
-Order picking support -Labor management -Effective slotting/item location
Which of the following functions is normally performed by a Port Authority?
-Ownership of waterfront rights -Development of pier terminal facilities for lease/rental purposes -Promotion of the port -Collection of usage fees
All of the following are examples of transportation service related measures EXCEPT:
-Transit time -Damage levels -On time pickup/delivery performance -OPERATING RATIO <=====
Which of the following are factors that could have a significant influence on a carrier's truckload rate?
-Type of service required -Seasonal impact on supply and demand -Direction of freight movement e.g. headhaul vs. backhaul
Private warehouses are generally advantageous when which of the following is true? (1) Demand is fairly stable; (2) greater control is necessary; (3) throughput is sporadic; (4) investment capital is scarce: or (5) seasonal items need to be stored for long periods of time.
1 and 2
Use of third party logistics (3PL) services has been increasing due to all of the following except:
3PL's do not charge the shipper for their service, they charge the carrier
A firm trying to decide between public and private warehousing collects some data on the costs associated with each. A local public warehouse has told the firm they can store the goods for a monthly charge of $.35/pound. The firm estimates that if it built the warehouse, it could store the goods for $.15/pound plus $100,000 in monthly fixed costs. Assuming these numbers are accurate, what is the smallest volume (in pounds) that the firm would need to justify building a private warehouse, i.e., at what point is the cost for either option equal?
500,000 lbs.
If a carrier's LTL rate structure is established as follows: Rate Minimum wt. (M=1000 lbs.) 2M lbs. $8.25/cwt. 5M lbs. $6.50/cwt. 10M lbs. $4.50/cwt. What is the "breakpoint" or point of indifference between 5M and 10M lbs.? That is, at what point (weight) will it become more economical for a shipper to pay for the full 10M lbs.?
6923 lbs.
ABC trucking had operating expenses of 7 mil in 2013 and transportation related revenue of 7.5 mil.They also reported a profit of 5000000 for the sale of property they purchased 4 years ago. the op ratio of ABC trucking in 2013 was:
93
A transportation shipment of 75 tons for 125 miles would be:
9375 ton miles
Railroad per unit costs decline as traffic increases giving the mode an opportunity?
A large proportion of fixed costs in the cost structure
Which of the following best describes a private motor carrier?
A trucking operation that provides transportation service to the firm that owns or leases the vehicles
Which of the following is NOT required to be on a bill of lading?
ALL OF THESE ARE REQUIRED -Origin and destination information -Carrier designation -Freight payment terms -General description of the shipment contents
Which of the following establishes the interstate commerce commission
Act to regulate commerce 1887
The supreme court handed down a landmark decision in a case named the Champlin oil case.The decision stipulated that:
All pipelines in the us must operate as common carriers
One of the reasons shippers adopt the "Core" carrier concept is
Because it allows them to leverage their business with fewer carriers
Which type of warehouse stores items for producers that wish to postpone payment of duties on the items stored?
Bonded warehouse
The business term that refers to the processes and procedures an organization puts in place to ensure that essential functions can continue during and after any type of disruption or disaster is known as:
Business Continuity Planning
Which of the following is an example of risk transfer
Buying insurance to cover the loss caused by a disruption
Which of the following would be the best example of a warehouse productivity measure?
Cases handled per labor-hour
The United States legal system relies upon principles or rules of law that were developed from previous court decisions. The system is referred to as:
Common Law
When considering the relationship model we reviewed in class "facilitators" refer to
Commonalities and or environmental factors that should help ensure a successful relationship
Pipeline accounts for 20% of the total intercity tonnage shipped in the U.S. However their revenues are only 4% of the total intercity transportation revenues. Why is this?
Comparatively low rates
Reliability in transportation is defined as:
Consistency of transit time
ABC Trucking has a shipper wanting to move widgets form Houston, Tx to Fayetteville, AR. ABC's equipment (the truck and trailer combined) weighs 34000 lbs. The trailer dimensions are 53 ft long 8 ft wide and 8 feet high. The widgets weigh 12 lbs per cubic foot which constraint will the shipper hit first- available cubic space or weight capacity
Cube- the trailer will be filled before it is at its maximum weight load
The first step in an effective bidding process should always be:
Define your objective
In rail, the term abandonment refers to:
Discontinuing service on tracks that are no longer profitable sources of revenue
Generally, the higher the density of an item, the higher the rate classification.
False
Many of today's transportation transactions have become paperless because:
Electronic Data Interchange (EDI) is far more accurate and faster than paper for information flow
Which of the following commodities would be most likely to be shipped on an air carrier?
Emergency shipments and high value and time sensitive goods
The government can force individuals to sell their property if it is needed for a transportation project or other public us. This is called
Eminent domain
Maquiladoras can best be described as:
Factories located in Mexico (usually near the US border) that take unfinished goods from the US, perform further processing and then return them to the US with little or no tariffs/duties
3PL's are used primarily by small and midsized companies due to the lack of internal resources. Large companies are more inclined to "do it themselves"
False
A 4PL is a company that is subcontracted or hired by a 3PL
False
A good strategy for shippers on small LTL shipments is to use private carriage.
