CTB Exam
Pure Risk
A business wants to get insured for things like fire, theft, burglary, and worker's compensation, it would seek out ____________ Insurance
Broker Only
A relationship in which the Carrier communicates with the Broker who, in turn, communicates w/ the shipper,, is considered _____?
Long Term Financing
Accounting: Financing in which typically includes term-loan agreements, Mortgage Bonds, Convertible Bonds. And the quicker the financial terms are met, the less risk exists for the lender, and possibly results in lowered rate.
1. Operating 2. Investing 3. Financing
Accounting: Statement of Cash Flow reports difference in beginning & end cash balance for accounting period. The information is broken down into 3 business activities. List them:
Operations
Accounting: Using Revenues & Expenditures, a result of business activity
Owner's Equity
Accounting: What is left for owner if assets were used to pay for liabilities?
Marketing
Activity, institutions, & processes for creating, communicating, delivering, & exchanging offerings that have value for customer, clients, partners & society @ large defines:
Delivery Receipt
Details the condition of shipment upon delivery. - Consignee notes any visible damage or loss immediately upon receipt - Distinguish between refused & returned - Refused: Carrier temporarily stores freight awaiting instruction from shipper - Returned: Consignee accepts delivery, creates new shipping documentation and, makes arrangements for return of freight to shipper.
Shipper & Broker
Direct Truck & Broker refers to relationship which the carrier communicates primarily with _______________?
Certificate of Origin
Document detailing exact contents & national origin of ingredients, parts, etc...
Bill of Lading
Document that serves as the contract of carriage and/or Receipt for goods shipped.
Speculative Risk
Investing, Gambling, & entrepreneurial activity are general examples of _____________
Act of God
Liability: Natural disaster not caused by human & cannot be prevented
1. Brokers 2. Freight Forwarders 3. Freight Payment Firms 4. Intermodal Operators 5. Consulting Companies
List at least 3 examples of non asset based 3PLs
1. Waybill 2. Freight Bill 3. Delivery Receipt 4. Sales Contract
List four basic shipping Documents:
1. Tariffs 2. Contracts 3. Contingency Plans
List three methods of Acquisition
Straight BOL
Long Form or Short Form
1. Reduction in transportation costs 2. 3PLs have access to variety of carriers that a firm does not 3. Help avoid additional overhead 4. Labor agreements can trigger need to outsource 5. Gives firm access to state of the art logistics network w/o additional expense 6. Customers can demand level of services that a manufacturer cannot provide.
Name a factor that man significantly influence manufacturers' decision to outsource:
Carrier Agent
Person employed by specific Motor Carrier or non-competing carriers, who does not publish rates, and takes on no liability for loss or damage, for now at least....
Traffic Management
Planning, implementation, & Control of purchase and use of freight for transportation services can be broadly defined as ________
Customs Invoice
Assessment information on shipments regarding duty charges
Accounting Equation
Assets= Liabilities + Owners' Equity
Yes. But, must have a separate authority via the FMCSA, to do so.
Can a Motor Carrier Broker a load?
Freight Bill
Carrier's invoice for freight charges. - Prepaid by shipper or - To collect, making the consignee responsible
Authoritarian Leader
Communication Pattern which the head of the company assumes all authority & responsibility. Communication moves, vertically from top to bottom
Liaises-Faire Leader
Communication Pattern: Characterized by authority spread amongst employees minimum management interference, horizontal communication
Democratic Leader
Communication Pattern: Leader holds final responsibility, yet delegates authority, involved in determining assignments. Communication flows up & down....
1. Possibly biased toward other members of corporate family 2. Possibly more bureaucratic= inertia 3. Higher overhead due to asset ownership
Cons of Asset Based Companies
1. No assets mean added layer of management to transaction 2. Capacity issues- if primary providers redeploy equipment to other customers 3 Smaller staff/ fewer personnel to meet business needs 4. if weak purchasing power, might to be able to receive same cost savings
Cons of Non-Asset based companies
Estimation for upcoming year. Determined by sales forecast
Pro Forma is Latin Meaning
1. Flexibility- can tailor services to specific needs of client 2. Can select best operator for any given task 3. smaller staff- lower overhead 4. Smaller staff- top management is closer to field 5. May possess info systems where needed 6. Some are spin-offs from parent firm w/ extensive knowledge
Pros of Non-Asset based Companies
1. Perceived as expert in their field 2. Deep financial resources (compared to non-asset based) 3. Resources can be used to ensure required services 4. Large staff: Can provide personnel quickly 5. Have some economies of scale 6. Ability to purchase assets direct from manufacturer creating cost advantages 7. Sophisticated data processing tech.
