AVMG 4200 Exam 2 | Answered with complete solutions

AVMG 4200 Exam 2 | Answered with complete solutions The air transportation industry is typically (compared to other modes) _____ and _____ capital intensive, highly leveraged The economic product characteristics that result in a high "air eligibility" preferences include unpredictable demand It is generally accepted that the first integrated, "door to door" air freight service was established by DHL in 1969 Because of its high capitalization, the financial health of the air transportation industry is closely correlated with the global economy Compared to other transportation modes, the air transportation sector has much higher debt loads Among the most common forms of air cargo carriage ("business models") are dedicated (all-cargo), integrated, belly, and combination carriers Most competition for air cargo comes from all other air freight carriers and the motor freight (trucking) industry Among the many economic problems that affect air cargo is that while capacity is relatively fixed and slow to change, demand is rapidly changing The physical product characteristics that result in high "air eligibility" preferences include high weight/volume (physical density) "Combination" air cargo carriers differ from "Integrated" carriers in that they carry both passengers and cargo Traditionally, the product/shipment characteristic most closely associated with "air eligibility" has been its value density The physical product characteristics that result in high "air eligibility" preferences include perishability (economic and physical) The first Contract Air Mail (CAM) routes were established by the U.S. Postal Service in 1925 The competitive environment for air cargo services can best be characterized as specialized based on product/shipment characteristics but multi-modal and varied The first recorded freight transport by powered aircraft in North America was bolts of silk from Dayton Ohio to Columbus Ohio in 1910 "Integrated" air cargo carriers are unique in that they offer door to door service using motor freight Globally, between ______ of all air cargo is carried as "opportunity cargo" in scheduled air passenger flights. 40%-50% The "air eligibility" of specific cargo shipments refers to the compatibility of the product/shipment characteristics with the economic benefits of air transport All cargo carriers most often deal with ______________ to schedule their air cargo traffic. Freight Forwarders This non-profit association is the only organization that represents all segments of the air freight supply chain. TIACA The FAA's roles and responsibilities include encouraging and developing civil aeronautics and new technology, developing and operating a system of air traffic control and navigation, AND research and development of the National Airspace System and civil aeronautics This company is employed by the airlines to publish fares and cargo rates to the travel industry (such as freight agents) ATPCO This organization serves as the premier trade representative for U.S. scheduled airlines and as an authoritative source of information on cargo matters. A4A After a new aircraft has passed ground and flight tests, the aircraft must receive a series of certificates before it can be mass produced and sold to the public. An Airworthiness Certificate Shows that the aircraft is safe to fly This association represents distributors and manufacturers of aviation parts on issues of federal legislation and other government activities ADMA This company has provided schedule and flight statistics information and analytical services to the passenger and air cargo industries since 1929. OAG A passenger aircraft undergoing conversion to a cargo freighter configuration would require this type of certificate if the design changed its operating parameters and limitations. Supplemental Type Certificate The Airport Improvement Program (AIP) provides grants for improvements to public-use airports. These funds can be used to: improve or expand access or load-bearing capacity for a cargo ramp that is accessible by all tenants This corporation settles airline interline accounts on a net basis each month Airline Clearing House This is an international organization aimed at promoting the planning and development of international air transportation. Its main focus is setting standards for the safe flow of air transport. ICAO Incorporated as non-governmental organization in 2011, it is the world's leading association for shippers (importers and exporters) engaged in international trade. GSF This organization is primarily concerned with the coordination of tariffs, fares, rates and charges by providing a forum for member states to discuss these matters. It currently represents 93% of the world's international schedule traffic. IATA The NTSB is required to determine the probable cause of which of the following? Accidents involving all modes of transportation The FAA's primary focus is Ensuring safe and orderly growth of civil aviation Under the Transportation Security Act signed into law November 2001 Airport security became a direct federal responsibility Founded in Vienna, Austria in 1926, this non-governmental organization in the world's largest