False
According to your instructor, detention and demurrage charges associated with delays in loading and unloading freight should be set up to be included in the line haul charges in order to minimize the number of freight bills a company gets.
False
An important element of risk mitigation strategy is the clear identification of roles and responsibilities for developing and implementing strategy
False
Competitive bidding is a good purchasing strategy when the primary objective is to develop a core carrier program with strong relationships.
False
Considering the price elasticity of transportation, the competitive impact of a price increase for a specific transportation company is not as significant as it is for companies of other industries
False
Flag of convenience refers to the practice ocean liners have of flying the flag of the country it is approaching so the country officials know it is planning to dock.
False
Freight Brokers do not have to file any price schedules with the STB; however, they must maintain cargo liability insurance because they are considered to be a carrier.
False
Fuel and insurance are the two largest cost elements for the airlines
False
Given the broad availability and use of WMS technology, most companies are choosing private warehousing these days vs. outsourcing to third parties.
False
In air transportation, the high cost of airplanes results in a cost structure with high fixed costs and relatively low variable costs.
False
Labor and insurance are the two largest components of variable cost for motor carriers.
False
Load factor is a term used by the airlines to express the ratio of passenger revenues to freight revenues on any particular route
False
Many large companies have improved logistics management by simply dividing transportation management responsibilities for inbound and outbound flows into separate organizations.
False
The bullwhip effect refers to the phenomenon of increasing or amplified variation in demand as we move toward the point of consumption.
False
The cost per hundredweight for ltl shipments is typically higher on high density items than it is for low density items.
False
Tolls are a good example of existence charges in states that allow their use.
False
Total logistics costs as a percent of GDP have remained fairly consistent over the past 25 years at about 8-9%
False
Transportation and Distribution 3PL s have leveraged their expertise in TMS and WMS applications to increase their value to clients
False
Warehousing costs are normally traded off in the total system against inventory costs, that is, they are inversely related.
False
When shipping a less than full truckload order, it is always cheaper to use the best LTL rate instead of paying the full truckload rate.
False
truckload carriers have low variable costs and high fixed costs.
False
Which type of special carrier usually offers services to locate customers for a carrier, but could be used by a shipper to locate a carrier?
Freight Broker
One of the major competitive advantages that rail has over truckload carriers is:
Fuel efficiency and higher economies of scale as volume increases
Pipelines that are used for movement of products from oil wells to storage areas are classified as which of the following ?
Gathering lines
The purpose of an Advance Shipping Notice is to:
Give the consignee (receiver) information about the specific contents of a shipment when the shipment leaves the origin
Since the economic deregulation of most modes, safety regulations:
Have received greater attention from the government
The cost structure of domestic water carriers is
High variable and low fixed costs
Funding for highways comes mostly from which of the following?
Highway user taxes
Relative to warehousing, the centralization-decentralization issue, in its most basic form, asks which question.
How many warehouses shall there be?
Which of the following is not considered to be one of the value of service characteristics for transportation?
Insurance rates
When retailers switch to cross docking operations at their DC's, what is the impact on lead time from the store's perspective?
It increases order lead time
With regard to competition in the airline industry, which of the following is true
It is very limited with other modes, but very intense within the mode
What was the the primary purpose of the legislation which created Amtrak?
It relieved existing railroads for the responsibility of providing passenger service
A shipment moving from Hong Kong to Rotterdam could make the entire voyage on a ship (through the Panama Canal) or it could be off-loaded at the port of Long Beach, CA, put on a train to an East Coast port and then reloaded on a ship going to Rotterdam. If the shipment is off-loaded and moved by train across the United States, the United States is called a:
Landbridge
the air carriers terminals (airports) are financed by government entities. the carriers,however, pay for the use of airports through which of the following?
Landing fees rent and lease payments for space local taxes on fuel aircraft registration taxes
When transportation cost is reduced by one half, the relevant market area for a company is quadrupled. This is referred to as:
Lardner's law
Railroad carloadings have declined since 1900. Which of the following is the primary reason for the decline?
Larger cars and increasing car productivity
The term cabotage refers to :
Laws prohibiting foregin companies form moving passengers or freight between two domestic cities or ports
Which of the following is a major advantage offered by the pipelines vs. other modes?
Low rates and Reliability/ consistency of service
Which of the following best describes the majority of freight that moves via rail?
Low value, heavy commodities in bulk
The Reed Bullwinkle Act of 1948 did which of the following?
Made it legal for both railroads and trucking companies to collectively set prices
Air carrier revenues are reported into which of the following groups of carriers?
Majors, nationals, regionals
About what percentage of railroad revenues are earned by the 7 class 1 railroads?
More than 90%
A standard measurement used for the volume of international freight is:
Number of TEU's
Which of the following was NOT given as a key criterion for carrier selection?
