CTS CTS Carrier Selection & Contract Management 2 — Questions and Answers
Question 1: What is a fuel surcharge (FSC) in carrier contracts?
- A penalty for late deliveries
- A variable rate adjustment added to base freight rates to offset fluctuating diesel fuel costs (Correct answer)
- A tax collected by the US government
- An insurance premium for hazardous freight
Correct answer: A variable rate adjustment added to base freight rates to offset fluctuating diesel fuel costs
A fuel surcharge is a variable add-on to base freight rates that adjusts automatically based on the current diesel fuel price, usually indexed to the US DOE weekly average.
Question 2: What does 'accessorial charges' refer to in freight billing?
- Basic line-haul transportation rates
- Additional charges for services beyond standard pickup and delivery, such as liftgate, inside delivery, or detention (Correct answer)
- Government-mandated safety fees
- Driver overtime compensation
Correct answer: Additional charges for services beyond standard pickup and delivery, such as liftgate, inside delivery, or detention
Accessorial charges are fees carriers add for extra services or circumstances beyond standard transit, including liftgate service, residential delivery, detention, and redelivery.
Question 3: What is 'detention' in trucking contract terms?
- A carrier safety violation hold
- A charge billed by carriers when a driver waits beyond the free time allowed at a shipper or consignee facility (Correct answer)
- A delay caused by weather
- A government customs hold on freight
Correct answer: A charge billed by carriers when a driver waits beyond the free time allowed at a shipper or consignee facility
Detention is a fee charged to shippers or receivers when a driver is held at a facility beyond the contractually agreed free time, typically 2 hours, during loading or unloading.
Question 4: Which clause in a carrier contract defines the process for filing and resolving freight damage claims?
- Indemnification clause
- Cargo claims and liability clause (Correct answer)
- Force majeure clause
- Termination clause
Correct answer: Cargo claims and liability clause
The cargo claims and liability clause specifies the carrier's liability limits, the timeframe for filing claims, the documentation required, and the resolution process for freight loss or damage.
Question 5: Under the Carmack Amendment, what is a common carrier's standard liability for cargo damage in the US?
- No liability unless negligence is proven
- Full actual value of the damaged cargo (subject to declared value and released rates) (Correct answer)
- A flat $500 maximum per shipment
- Liability only for LTL shipments
Correct answer: Full actual value of the damaged cargo (subject to declared value and released rates)
The Carmack Amendment establishes that common carriers are liable for the full actual loss of damaged or lost cargo, though liability can be limited by contract through released rates or declared value provisions.
Question 6: What is a 'spot market' rate in trucking?
- A discounted rate for regular contract shippers
- A one-time, market-based rate negotiated for a single shipment when contract capacity is unavailable (Correct answer)
- A rate set by the US government
- A rate for expedited overnight delivery
Correct answer: A one-time, market-based rate negotiated for a single shipment when contract capacity is unavailable
Spot market rates are negotiated individually for single shipments, reflecting current supply and demand conditions rather than pre-negotiated contract rates.
CTS CTS Carrier Selection & Contract Management 2
What is a fuel surcharge (FSC) in carrier contracts?