Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
SCMN 3720
Exam 2
| Question | Answer |
|---|---|
| T/F The cost of drivers accounts for approximately 40% of the total operating costs per vehicle mile in trucking. | True |
| T/F Among the transportation modes, trucking is the most prevalent form of private transportation. | True |
| T/F Depreciation is an example of a fixed cost for private trucking. | True |
| T/F The primary advantage of private transportation is flexibility in capacity. | False |
| T/F The largest expense items for trucking firms are fuel and labor. | True |
| T/F When operating miles increase, fixed cost/mile increase. | False |
| T/F Funding for highways primarily comes from highway user taxes. | True |
| T/F According to the U.S. Census Bureau, there are 400,000 private trucks are on the road. | False |
| When, why, and how did the motor carrier industry get started? | Started around World War I when converted automobiles were used for pickup and delivery in local areas. Interstate system of highways developed from 1950s-1991, which was established in Eisenhower's (first trucks were cars converted to delivery vehicles) |
| How much of the cost of the interstate highway system was intended to be funded through federal fuel taxes? | 90% |
| What is the difference between for-hire and private carriers? | For hire carriers provide services to the public and charges a fee for the service / Private carrier provides a service to the industry or company that owns or leases the vehicles, and does not charge a fee, but obviously the service provider incurs cost. |
| What is the difference between common carriers and contract carriers? | Common carriers: required to serve general public upon demand, and without discrimination. / Contract carriers: serve specific shippers with whom the carriers have a continuing contract, thus the contract carrier is not available for general public use |
| Describe the characteristics of the TL segment. | Provide service to shippers who tender sufficient volume to meet the minimum weights required for a truckload shipment. 442,000. 90.5% are less than 6. Costs 5,000-10,000 to begin Fits monopolistic competition bc of the differentiation. High variable cost |
| Describe the characteristics of the LTL segment. | Provide services to shippers who tender shipments lower than the minimum truckload quantities. Oligopoly market structure because its infrastructure is very capital intensive. Need people and a building |
| What types of products are typically hauled via trucks? | Primarily transport manufactured, high value products. It can include: food and manufactured products, consumer goods, and industrial goods. In addition, the vehicles transport almost all of the sheep, lambs, cattle, and hogs moving to stockyards. |
| What are the advantages the motor carrier industry has over other transportation modes? | Accessibility, Speed, Low Loss, Smoothness of Transport |
| Discuss the different types of vehicles used to transport freight. | Line Haul - City Straight (Check Study Guide) |
| Describe the different types of terminals | Pick up & Delivery (PUD)/End of Line (EOL), break bulk, relay / Check Study guide for descriptions |
| What are the two main costs in the motor carrier industry? | Fuel and Labor |
| What driving time regulations do drivers face? | Max of 11 hours after 10 consecutive hours off duty. A driver is permitted to be on duty a max of 14 hours after 10 consecutive hours off duty. No driver can drive after 60 hours on duty in 7 consecutive days, 70 hours in 8 consecutive days. |
| What is the Operating Ratio and what are normal levels for LTL and TL? | a. Operating expense/ operating revenue X 100. b. LTL: between 93-96 profit margin less, capital requirements highers. TL: high 80 lower 90s |
| What are the primary reasons for a firm having a private truck fleet? | Improve Service / Lower Costs |
| What proportion of the commodities shipped domestically are hauled by private carriers? | Private fleets in the United States generate $217 billion in revenue. Just over half of the tons of commodities shipped domestically are hauled by private carriers. Private fleets also contribute to 2.5 percent of the gross domestic product |
| According to the U.S. Census Bureau, how many private trucks are on the road in the U.S.? | 4 million |
| What is a backhaul and how is this significant in private vs. for-hire trucking? | Backhaul is the result of the original move (remember original movement is the headhaul) since it is necessary to bring the equipment and driver back to point A. Backhaul is trying to get a load back from point B back to point A. |