Number of years the carrier has been in business
The operating ratio in air transportation measures
Operating expense as a percent of operating income
Supply Chain management consists of three key flows. These were given as:
Product, cash and information
Most airline revenues come from
Passenger fares
Which mode of transportation does not depend on backhaul movements to improve overall operating costs?
Pipelines
One small shipment strategy we reviewed involves combining several small shipments destined for a common region into a truckload shipment and hiring a distributor to break the large line haul shipment down into small LTL deliveries. This method of delivery is called:
Pooling
What are the three general categories of information that are necessary to facilitate the transportation process?
Pre-transaction, transaction and post transaction
Which of the following best describes the oil pipelines in the United States?
Primarily operate as common carriers on a for hire basis
What are the two key parameters involved in risk assessment?
Probability and impact
Water carriage is recognized as being a catalyst for economic activity in many communities. This recognition is used as a justification for which of the following?
Public investment in and operation of ports
The domestic water carriers's principal competition for the movement of grain, coal, and ores is whihc mode of transportation?
Railroads
NAFTA was designed to
Reduce or eliminate duties between the U.S., Mexico and Canada
Since 9/11, there have been several acts passed by the US to improve security on international trade. Most of these regulations have been focused on
Requiring more electronic and advanced faster communications regarding shipment contents
Which of the following is considered the top disappointment for companies relative to the use of 3PLs
Service and cost level commitments not realized
Relative to information needs on shipments, which of the following is typically required by the shipper, carrier and the consignee?
Shipment status
The term used for the movement of coal through pipelines is
Slurry
Which of the following special carriers can act as both a shipper and a carrier?
Surface forwarders
Which of the following was not given as a period of regulation
The competitive era
Which sentence best describes the current regulation of transportation in the US?
The federal government has removed most economic control, but continues to strongly regulate safety.
In the CPG Industry, the commonly used pallet pooling program is called CHEP, named after the company that owns the pallets. In this program who bears the primary cost?
The manufacturer who gets pallets from CHEP
Stem time refers to:
The time it takes a driver to get from the terminal to his/her first pick up or capacity and the time from the last stop to get back to the terminal
Which of the following best describes the public promotion that is received by domestic water carriers?
The work done by the corp of engineers and the coast guard
Which is the best example of a service characteristic of the trucking industry?
Trucks have a speed advantage for shipments less than 500 miles
3PL's have been aggressive in developing "state of the art" technology which has improved transparency and helped them better integrate their services with the companies they serve
True
A "per se"violation is a type of anti trust violation that is illegal, regardless if any economic harm is done to competitors or other parties.
True
A private air carrier is one that transports its own personnel or freight in aircraft that it own or leases
True
Airport hubs are similar in purpose or concept to the LTL carriers break bulk terminals
True
By doing a better job of matching equipment to passenger demand, airlines have raised their load factors to about 80%
True
Density, stowability, ease or difficulty of handling, and carrier liability are the four key factors used when determining the classification for class rates.
True
Domestic water carriers compete for traffic with other modes however the relatively small number of water carriers results in a limited amount of intramodal competition
True
Freight forwarders are required to have cargo insurance in order to protect the property of the shippers they represent
True
Indemnification clauses in contracts attempt to make sure that liability ultimately falls to the person who is responsible for causing the damage or loss.
True
Proactively planning an alternative routeing to avoid likely delays is good example of a risk management strategy
True
Rail mergers that eliminate duplicate rail lines are called side by side mergers.
True
The C-TPAT program is a voluntary program designed to improve international supply chain and us border security
True
The Icc termination act of 1995 eliminated the icc and transferred any remaining economic regulation for rail and truck to the Surface Transportation Board
True
The current trend is for firms to establish more strategic relationships with their 3PL partners
True
The growth of intermodal transportation has been aided by the deregulation of US transportation and the growth in global business/ international trade
True
The micro-bridge is an adaptation of a mini-bridge, only it applies to interior cities such as Denver or St. Louis instead of ocean ports.
True
The primary purpose of the Freight Classification System is to simplify and standardize the commodity description, the listing of origins/destinations and the rate structure.
True
The regional rail reorganization act of 1973 attempted to maintain rail freight service in the northeast by creating the consolidated rail corporation (Conrail) which was formed from six bankrupt railroads
True
The second step in the transportation risk management model we reviewed is assessing the impact and probability of a service distribution
True
The term "released value rates" refers to the practice of establishing lower freight rates in exchange for limiting the carrier's liability for claims.
True
The two primary reasons we need a national transportation policy are national defense and economic development
True
Truck transportation accounts for approximately two thirds of the total logistics spend in the US
True
Value of service pricing is sometimes referred to as "charging what the market will bear."
True
cabotage laws require the intracostal and intercostal traffic in the US can be carried in U. S. built and registered ships.
True
The best definition of the term right of way is:
What a carrier's equipment uses to provide the movement of freight
Since the Staggers Act
freight rates have gone down safety levels have improved customer service has improved intermodal traffic has more than doubled
Barges are to domestic water carriers as ____________ are to trucking companies:
trailers