Pros of outsourcing to Asset Based logistics company?
In- House (Manual Method)
Rates: Company uses printed tariffs to analyze rates & verify freight bill charges
In- House (Computer)
Rates: Fast & efficient means for large volumes of freight bills
Consulting firms (Computer)
Rates: Has same advantage as in-house but, may have more sophisticated applications to handle large volume of rate retrieval
FFP: Freight Payment Plans
Rates: Receive, process, audit, approve &, pay Carrier invoices on behalf of shipper clients. FFP acting as agent of shipper- shipper must take care when choosing.
Consulting firms (Manual Method)
Rates: Use of consultant personnel to retrieve rates & verify freight bill charges
Common Law
Regulation that is also know as Case Law or Judicial Law, and is created by court decisions (precedent), and was founded on Doctrine of Stare Decisis
Statutory Law
Regulations passed by the US Congress, State Legislature, & Local Government....
Administrative law
Restrictions on action created by Government Agencies established by legislative bodies is known as ______
1. Who pays freight 2. Who controls shipment in transit 3. Who assumes risk of loss damage or delay 4. Who has burden of filing claims
Sales Contract: List 4 areas of concern this doc needs to address
Deck Receipt
Ship terminal gives for goods delivered; then held until goods are loaded into ship...
Unsecured loans, Trade Credit, Promissory Notes, Bank Loans, Commercial Paper.
Short term Financing is characterized by:
Waybill
Unlike the BOL, the ____________ is not considered a document of title. Additionally this document displays: - Names of Consignor & consignee - Points of origin of consignment - Destination - Route - Method of shipment - Amount charged for carriage - # Typically used for tracking & shipment
Investing
Using funds acquired via financing to acquire assets is called___
What details are usually listed on a commercial invoice?
Value/Price of goods/ Terms of Sale: Exporter, Importer, Package & Pallets, Price, etc...
1. Set objectives by evaluating impact of decisions on cost and customer service 2. Selection of Carriers
What are common obligations of the 'planning' side in Traffic Management?
1. Usually small 2. Often operate in one region of the country 3. Deal primarily w/ owner operators instead of trucking companies
What are some typical characteristics of an Agricultural Broker?
1. Scheduling Transportation Services 2. Making & Receiving shipments; including: A. Land configuration B. Consolidations C. Re-Routing 3. Preparing/ Processing Documents 4. Claim prevention/Processing 5. Supervising Fleets for privately owned/Operated Equipment
What are some typical responsibilities of 'Operations' side of Traffic Management?
Unless you are a huge company, it is usually much cheaper to hire out, rather than add in-house Allows shipper to focus on selling his product
What is the main reason a shipper would choose to justify outsourcing transportation?
A person who, for compensation; arranges or offers to arrange transportation of property by an authorized MotorCarrier
What is the primary job of a Property Broker?
1. Setting standards to measure progress to goals 2. Measuring performance to compare to standards 3. Form response methods to performance deviations
What responsibilities fall under the "Control" section of Traffic Management?
Assets + Liabilities= Equity
What's the Accounting Equation?
Co-Brokering
When a Carrier works w/ Broker. The Broker then works w/ another Broker who communicates w/ Shipper... This an example of ______?
Services are intangible, as in there is no product received for compensation. Where as, goods are tangible, something you can touch/hold.
When contrasting goods & services, what would you say Is the strongest difference would be?
Never
When is it acceptable for a Broker to hold oneself out to be a Motor Carrier?
Herzberg
Who theorized humans were motivated by factors related to Job Satisfaction & Job Dissatisfaction (Motivation & Hygiene Factors)?
Speculative Risk
__________________ Risk is almost always uninsurable
Intermodal Marketing Company
aka: Shipper's Agent; this type of 3PL arranges piggyback services (TOFC), and tend to focus on long haul
A company's inventory Turnover
Financial Ratio: Cost of Goods Sold/ Sole Average Inventory=?
Current Ratio
Financial Ratio: Current Assets/ Current Liabilities gives you ________
Return on Sales
Financial Ratio: Net Income/ Net Sales will give you...?
Net Income After Taxes/ Common Stock Shares Outstanding
Financial Ratio: Sum represents a company's Earnings Per Share
Net Sales/Accounts Receivable
Financial Ratio: What ratio would an accountant use to determine the Turnover in Accounts Receivable?
