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