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