Transportation and distribution management TEST 2 Questions and Answers

Transportation and distribution management TEST 2 Questions and Answers 1. Private Carriers 2. For Hire Carriers Two types of Motor Carriers Private Carriers Provide a service to the company that owns or leases the vehicles. Do not charge a fee, but incur cost. Usually paid a fee for hauling inbound freight from prepaid suppliers A. Intercity B. Local For Hire Motor Carrier Classification 1. Common - Serve the general public upon demand, at reasonable rates, and without discrimination. 2. Exempt- Transports exempt (unregulated) commodities owned by others for compensation. 3. Contract - Serve specific shippers with whom the carriers have a continuing contract. Answer to b: Exempt A. For Hire Intercity has 3 types: B. Local only has _____ TL(Truckload): A company whose primary business is to transport one single trailer for one shipper between one point of origin and one point of destination Pricing Strategy: Priced by the mile or by load LTL(Less Than Truckload): A company whose primary business is to fill trailers full of freight for multiple shippers among multiple points of origin and multiple points of destination. Pricing strategy: priced by pound Line-haul vehicles Used for long distance transport Typically tractor-trailer combination with 3-4 axles Maximum length and weight varies by state City (straight) trucks Single units used for pick-up and delivery (PUD) Growing use of small line haul trailers for PUD Special vehicles Flatbed, tank trailers, open top, etc. are example of what type of motor carrier? General freight trucking does not require: the use of specialized equipment. The trucks used can handle a wide variety of commodities. Freight is generally palletized, and generally carried in a box, container or van Specialized carriers transport articles that, because of size, weight, shape or other inherent characteristics, require specialized equipment for transportation. 1. Pickup and delivery terminals (PUD) 2. Break-bulk LTL Terminal Types - Peddle run operations - Peddle time and stem time 1. Pickup and delivery terminals (PUD) consist of: Peddle Run: A route that is driven daily for the purpose of collecting and delivering 1. Stem time 2. Peddle time Two elements of a peddle run Stem time : the amount of time it takes a driver to get to his first stop (terminal-first pickup/delivery or last pickup/delivery-terminal) Peddle time: begins once the first delivery or pick up is made (actively involve in pickup/delivery) 2. Break-bulk (and services performed) - Service Provide an intermediate point where freight with common destinations from the pickup terminals is combined in a single trailer for movement to different delivery terminals. - Facilitate higher utilization of vehicle capacity. 1. Shipment consolidation and distribution operations 2. Long Haul Driver domiciles Relay terminals Necessitated by hours-of-service regulations Increasingly used for truckload movements freight is never touched. Relay terminals are different from the PUD and break-bulk terminals in that ______ Relay terminals (slip seat) Which type of terminal can be used for both TL and LTL carrier? Large / Small Characteristic of motor industry is _____ in number, and ____ in size Intense rivalry within the mode (Intra-modal competition) Intra Modal competition for Motor is what? 1. Low fixed Cost (20%) 2. High variable cost (80%) Cost Structure of Motor Carrier Industry (General) HIGH fixed cost Cost Structure of Motor Carrier Industry (LTL) (Operating expenses / Operating revenue) x 100 measures the percent of operating expenses to operating revenue. Operation Ratio = No significant economies of scale in trucking industry Is Economies of Scale for motor carriers possible? C Which phrase best characterizes the level of competition in the motor carrier industry? A. The competition is keen in the TL segment but low in the LTL segment. B. The competition is moderate in the trucking industry. C. The competition is intense in both TL and LTL segments. D. The competition is generally low, but could be high among private carriers. E. The competition is high among specialized carriers but is moderate among general freight carriers. Federal motor carrier safety administration (FMCSA) Who issues safety regulations for trucking industry? COMMON CARRIER To serve, deliver, charge reasonably and not to discriminate are obligations of a : 1. Private 2. For hire Two types of Air carriers Private Air Ones that transport company personnel or their own freight in planes to support their primary business 1. Major Carriers 2. National Carriers 3. Regional Carriers 3 types of For Hire air carriers All cargo carrier: mainly transport cargo. Rights to set rate, enter and exit. Charter carriers (air taxi): small- to