NGO in transportation and represents more than 40,000 forwarding and logistics firms in over 150 countries. FIATA This administration is responsible for conducting a long-term data collection program on passenger and freight movement Bureau of Transportation Statistics This association is dedicated to representing and serving the interests of member Part 121 and Part 135 cargo carriers. RACCA This organization represents the interests of commercial airports globally. Airport Council International The Airport Development Aid Program (ADAP) provides grants for planning projects of master plans at individual airports. Another airport planning grant the ADAP provides for is: The development of regional airport system programs Which document attest to the correctness of the description, quantity, and value of goods shipped into a country? Customs import declaration Which of the following DO NOT include the roles of a freight forwarder? Pay for half of transportation costs What explains the air cargo industry's lack of a universal standard for electronic documents? There is a not a universal electronic standard for customs documents What was the size of the global logistics market in 2017 and what percentage was comprised by air freight? $5 trillion, 2% Which document details every item contained in a shipment? Cargo manifest Which transportation document serves as the contract between the shipper and the carrier for transportation of freight to a specified destination? Air Waybill Which global freight forwarding companies are not typically in the top five performers, by tonnage handled? FedEx, Maersk Logistics What percentage of time does a shipment by air freight actually spend airborne? 10% Which type of logistics provider did manufacturers turn to when outsourcing their transportation, storage, and handling requirements? 2PL Which document provides the individual breakdown for each part of a consolidated shipment? House Waybill The historical key drivers of changes to the forwarding and handling industry include customs requirement, IATA initiatives, competition with integrated carriers, AND new security requirements What IATA initiative has standardized the transmission of cargo transportation documentation in electronic form, as of 2019? eAWB Which of the following DO NOT include the roles of a freight forwarder? Approve customs declarations of the shipper Which type of logistics providers integrated directly into their customer's supply chains, providing customized logistics solutions? 3PL Which international conventions set the rules and regulations for carriage of people and cargo, and the documentation required? Warsaw 1923, Montreal 1999 The roles of a Ground Handling Agent include build-up and breakdown of pallets and containers, weighing shipments, AND providing temporary warehouse storage as required The roles of a Ground Handling Agent include receiving and preparing shipments, unloading and loading aircraft, AND verifying/forwarding required documents What explains the air cargo industry's lack of a universal standard for electronic documents? There is a not a universal electronic standard for customs documents UPS was founded in 1907, as a service before expanding into "time-definite-package" service and the supply chain freight business. private messenger FedEx perfected the system of distribution which air cargo transportation that flies packages to a central location for sorting and then flow back out to their destination for delivery. hub and spoke Integrators leverage a network of air cargo transportation that flies packages to a central location for sorting and then flow back out to their destination for delivery. hub and spoke DHL no longer provides service within the US because of U.S. legal requirements on percentage of ownership. domestic Which of the following is NOT a potential advantage of Amazon taking more direct control of transporting its shipments vice relying on third party delivery? domination of the air express market Key elements of the Integrated Carrier business model include door-to-door service, guaranteed delivery time, AND fast and reliable transport Key elements of the Integrated Carrier business model include door-to-door service, fast and reliable transport, AND guaranteed delivery time What is the potential annual saving in shipment costs for Amazon by taking direct control and operations of transportation of shipments? $2 billion DHL was founded in 1969 as a document shipment company but was acquired by in 2009. Deutsche Post The main U.S. hubs for FedEx, UPS, and DHL are Memphis (MEM), Louisville (SDF), and Cincinnati/No. Kentucky (CVG) ___________________ and ___________________ also operate heavily in the global logistics service business lines. DHL, UPS What are the key advantages of using a hub and spoke network of air transportation? fewer flights required, and less fuel consumed FedEx was founded in 1971, providing service for letters and small packages. overnight express Which of the following is NOT an advantage of Passenger airlines utilizing belly cargo space? freighter aircraft increase revenue stream Which Combination airline relied on passenger belly capacity the most in 2016? Air France-KLM Group What is the key distinguishing factor between Passenger airlines and Combination airlines? Passenger airlines rely on belly capacity for cargo vice freighter aircraft The COVID-19 pandemic has reduced passenger air travel by nearly 80%, from July 2019 to July 2020. What accounts for the increase in air freight rates by nearly 30% generating near record highs in revenue? reduction of system capacity to meet current demand due to loss of belly-cargo space What is the percentage of Combination carriers and Passenger carriers (respectively) in the Top 25 cargo carriers by FTK for 2019? 