transportation

Question 1

The transportation system

Answer 1

the physical link connecting a company with the customers, raw material suppliers, plants, ware houses and distribution channel members

Question 2

Transportation infrastructure can broadly be classified as

Answer 2

hardware and software

Hardware consists of physical assets that comprise terminals, storage facilities, right of way for movement and vehicles/equipment.

Software, which is essentially the service superstructure, consists primarily of maintenance, operations and value added services

Question 3

The five basic transportation modes

Answer 3

Rail, highway, water, pipeline, and air

Question 4

Water transport employs two types of vessels.

Answer 4

Deep-water vessels, which are generally designed for ocean and great lakes use, are restricted to deep-water ports for access.

Diesel-towed barges, which generally operate on rivers and canals, have considerably more flexibility.

Question 5

Transportation functionality provides two major functions:

Answer 5

Product Movement: A primary transportation function is product movement up and down the value chain

Product Storage: A less common transportation function is temporary storage.
A second method to achieve temporary product storage is diversion.

Question 6

Product Storage explanation

Answer 6

Vehicles make rather expensive storage facilities. However, if the in-transit product requires storage but will be moved again shortly (e.g., in a few days), the cost of unloading and reloading the product in a warehouse may exceed

Question 7

two fundamental principles guiding transportation management and operations

Answer 7

Economy of scale

Economy of distance

Question 8

Economy of Scale

Answer 8

It refers to the characteristic that transportation cost per unit of weight decreases when the size of the shipment increases.

A heavier load allows costs to be “spread out,” thereby decreasing costs per unit of weight.

larger capacity transportation vehicles such as rail or water are less expensive per unit of weight than smaller capacity vehicles such as motor or air

Question 9

TL

LTT

Answer 9

Truckload (TL) shipments (i.e., shipments that utilize the entire vehicle’s
capacity) cost less per pound than less-than Truckload (LTT) shipments

Question 10

Economy of Distance

Also known as?

Answer 10

It refers to the characteristic that transportation cost per unit of distance decreases as distance increases.

Transportation economy of distance is also referred to as the tapering principle since rates or charges taper with distance.

Question 11

Transport transactions are often influenced by five parties:

Answer 11

the shipper (the original party), 
the consignee (destination party or receiver), 
the carrier, 
the government,
the public

Question 12

Transportation infrastructure consists of

Answer 12

the rights-of-way, vehicles, and carrier organizations that offer transportation services on a for-hire or internal basis.

Question 13

rights-of-way

Answer 13

the legal right, established by usage or grant, to pass along a specific route

Question 14

Types of Regulation

Government transportation regulation can be grouped into two categories

Answer 14

Economic regulation: Regulation of business practices is the oldest form of government control.

safety and social regulation.

Question 15

the Transportation Safety Act of 1974

Answer 15

which formally established safety and social regulation as a governmental initiative.

Question 16

The Hazardous Materials Transportation Uniform Safety Act of 1990

Answer 16

provided federal government control over equipment design, hazardous material classification, packaging, and handling, took precedence over state and local environmental regulations.

Question 17

A ton-mile

Answer 17

standard measure of freight activity that combines weight and distance.

Question 18

Mate’s receipt

Answer 18

a receipt issued by the Commanding Officer of the ship when the cargo is loaded on the ship. It is a prima facie evidence that goods are loaded in the vessel.

Question 19

Transport Service is achieved by:

Answer 19

achieved by combining the capabilities of modes

Question 20

Traditional Carriers

Answer 20

The most basic carrier type is a transportation firm that provides service utilizing only one of the five basic transport modes. Focus on a single operational mode permits a carrier to become highly specialized.

Airlines

Question 21

Package Service

Answer 21

to provide reasonably priced small-shipment service due to overhead cost associated with terminal and line-haul operations

The advent of e-commerce and the need for consumer-direct fulfilment have significantly increased demand for package delivery.

Question 22

linehaul operations

Answer 22

Line Haul refers to the movement of freight with any mode of transport by land, air or waterway between distant cities. Freights can vary in volume and weight, from small documents to heavy pallets.

Question 23

Intermodal Transportation

K/a

Answer 23

It is combines two or more modes to take advantage of the inherent economies of each and thus provide an integrated service at lower total cost.

piggyback service

This common intermodal arrangement combines the flexibility of motor for short distances with the low line-haul cost associated with rail for longer distances.

