CTS CTS Carrier Selection & Contract Management 1 — Questions and Answers
Question 1: What is the primary purpose of a carrier Request for Proposal (RFP) in transportation?
- To report a carrier safety violation
- To solicit competitive bids from carriers for freight lanes or services (Correct answer)
- To file a freight claim
- To request a carrier's insurance certificate
Correct answer: To solicit competitive bids from carriers for freight lanes or services
A carrier RFP is a formal process where shippers invite carriers to submit rate bids and service proposals for specific freight lanes or transportation needs.
Question 2: Which carrier performance metric measures the percentage of shipments delivered on or before the promised date?
- Tender acceptance rate
- On-time delivery (OTD) rate (Correct answer)
- Claims ratio
- Empty mile percentage
Correct answer: On-time delivery (OTD) rate
On-time delivery (OTD) rate tracks the percentage of shipments that arrive at their destination by the committed delivery date, a key service quality indicator.
Question 3: What does 'tender acceptance rate' measure in carrier management?
- The percentage of loads a carrier accepts when offered by a shipper (Correct answer)
- The speed at which a carrier responds to rate requests
- The number of new carrier contracts signed
- A carrier's fuel efficiency rating
Correct answer: The percentage of loads a carrier accepts when offered by a shipper
Tender acceptance rate measures the percentage of load tenders (shipment offers) that a carrier agrees to haul, reflecting carrier reliability and capacity availability.
Question 4: What is a transportation contract's 'minimum volume commitment' clause?
- A cap on maximum freight weight
- A guaranteed minimum amount of freight a shipper will provide to a carrier over the contract period (Correct answer)
- A driver minimum wage requirement
- A fuel surcharge floor
Correct answer: A guaranteed minimum amount of freight a shipper will provide to a carrier over the contract period
A minimum volume commitment clause obligates the shipper to tender a specified minimum amount of freight to the carrier, giving carriers predictable revenue in exchange for contracted rates.
Question 5: Which factor is most important when evaluating a carrier's safety rating for US highway transportation?
- Carrier's fleet age
- FMCSA Safety Measurement System (SMS) scores and USDOT safety rating (Correct answer)
- Number of trucks owned
- Years in business
Correct answer: FMCSA Safety Measurement System (SMS) scores and USDOT safety rating
FMCSA SMS scores and the official USDOT safety rating (Satisfactory, Conditional, or Unsatisfactory) are the primary measures of a carrier's safety compliance in the US.
Question 6: What is the difference between a primary and backup carrier in a routing guide?
- Primary carriers handle large shipments; backup carriers handle small ones
- Primary carriers get first tender at contracted rates; backup carriers are used if the primary declines or is unavailable (Correct answer)
- Primary carriers are domestic; backup carriers handle international freight
- There is no practical difference
Correct answer: Primary carriers get first tender at contracted rates; backup carriers are used if the primary declines or is unavailable
A routing guide assigns primary carriers first right of refusal at negotiated rates, with backup (secondary) carriers activated when the primary declines or cannot service the lane.
CTS CTS Carrier Selection & Contract Management 1
What is the primary purpose of a carrier Request for Proposal (RFP) in transportation?