| How does a company save money potentially when it brings trucking inside and runs a private fleet? | Improved Service - Convenience, Flexible Operation, Greater Control, Lower Transit Times, Lower Inv Levels, Reduce Damage, Driver/Sales- person / Lower Cost - Reduce Transport Costs Reduced Inv Level, Advertising, For-Hire Authority to BH, Lower Dr Turn |
| How many interstate motor carriers are there? | 586014 |
| What percent of Interstate Motor Carriers operate with 6 or fewer trucks? | 90.8% |
| How many private carriers are there? | 747,781 |
| How much does it cost to start a Truck Load Business? | 5-10k start-up capital (TL) |
| At relay terminals you never do what? | Unload the trucks |
| What is a measure of operating efficiency and a benchmark of financial viability? | Operating Ratio |
| What is the formula for operating ratio? | (Operating Expenses / Operating Revenue) x 100 |
| In 2015, the average annual earnings for all railroad employees in the United States exceeded $85K. | True |
| Scheduled common carrier freight and passenger rail service began in the U.S. in 1868. | False |
| The short-run cost structure of the railroads is characterized by a large proportion of indirect fixed costs. | True |
| One of the major reasons for the decline in the number of rail companies has been the significant number of mergers or unifications that have occurred in the railroad industry over the past 30 years. | True |
| Railroad per unit costs decline as traffic increases due to a high proportion of variable costs in the cost structure. | False |
| Rail is considered to have a monopolistic competition market structure. | False |
| Coal accounted for 5,442,000 railcar loads in 2015. | True |
| In 2013, railroads carried 21% of all intercity tons of freight transported by all modes. | False |
| Describe the early history of the railroad industry? | a. Began in 1830s in Maryland b. Dominant mode by 1850s c. Played a pivotal role in WWII and US Economic Development |
| What caused the dominance of RR transportation to erode in the 1920’s? | Mergers. Government regulations. The beginning of large-scale government-funded construction of hard-surface roads and superior service and/or cost characteristics of motor carriers. Additionally, competition from water transportation. |
| What type of economic structure best describes RR’s and why? | Differentiated oligopoly. Small number of large companies that own majority of track |
| What are the 7 Class I railroad companies today? | 1. BNSF 2. Canadian national 3. Canadian pacific 4. CSX 5. Kansas City Southern 6. Norfolk southern 7. Union pacific |
| What type of commodities do RR’s primarily transport? | a. 74% bulk (Coal, Farm products, Chemicals) Non bulk (high value finished products) b. Heavy Weight low value bulk products |
| What do TOFC and COFC stand for? | a. Trailer on flatcar (TOFC)- Combines line haul efficiencies. Highway trailers b. Container on flatcar (COFC)- Shipping containers |
| What is the basic unit of measurement for freight handling by railroads? | Carload |
| Describe the cost structure of the railroad industry. | a. Fixed costs are higher because of the land that the rail is on and the costs of laying the rail. b. Semi variable costs are low, maintenance, structures, equipment. |
| What is local drayage? | a. Local drayage has scarce availability and high rates of service. It is the connecting modes of transportation. Pick-up and delivery of containers by truck / the transportation of goods from an ocean port to a rail ramp, warehouse, or other destination. |
| T/F The best reason for the relatively low proportion of fixed costs in the cost structure of the air carriers is private investment in the airways and airports. | False |
| T/F Weight and cubic dimensions are major factors in determining air cargo pricing for a given route. | True |
| T/F Fuel and labor are the cost elements of U.S. scheduled airlines that account for the largest portion of operating costs. | True |
| T/F Airlines had a higher number of passenger fatalities than autos in 2016. | False |
| T/F The main reason business people tend to pay more for airline travel on average is because the expense of the travel is paid for by their company. | False |
| T/F The primary method of service competition between air carriers is the frequency and timing of flights. | True |
| T/F Accessibility is a service characteristic for which air carriers have an advantage relative to other modes of transportation. | False |