Question 24

piggyback service

Answer 24

integrated rail and motor service commonly termed piggyback service.

Question 25

Non-operating Intermediaries

Answer 25

The overall transportation industry also includes several business types that do not own or operate equipment

Non operating intermediaries economically justify their function by offering shippers lower rates for movement between two locations than would be possible by direct shipment via common carrier. Because of peculiarities in the common-carrier rate structure, such as minimum freight charges, surcharges, and less-than-volume rates, conditions exist whereby non-operating intermediaries can facilitate savings for shippers

Question 26

The primary intermediaries are

Answer 26

freight forwarders, shipper associations

and brokers.

Question 27

The typical physical distribution performance cycle involves five activities:

Answer 27

order transmission, 
order processing, 
order selection, 
order transportation 
and customer delivery

Question 28

Transportation transactions are influenced by five parties

Answer 28

the shipper (originating party), the consignee (destination party or receiver), the carrier, the government, and the public

Question 29

Transport Economics and pricing concerned with?

Answer 29

concerned with the factors and characteristics that determine transport costs and rates.

Question 30

Transport economics is influenced by

Answer 30

Seven factors

Distance (cost-disance curve: fixed cost so dont start at begining)
Volume(cost per unit weight decreases as load volume increases; consolidation of small load in larger load)
Density (higher density products are assessed at lower transport costs per unit of weight as the capacity is better utilized)
Stowability(Odd sizes and shapes, o not stow well and typically waste space.)
Handling
Liability
Market Factors

Question 31

1. deadhead

2. back-haul

Answer 31

1. the vehicle is returned empty

2. they must find a load to bring back

Question 32

Total Transportation Costs

Answer 32

Transit Time Cost: the temporal cost of transportation. longer the transit time, the inventory is inaccessible to the user.

Obsolescence and Deterioration Costs: products which are perishable and delicate in nature, whose physical attributes deteriorate over a period of time, gradually resulting into devaluation of the product.

Protective Packaging Costs: there may be requirements of special packaging. This cost is also a part of the total transport cost.

Insurance Cost

Joint Costs: Joint costs are expenses unavoidably created by the decision to provide a particular service.

Class Rates: In transportation terminology, the price per kilogram to move a specific product between two locations is referred to as the rate. The rate is also called the tariff

Question 33

6 Transportation Administration
1. Operations Management

2. Rate Negotiation
3. Auditing and Claim Administration
4. Logistical Integration

Answer 33

1. From an operational perspective, key elements of transportation management are equipment scheduling, load planning, routing, and carrier administration.
2. For any given shipment it is the responsibility of the traffic department to obtain the lowest possible rate consistent with service requirements. The prevailing price for each transport alternative-rail, air, and so on-is found by reference to tariffs.
3. For any given operating period, traffic management is expected to provide the required transportation services at budgeted cost. It is also traffic management’s responsibility to search for alternative ways to deploy transportation to reduce total logistics cost.

Question 34

Freight Consolidation

Answer 34

Freight consolidation is a service offered by some shipping companies to lower the total shipping cost and to increase shipping security.

It is also known as consolidation service, assembly service, and cargo consolidation.

Question 35

Freight Control: 2 responsibility

Answer 35

Tracing: a procedure to locate lost or late shipments

Expediting involves the shipper notifying a carrier that it needs to have a specific shipment move through the carrier’s system as quickly as possible and with no delays.

Question 36

Three primary types of transport documentation

Answer 36

bills of lading, freight bills, and shipment manifests.

Question 37

1. Bill of Lading
2. Freight Bill
3. Shipment Manifest

Answer 37

1. The basic document utilized in purchasing transport services. It serves as a receipt and documents products and quantities shipped.
2. represents a carrier’s method of charging for transportation services performed. It may be either prepaid or collect.
3. It ists individual stops or consignees when multiple shipments are placed on a single vehicle. The manifest lists the stop, bill of lading, weight, and case count for each shipment. The objective of the manifest is to provide a single document that defines the overall contents of the load without requiring review of individual bills of lading. For single-stop shipments, the manifest is the same as the bill of lading.