Chapter 5 Motor Carriers Questions and Answers

Chapter 5 Motor Carriers Questions and Answers What is one of the primary reasons for the growth of trucking after World War II? The Interstate Highway System was constructed which allowed trucks to give faster services over longer distances What is the primary division between motor carriers? For hire and private What is a Private Carrier? a trucking operation that only hauls freight for the firm which owns it What does most of the trucking industry consist of? carriers operating 6 or fewer trucks There is a relatively small amount of capital required to enter: the truckload industry What do motor carriers haul primarily? various manufactured commodity categories What is the status of competition within the motor carrier industry? The industry is highly competitive with competition between all carriers as well as with firms such as United Parcel Service and FedEx What is one of the service characteristics of the trucking industry? Truck rates are cheaper than rail or air What do the users of truck service benefit from? lower inventory levels due to smaller shipments that other modes LTL carriers must make the same type of equipment decisions as TL along with deciding: where to deploy this equipment The decision as to terminal location: is relatively more difficult for tracking than other modes Which agency within the Department of Transportation governs specifications of trucks such as number of lights, tires and other operating parts? Federal Motor Carrier Safety Administration There are several types of truck terminals. Which one is not used by LTL carriers? fuel terminals The trucking industry is characterized as having: high variable and low fixed costs What is the largest single expense item for trucking firms? Labor "There are _____ economies of scale in the trucking industry." no major The requirements for a truck driver's license are defined by: Federal Motor Carrier Safety Administration Where does funding for highways come from? highway user taxes All carriers receive a safety fitness rating. Who makes the inspection and determines the rating? Federal Motor Carrier Safety Administration What of the following is not one of the current issues facing the trucking industry in the future? Highway construction with its resultant delays The Federal Highway Trust Fund pays for what percentage of construction cost on the interstate highway system? 90% Looking at your profit and loss statement you note that you have operating expenses of $10M and operating revenue of $14M, what is your operating ratio? 71.41 (10/14)*100 What type of trailer can be coupled in twos and threes? 28 foot What mode or segment of a mode generates the most severe competition for the for hire carriers? Private carriers There are several service advantages to motor carrier. Name any three. Accessibility- can provide service to virtually any location as operating authority of the for-hire carrier no longer places restrictions on the areas served and commodities transported Speed-for shipments going under 800 miles Smaller Carrying Capacity-enables users to use the truckload rate, volume discount with a lower volume. Truckload weights are established at 20,000 to 30,000 Smoothness of Transport-the suspension system and the pneumatic tries used on their vehicles. smoother than rail and water transport which cargo is less likely to be damaged There are at least three types of terminals. Name two. Pickup and Delivery Terminals (PUD)-serves a local area and provides direct contact with both shippers and receivers Break-Bulk Terminals-performs both consolidation and dispersion services, a point where freight with common destinations will meet to combine goods in one truck Relay Terminals-freight is never touched, at this terminal one driver substitutes for another when max hours of driving are reached What is the reason that the Truck Load market can be considered as monopolistic competition? low entrance to market requirements, individuals can easily obtain equipment and begin operation within a specific geographical region Explain the difference between for-hire and a private carriers. for-hire-provides services to the public and charges a fee for the service private-provides a service to the industry or company that owns or leases the vehicles, and does not charge a fee but the service provider incurs cost There are several general service characteristics which favor the trucking industry. Name and discuss at least three. Accessibility- can provide service to virtually any location as operating authority of the for-hire carrier no longer places restrictions on the areas served and commodities transported Speed-for shipments going under 800 miles Smaller Carrying Capacity-enables users to use the truckload rate, volume discount with a lower volume. Truckload weights are established at 20,000 to 30,000 Smoothness of Transport-the suspension system and the pneumatic tries used on their vehicles. smoother than rail and water transport which cargo is less likely to be damaged There are three types of terminals which are used by a trucking firm. Define and discuss each type and indicate if they are unique to any one type of trucking firm. Pickup and Delivery Terminals (PUD)-serves a local area and provides direct contact with both shippers and receivers, LTL only Break-Bulk Terminals-performs both consolidation and dispersion services, a point where freight with common destinations will meet to combine goods in one truck, LTL only Relay Terminals-freight is never touched, at this terminal one driver substitutes for another when max hours of driving are reached, mostly LTL Define whether a motor carrier's costs are more fixed or variable. Explain your answer. variable-public investment in the highway system is a major factor contributing to low fixed costs, variable cost of fuel, wages, maintenance and highway user fees. most costs are associated with daily costs