medium- size aircraft to transport people or freight. No time schedule nor designated routes. Commuter air carrier (regional carriers): connect less-populated routes with major cities. International Carriers: operate between US and foreign countries Relatively small number of for-hire carriers Most revenues earned by small number of majors, (PRIVATE HAS MANY) Air plane Fore Hire Market structure (Number of carriers) Limited competition from other modes for long distance. Pipeline is only relative competition Airline Intermodal Competition characteristics Intense competition among air carriers in terms of rates and service BECAUSE: 1. entrants of the new carriers after the deregulation in 1978 2. existing carriers route and services expansion Airline Intramodal Competition characteristics Airline Passenger competition The primary service competition is frequency and timing of flights on a route. Advertising used to differentiate services (e.g. amenities, frequent flyer programs). No-frills service: Southwest Airline Cargo competition for airlines Some provide Door-to-door service Increased competition from surface carriers entering air cargo business. Intense competition though cost per flight-hour is higher for large planes, cost per seat-mile is lower for large planes (EOS) Economies of scale for Air characteristics Low fixed cost and HIGH variable cost Operational depends on aircraft used Airline cost structure (fixed/variable) 1. Security 2. Technology 3. Safety Current issues for airline industry FALSE t/f Annual revenues of a regional carrier are higher than those of a major airline. (Number of passengers / Total number of seats) x 100 *Industry average now about 80% *Relationship between load factor, plane size, cost and profitability Load Factor = True T/F Human error due to fatigue and other reasons is a more frequent cause of air accidents than bad weather. TRUE t/f In terms of domestic freight ton-miles and tonnage moved by the whole US transportation industry, the share of US air carriers is insignificant (very small). Low for inter-modal and high for intra-modal The competition for airline industry is: (inter and intra model) The relative importance of water carriers' in the US transportation system declined somewhat over the past decade. This industry is declining in transportation for US: 1. Dry bulk 2. Bulk Petroleum 40% Water carriers primarily transport: Petroleum products make up what % deadweight tons the amount of cargo that can be loaded on an "empty" ship, without exceeding its operational design limits. Maritime Transportation (Water) What is the most effective mode to move large quantities of cargo over long distances? 1. Exempt (dominate)...they are exempt when the carry with dry/liquid 2. Regulated (Water carriers) For hire has these two: 1. Common 2. Contract (Water carriers) Regulated has these two: Private water carriers Own the freight transported Own or lease the vessels May transport exempt commodities on a for-hire basis 1. Exempt Carriers 2. Regulated Carriers For-hire water carriers are carriers that charge a fee for services. These types Include: Exempt carriers Carriers are _____ when transporting dry or liquid bulk commodities Most goods transported by water are bulk commodities, thus most for-hire carriers are _____ from economic regulations Liner Service is a service that operates within a schedule and has a fixed port rotation with published dates of calls at the advertised ports. - Fixed routes - Have published schedules - Relatively high value freight - General cargo - 30% tons, but 80% value - Contract based on freight A Tramp Service or tramper is a ship that has no fixed routing or itinerary or schedule and is available at short notice (or fixture) to load any cargo from any port to any port. -Irregular routes -Sail on a need basis -relatively low freight -liquid and bulk - 70% tons but 20% value -Contract based on vessel 1. Great lakes (78% for missiisspi and gulf intracoastal) 2. Internal Carriers (inland) 3. Inter-coast carriers Water carriers can operate on these industries: HAS HEAVY COMPETITION Railroad -Dry bulk commodities (grain, ores, coal) -Focused around central US river system and the Great Lakes Pipeline (vigorous) -Bulk liquids (petroleum, chemicals) -Focused along the Gulf, Atlantic, and Pacific coasts & Mississippi River system Trucks -Shipment quantity and accessibility Water competition for intermodal Limited degree of competition between water carriers due to the relatively small number of carriers in the industry. Water competition for INTRAmodal Tankers Major types include the oil tanker, the chemical tanker, -liquefied petroleum gas (LPG) carrier and -the liquefied natural gas (LNG) carrier Ship designed to transport liquids in bulk form also what are the 2 major types?