| T/F Airports are financed by government entities. | True |
| Describe the origins of the airline transportation industry. | The Wright brothers, use of airplanes for mail transport began the air transport industry, 1903 First Flight |
| The top ten air carriers generate what % of total revenue? | Over 90% |
| What do airlines do to compete for passengers? | Competitive Pricing, Scheduling frequency and timing of flights on a route, city pairing, friendly employees, frequent flyer programs, advertising |
| What % of for hire air carriers total operating revenues were derived from passenger travel in 2013? | 60.4% |
| What type of commodities do airlines primarily target? | High value, perishable, time sensitive, lighter weigh, less bulky, (mail, clothing, flowers, machines, livestock) |
| Describe the cost structure of airlines. | a. High variable costs (80%) Low fixed costs (20%) b. Labor and Fuel are high c. They don’t pay for the airport up front |
| What is cargo transportation pricing dependent upon? | Weight and special handling |
| The aftermath of 9/11 gave rise to what new government agencies that affect the airline industry? | Transportation Security Administration and the Department of Homeland Security |
| What is the definition of Load Factor, and what are typical percentages? | Capacity Utilization Measurement - Typically in the low 80's - (#of passengers/total seats) x 100 |
| Explain the relationship between a plane’s operating cost per hour, number of seats, and load factor in relation to decisions about using larger vs. smaller planes for different routes. | a. The load factor determines operating cost per hour and the use of small or large planes. b. Higher the load factor – higher the revenue per flight |
| What is the definition of Operating Ratio, and what was the average in 2013? | (Operating Expense/Operating Revenue) x 100 (2013 average was 93%) |
| How many people were employed in the U.S. airline industry in June 2014? | 589,000 |
| T/F Pipeline companies have a high proportion of variable costs in their cost structure. | False |
| T/F The water carrier's principal competitor for the movement of grain, coal, and ores is motor carriers. | False |
| T/F Water carrier's intramodal competition is very limited due the nature of industry. | True |
| T/F Water transportation on inland rivers has average speeds of 5.5 to 9 miles per hour. | True |
| T/F The domestic water carrier industry has a large number of big companies. | False |
| T/F Economies of scale and high fixed costs of ownership have contributed to joint ownership of large-diameter pipelines. | True |
| T/F Trucking is the mode of transportation that has costs that come closest to pipeline costs. | False |
| T/F Since water carriage is often a catalyst for economic activity in a community, this is used as a justification for public investment in and operation of ports. | True |
| Describe how water transportation affected the development of the United States and its cities | a. Waterways provided settlers with a link to markets in England and Europe, many major cities developed along the Atlantic Coast |
| Which other transportation mode does water primarily compete with for the movement of dry bulk commodities? | Railroads |
| Which other mode does water primarily compete with for the movement of bulk liquids? | Pipeline |
| What is the primary advantage of water and pipelines relative to the other modes? | Large Carrying Capacity, low cost, low value traffic |
| What are some common disadvantages of water transportation and pipelines? | Slow, limited accessibility, transfer of modes can add cost |
| Describe the cost structure of water transportation. | High variable costs, low fixed costs (natural highways) |
| What are the primary products transported by water carriers? | Crude materials, petroleum, coal, bulk commodities, low cost items |
| What are the primary products transported by pipelines? | Oil and oil products, natural gas, coal and chemicals |
| Describe the cost structure of the pipeline industry. | High fixed, low variable; production of fixed costs with low capital turnover, high ratio of fixed to variable costs |
| Comparing all transportation modes, explain why pipelines carry about 20% of the total inter-city ton-miles but receive only about 4% of the total revenues. | a. Pipeline rates are very low b. Very labor efficient (cost structure lower) charge lower rates, very cheap, can move everything through a pipeline, inexpensive to move things through pipeline |
| How much do you increase the capacity of a pipeline when you double its diameter? | Factor of 4 or 300% |