48% / 16% Which Combination airline relied on freighter capacity the most in 2016? Korean Airlines What percentage of global scheduled FTKs was provided by Combination carriers (passenger and freighter aircraft) in 2016? 55% What percentage of cargo was carried in the belly cargo space of all passenger and combination airlines in 2016? 49% Disadvantages of belly cargo carriage by Passenger airlines include limited overall size and space that drive carriage to smaller express shipments AND routes are driven by passenger vice cargo demand Which of the following is NOT an advantage of Combination airlines? Marginal cost to belly-cargo as most of cost sunk in transporting passengers What is the key distinguishing factor between Combination airlines and Passenger airlines? Combination airlines operate freighter aircraft as division or subsidiary of parent airline Which of the following is NOT an advantage of Combination airlines? Millions of daily flight departures around the globe Disadvantages of belly cargo carriage by Passenger airlines include limited overall size and space that drive carriage to smaller express shipments AND cargo must be handled at the passenger gate within a 30-minute turnaround window All-Cargo (Dedicated) carriers are more negatively affected by directional imbalance of traffic because carriers can't compensate for loss of revenue with passenger traffic in weak sectors What is the industry breakdown of international and domestic traffic generated by the All-Cargo (Dedicated) carriers? 12.4%, 3.8% All-Cargo (Dedicated) carriers are similar to Integrated carriers in that they both use freighter aircraft to move cargo. Some All-Cargo (Dedicated) Carriers provide service through the ACMI model, which stand for Aircraft, Crew, Maintenance, Insurance. The majority of All-Cargo traffic is by routes. international, long-haul All-Cargo (Dedicated) carriers are similar to Combination carriers in that they both use freighter aircraft to move cargo. Under what business model does Atlas Air provide All-Cargo service to Amazon? CMI The three types of All-Cargo (Dedicated) carrier business model service include Scheduled, Charter, ACMI. Charter All-Cargo carriers provide service through On-Demand contracted basis. All-Cargo (Dedicated) carriers attempt to offset the impact of directional imbalance by to reach break-even load factors. designing big circular routes with multiple commercial stops Amazon began a 10-year agreement to provided CMI service with Amazon Air in what year? 2016 Scheduled All-Cargo carriers provided service through pre-planned routes and departure times. Key factors that impact a cargo airline's decision on the location of a hub include a central location to minimize total transportation costs, a strong connection to feeder air service and other modes of transportation, AND proximity to manufacturing and consumption centers One "targeted" marketing channel that can be used to position your cargo services in the minds of shippers would be supply chain trade journals The risk assessment/risk management approach to resolving the high loan rate/low ROI paradox of modern air cargo development investment includes the use of compensatory ratemaking methodology In setting objectives for the air cargo development plan, two key principles the plan must focus on include "capitalizing on unique strengths (niche)" and " _____ ." deficiencies over which the airport has influence The _____ category of initial marketing forms can be described as "business meeting held in the office." informational In 2009 _____ automotive group build a new plant in western Georgia just 50 road miles away from KATL. A major consideration for this location was the "supply chain/logistics effect" and the availability of JIT cargo flow operations. As a direct result, _____ added additional flights into KATL, and _____ began daily dedicated air freight flights- resulting in over _____ dollars annual economic impact! Kia, KAL, ASIANA, 4 billion The "Residual Ratemaking Methodology" is based primarily on sharing development risk with airline tenants The primary target of the services offered by the Cargo Marketing Plan are _____ . shippers The rise of the "Supply Chain Management" philosophy in logistics has resulted in the competitiveness of air freight (vs. other modal choices) to improve significantly and broaden in scope The "Compensatory Ratemaking methodology" is based primarily on the assumption that increased tenant fees charged by the airport will not discourage occupancy/activity Two promising "Air Cargo Development Strategies" include the _____ and _____ approaches. Third Party, Joint Venture