SCMN 3720 Test 2 Questions and Answers Already Passed

SCMN 3720 Test 2 Questions and Answers Already Passed What drives transportation pricing across the modes? service characteristics drive price (accessibility, speed, reliability, capability, and cost/lb) What service characteristic is the major driver of price across modes? speed What primarily drives transportation pricing within the mode? -Capacity (Supply) Number of Drivers, Tractors,Trailers/Containers, Cargo Ships, Cargo Aircraft -Shipping Volume (Demand) Driven by demand for consumer and industrial product What are the two largest costs for carriers and private fleets? driver wages and fuel What is Value-of-Service pricing based on? pricing is based on what the market will bear What is differential pricing and what are the four types? can be done based on several methods of segregating the buyers into distinct groups. -By time: seasonal -By individual person: you don't know what your peers pay -By place: you don't know what your peer in another city pays -By commodity: you don't know what your peer pays in another industry What can shippers use as the most effective way to gather freight market intelligence to combat a carrier's use of differential pricing? Shipper Consortiums- Typically a subscription-based service where shippers participate by providing transaction-level data on a defined cadence, ranging from weekly to annually. -DAT: Shippers pay a fee and provide their own rates and costs, which are then added and shared anonymously with other members What commodity classification factors are used to determine the rating of a specific commodity? -product density -stow-ability and handling -liability What three things are custom contracted rates based on? 1) the shipper's origin & destinations 2) the type of product shipped 3) the volume by lane (origin/destination). How is fuel typically handled in freight rates? Fuel charges are usually an add-on to the contracted rates tied to a published department of energy (DOE) diesel fuel index. Describe some examples of custom contracted rates for TL & LTL. -Truckload - Point-to-Point Flat Rate by lane (origin/destination) -Truckload Per-Mile Rates - Typically by lane (origin/destination) -LTL rates could be a discount on published (CZAR LITE) tariff rates -LTL cost per pound - Typically by lane What is a spot rate, when are they used, and how are they different than contracted rates? Spot rate: are on-demand, transactional rates for a shipper to move freight right now (or with a very short lead time) from a specific origin and destination. -They are one-time in nature and are the rates quoted to the shipper from the carrier or the broker. -Usually the freight being moved in the spot market is from shippers with inconsistent shipping patterns (i.e. lumpy, nonlinear or non-forecastable demand) or on inconsistent lanes. -contract rates: are set of rates for a period of time, negotiatied in a bidding process based on estimated shipping volume. Rates are customized Why would a truckload rate be less expensive for the same distance traveling in the opposite direction between two markets? -Truckload rates are one-way -price for the same distant varies greatly because of the low demand What two elements are parcel rates based on? weight and zones Describe the early history of the railroad industry. -Dominant mode from 1850s to World War II, playing a pivotal role in U.S. economic development. Domination began to wane after 1920 due to: -Public funding for roads, inland waterways, and air transport -Changes in economy and shipper service-related needs -Financial plight and economic regulation What was the impact of the 1980 Staggers Rail Act? since deregulation prices have come down 44% What are the attributes that limit Rail's market share? -Limited Accessibility: Rail cannot pick up and