| How many people were employed in the US motor carrier industry in 2014? | 7.3 million people |
| Know the modes - and how many people are employed - fixed cost vs variable cost - speed - accessibility | |
| How many for hire interstate motor carriers were on file with the DOT in 2015? | 586,014 |
| T/F LTL motor carriers do not need terminals. | False: TL carriers may not need them but LTL carriers must have them. |
| What % of the interstate motor carriers on file with the DOT in 2015 operated with 6 or fewer vehicles? | 90.8% |
| What is the minimum capital needed to form a TL motor carrier? | $5k-$10k |
| T/F Labor and Fuel are the highest proportion of fixed costs for TL motor carriers? | False - They are variable costs |
| What is a normal Operating Ratio for TL motor carriers? | High 80s to low 90s |
| What is a normal Operating Ratio for LTL motor carriers? | 93-98% |
| When did the US Railroad industry get its start? | 1830s in Maryland |
| T/F the Airline industry faces intense competition from other modes of transportation for passenger movement. | False - it faces intense intramodal competition only |
| Class I railroads generate what % of railroad revenue? | 94% |
| What is the most common type of freight car in the railroad industry? | Covered Hopper |
| T/F The operating cost per hour for a typical passenger plane in proportional to the number of passengers on the plane. | False : It costs relatively little to add passengers to fill up empty seats |
| Which two transportation modes have high proportion of fixed costs? | Railroad and Pipelines |
| How many people did the US airline industry employ in 2014? | 589,151 |
| What 5 of the operating costs for airlines are fixed costs? | Approx 20% |
| T/F The primary advantage of the Airline industry is accessibility? | False: Speed |
| Which was the first of the 5 modes of transportation used in what is now the US? | Water |
| How many vessel operators were in service in the domestic for hire water carrier industry in 2011? | 584 |
| What type of entity owns and operates water ports? | Ports are usually owned by local and state governments who collect user fees to offset their costs |
| T/F The Basic costs structure of water carriers consists of low variable and relatively high fixed costs. | False: High variable costs and low fixed |
| Pipelines accounted for approx what % of total US ton miles of freight in 2015? | 19% |
| Natural Gas pipelines represent what % of domestic tone freight? | 7% |
| How many Class 1 railroads operate in the US? | 10 |
| T/F the Load factor for an airline is the Operating Expense / Operating Revenue x 100? | False: that is the calculation for Operation Ratio |
| Which company was #1 in air freight ton-miles in the US in 2016? | FedEx |
| How many rail car loads of coal were carried in the US in 2015? | 5.4 million |
| T/F The highest share of freight moved through the US waterway system in 2014 was petroleum products at 39% of the total? | True |
| The Federal Highway Trust Fund is supposed to pay for what % of construction costs of the interstate highway system? | 90% |
| Which mode is the least labor intensive of the 5 modes? | Pipeline |
| T/F The pipeline industry enjoys relatively low fixed and high variable? | False : low variable and high fixed |
| What was the approximate percentage of revenue generated by the top 10 air carriers in 2016? | 96% |
| Which two modes of transportation are most likely no to damage fragile goods? | Air and Trucking |
| What is the standard track gauge (Distance between rails in the US)? | 4 ft 8.5 inches |
| T/F The same pipeline can be used to convey multiple types or grades of petroleum products. | True |
| Which government agency specifies acceptable flight operations and the hours of service for pilots? | FAA |
| T/F Railroad per unit costs decline as traffic increases due to a high proportion of variable costs in the cost structure? | False: due to high proportion of fixed costs (Review) |
| Doubling the diameter of a pipeline increases it by what percent? | 300% |
| Can you push coal through pipeline? | Yes |
| T/F the contents of a trailer are unloaded at a relay terminal. | False: Trailers are dropped off and picked up by another tractor without being unloaded at the relay terminal |
| Which is the fastest mode of transportation between terminals? | Air |
| According to the US Census Bureau, how many private trucks are on the road? | 4 million |
| Amortization of expensive jets comprises the largest costs element of airlines? | False |
Created by:
Heritage2016