SCMN 3720 STUDY GUIDE 2026/2027 QUESTIONS AND
SOLUTIONS RATED A+
✔✔What caused the dominance of RR transportation to erode in the 1920's? -
✔✔Public funding for roads, Change in economy, Economic regulation
✔✔What was the impact of the 1980 Staggers Rail Act? - ✔✔Economic deregulation
✔✔How many Class I railroad companies are there today and what are the two largest?
- ✔✔7 - BNSF, CN, CP, CSX, KCS, NS, UP
BNSF and UP
✔✔What type of commodities do RR's primarily transport and what segment is currently
the largest? - ✔✔Grain, coal, lumber and wood, pulp and paper
Coal and Intermodal
✔✔How far can a single gallon of diesel take a ton of freight by rail? - ✔✔480 miles
✔✔What type of economic structure best describes RR's and why? - ✔✔Oligopoly - few
companies control the market with smaller competitors
✔✔What are the constraints and strengths of railroad freight? - ✔✔Strengths - Large
carrying capacity, Assume liability for loss and damages, Any type of cargo
Constraints - Fixed rights-of-way, Delays in deliveries in service
✔✔What do TOFC and COFC stand for? And how have they helped rail compete with
TL carriers? - ✔✔TOFC - Trailer on flat car
COFC - Container on flat car
Designed to increase service levels to intermodal customers
✔✔What is the basic unit of measurement for freight handling by railroads? - ✔✔Tons
✔✔Describe the cost structure of the railroad industry. - ✔✔High fixed costs
Low variable costs
✔✔Describe the short run economies of scale of the rail industry. - ✔✔Railroads
operate under conditions of increasing returns until capacity is reached
✔✔Describe the origins of the airline transportation industry. - ✔✔1908 for mail
transportation
✔✔Describe the intermodal (across modes) competition for air carriers. - ✔✔Limited
competition
, ✔✔Describe the intramodal competition for air carriers. - ✔✔Intense competition driven
by new entrants, market coverage expansion, and excess capacity
✔✔Describe the constraints and strengths for the air transport industry. - ✔✔Strengths -
High terminal-to-terminal speed, Reliability, Low rates of damage, Ideal for high value
shipments
Constraints - Limited accessibility, Reduced frequency of flights, Congestion and limited
slot availability at hubs, High service rates, Costly
✔✔Describe the financial characteristics and use of Airports & Terminals for air carriers.
- ✔✔Governments build the airports.
Air carriers pay for the use of airports through fees (landing fees, rent and lease, taxes
on fuel, registration taxes).
Terminal provide services to passengers.
✔✔Describe the breakdown of variable and fixed costs for air carriers. - ✔✔80%
Variable, 20% Fixed
✔✔What two areas represent the highest costs for air carriers? - ✔✔Labor and Fuel
✔✔Describe the Economies of Scale & Density for air carriers. - ✔✔Economies of Scale
- perishability of unused seats
Economies of Density - federal direct operating subsidies to regional carriers to service
less populated geographic areas
✔✔What are the benefits of a hub network for air carriers? - ✔✔Contributes to operating
efficiency
✔✔What % of airline revenues does cargo now represent? - ✔✔About 30%
✔✔What is the projected growth of Air Cargo traffic over the next 20 years? - ✔✔4%
✔✔Of the 4 types of carriers, which generate the most air cargo revenue? - ✔✔Express
Carriers
✔✔What are typical air cargo commodities hauled? - ✔✔High Value or Time Sensitive:
Documents/mail, Pharmaceuticals, Electronic consumer goods, Fashion garments,
Production samples, Perishable agriculture, Seafood products, Live animals
✔✔Which market (global region) represents the largest of cargo traffic volume and
projected growth? - ✔✔Asia Pacific
✔✔Who were the top 3 cargo airlines in 2020? - ✔✔Federal Express, United Parcel
Service, Qatar Airways
SOLUTIONS RATED A+
✔✔What caused the dominance of RR transportation to erode in the 1920's? -
✔✔Public funding for roads, Change in economy, Economic regulation
✔✔What was the impact of the 1980 Staggers Rail Act? - ✔✔Economic deregulation
✔✔How many Class I railroad companies are there today and what are the two largest?
- ✔✔7 - BNSF, CN, CP, CSX, KCS, NS, UP
BNSF and UP
✔✔What type of commodities do RR's primarily transport and what segment is currently
the largest? - ✔✔Grain, coal, lumber and wood, pulp and paper
Coal and Intermodal
✔✔How far can a single gallon of diesel take a ton of freight by rail? - ✔✔480 miles
✔✔What type of economic structure best describes RR's and why? - ✔✔Oligopoly - few
companies control the market with smaller competitors
✔✔What are the constraints and strengths of railroad freight? - ✔✔Strengths - Large
carrying capacity, Assume liability for loss and damages, Any type of cargo
Constraints - Fixed rights-of-way, Delays in deliveries in service
✔✔What do TOFC and COFC stand for? And how have they helped rail compete with
TL carriers? - ✔✔TOFC - Trailer on flat car
COFC - Container on flat car
Designed to increase service levels to intermodal customers
✔✔What is the basic unit of measurement for freight handling by railroads? - ✔✔Tons
✔✔Describe the cost structure of the railroad industry. - ✔✔High fixed costs
Low variable costs
✔✔Describe the short run economies of scale of the rail industry. - ✔✔Railroads
operate under conditions of increasing returns until capacity is reached
✔✔Describe the origins of the airline transportation industry. - ✔✔1908 for mail
transportation
✔✔Describe the intermodal (across modes) competition for air carriers. - ✔✔Limited
competition
, ✔✔Describe the intramodal competition for air carriers. - ✔✔Intense competition driven
by new entrants, market coverage expansion, and excess capacity
✔✔Describe the constraints and strengths for the air transport industry. - ✔✔Strengths -
High terminal-to-terminal speed, Reliability, Low rates of damage, Ideal for high value
shipments
Constraints - Limited accessibility, Reduced frequency of flights, Congestion and limited
slot availability at hubs, High service rates, Costly
✔✔Describe the financial characteristics and use of Airports & Terminals for air carriers.
- ✔✔Governments build the airports.
Air carriers pay for the use of airports through fees (landing fees, rent and lease, taxes
on fuel, registration taxes).
Terminal provide services to passengers.
✔✔Describe the breakdown of variable and fixed costs for air carriers. - ✔✔80%
Variable, 20% Fixed
✔✔What two areas represent the highest costs for air carriers? - ✔✔Labor and Fuel
✔✔Describe the Economies of Scale & Density for air carriers. - ✔✔Economies of Scale
- perishability of unused seats
Economies of Density - federal direct operating subsidies to regional carriers to service
less populated geographic areas
✔✔What are the benefits of a hub network for air carriers? - ✔✔Contributes to operating
efficiency
✔✔What % of airline revenues does cargo now represent? - ✔✔About 30%
✔✔What is the projected growth of Air Cargo traffic over the next 20 years? - ✔✔4%
✔✔Of the 4 types of carriers, which generate the most air cargo revenue? - ✔✔Express
Carriers
✔✔What are typical air cargo commodities hauled? - ✔✔High Value or Time Sensitive:
Documents/mail, Pharmaceuticals, Electronic consumer goods, Fashion garments,
Production samples, Perishable agriculture, Seafood products, Live animals
✔✔Which market (global region) represents the largest of cargo traffic volume and
projected growth? - ✔✔Asia Pacific
✔✔Who were the top 3 cargo airlines in 2020? - ✔✔Federal Express, United Parcel
Service, Qatar Airways
