CLP Transportation & Distribution 5 — Questions and Answers
Question 1: A hazardous materials shipment requires the use of a placard. Under DOT regulations, who is responsible for providing the placard to the carrier?
- The receiving consignee
- The shipper/offeror (Correct answer)
- The carrier's dispatcher
- The freight broker
Correct answer: The shipper/offeror
Under 49 CFR, the shipper (offeror) is responsible for providing the appropriate placards to the carrier before tendering hazardous materials.
Question 2: Which ocean carrier contract arrangement gives a shipper discounted rates in exchange for committing a minimum volume over a contract period?
- Spot rate agreement
- Service contract (Correct answer)
- Open-book contract
- Master service agreement
Correct answer: Service contract
Ocean service contracts lock in rates and capacity for shippers who commit to a minimum volume over a specified time, benefiting both parties.
Question 3: A company is comparing total transportation costs. Which cost is typically NOT included in total cost of transportation analysis?
- Freight charges
- Inventory carrying costs in transit
- Packaging costs for shipment
- Employee training for unrelated HR programs (Correct answer)
Correct answer: Employee training for unrelated HR programs
Total cost of transportation includes freight, transit inventory, packaging, and handling—not unrelated HR or training expenses.
Question 4: Which type of carrier is obligated to serve all shippers who request service at published tariff rates without discrimination?
- Contract carrier
- Exempt carrier
- Common carrier (Correct answer)
- Private carrier
Correct answer: Common carrier
Common carriers must serve the general public at published rates without unreasonable discrimination, unlike contract or private carriers.
Question 5: Intermodal transportation most commonly refers to combining which two modes?
- Air and pipeline
- Truck and rail (TOFC/COFC) (Correct answer)
- Barge and air
- Rail and pipeline
Correct answer: Truck and rail (TOFC/COFC)
Intermodal most commonly refers to combining truck and rail—trailer on flatcar (TOFC) or container on flatcar (COFC)—to leverage benefits of both modes.
Question 6: A logistics manager negotiates a fuel surcharge mechanism tied to the DOE weekly retail diesel index. This approach is best described as:
- A fixed-rate fuel contract
- A floating index-linked fuel surcharge (Correct answer)
- A fuel hedging derivative
- A lane-based fuel exemption
Correct answer: A floating index-linked fuel surcharge
Linking the fuel surcharge to a published index like the DOE diesel index creates a floating adjustment that automatically reflects market fuel prices.
Question 7: Which distribution network design minimizes total inventory investment while potentially increasing transportation costs?
- Highly decentralized network with many regional DCs
- Centralized network with few DCs serving large areas (Correct answer)
- Dedicated DC per retail store
- Forward-deployed safety stock at every customer site
Correct answer: Centralized network with few DCs serving large areas
Centralizing inventory in fewer DCs reduces safety stock requirements through risk pooling but increases outbound transportation distances and costs.
CLP Transportation & Distribution 5
A hazardous materials shipment requires the use of a placard.
Under DOT regulations, who is responsible for providing the placard to the carrier?