Balance Sheet
Accounting: Documentation summarizing dollar amounts of a firms assets, liabilities, & owners' equity accounts at a particular time
Acid- Test Ratio
Financial Ratio: (Current assets-inventory)/ Current Liabilities
Accrual
A type of revenue that is earned but not yet received is called ____?
Liabilities
Accounting: A firm's debts/Payables are____?
Assets
Accounting: Defined as the resources a business owns
Income Statement
Accounting: Document summarizing a firm's revenues during a specified accounting period?
Estimates
Allocation of costs of long-lived assets over useful lives or Estimation of items such as uncollectible A/R
Cargo manifest
An official listing of all cargoes on each voyage
Total Liabilities/ owners' Equity
Financial Ratio: An owner wants a report on how his equity is looking compared to the debt owed by his company. To obtain this information, the accounting department would need to use this ration....
1. By signing, shipper instructs carrier to withhold delivery until consignee pays any outstanding balance 2. Shipper, in most cases, is not liable for freight bill if MC does not follow 3. Permissible to Sign when making prepaid or collect shipments 4. Carriers usually exclude, when good are perishable or - when stop off services are required
BOL Section 7: Without Recourse Clause
Government BOL
BOL used by government agencies & Military
Livestock BOL
BOL used in rail transport of cattle
Ocean BOL
BOL used w/ overseas trade by water transport
Uniform Export BOL
BOL used when shipment requires overland move, water move and, overland delivery
Order BOL
BOL which ensures consignee makes good on balance due in purchase agreement
Property
Broker refers to movement of _____ not People
DOT, FMCSA, STB
Examples of major Regulatory Agencies in the Transportation industry?
1. Voluntary Agreement- Agreement was not coerced, or made under duress 2. Consideration Given- Something of Value one party furnishes to the other 3. Legal Competency- Competent to agree- no minors- no drunks- sound mind 4. No Un-Lawful Acts- i.e. Usury- Lending $ at insane interest rates 5. Proper Form- Written contracts include: 1. Name 2. Signatures 3. Purpose of Contract 4. Terms & Conditions
Give and briefly explain 3 of the 5 Requirements to Render a Contract 'Valid'
When assisting a buyer evaluate the process, a broker can offer incentives for first time buyers, and focus on skill set
How does one, (a broker) go about marketing the services a brokerage there is no tangible product, so this can be tricky
Cash that is paid prior to expenses being incurred or Cash collected prior to the time that revenue is earned
How would you define deferrals?
Negligence
In the majority of situations, the Carrier is liable for loss or damaged freight. Only in cases of blatant ________ is the Broker considered liable
Shippers' Association
Nonprofit Org. Which collaborates in efforts to reduce shipping costs, primarily by pooling shipments...
Theory Z- William Ouchi
Organizational Theory characterized by a combination of American & Japanese ideology, that included long term employment, collective decision making, slow promotion, and informal control....
Theory Y
Organizational Theory: Assumed that humans don't dislike work, will work towards goal which they have committed to. Incentives for accomplishing said goal (personal rewards) creates strong will to do so.
Theory X- Frederick Taylor
Organizational Theory: Assumes people are inherently lazy, need to be coerced, controlled, & frequently threatened to be best motivated to work efficiently
Rail (usually arranging piggyback w/ motor carrier)
Surface Freight Forwarders depend heavily on ______ to move freight.
Pricing, Promotion, Distribution
The marketing process should include a focus on what 3 business decisions.
Reinforcement Theory
Theory that assumes rewarding for positive behavior will hold up stronger than negative behavior met with punishment...
1. Asset Based- A firm which own trucks 2. Non- asset based- A firm does not possess trucks
There are two types of 3PL firms, what are they?
1.Mexican Carrier 2. Broker or freight forwarder to facilitate for cross border movement
Typically, shipments to Mexico require...
Booking Request
This is a request from a shipper/forwarder to a steamship line to reserve space on forthcoming voyage (international)
Export Declaration
This is filed w/ agency of exporting country, describing goods. Primarily used to collect trade statistics...
Between Carrier & Shipper
Traditional Direct Truck Marketing Channel refers to a relationship....
False- it arranges for movement of general commodity, not household goods
True or False: A broker regularly arranges for movement of General Commodity & Household Goods
Pure Risk
Type of risk that is typically insurable?
Consumption Entry
this document is prepared by importing custom house broker for shipments requiring customs clearance into a country