Supply Chain Management Transportation 5 — Questions and Answers
Question 1: A shipper receives a freight invoice with a 'fuel surcharge' line item. What index do most US trucking carriers use to calculate this surcharge?
- NYMEX crude oil futures price
- US Department of Energy (DOE) weekly retail diesel price (Correct answer)
- AAA national average gasoline price
- EIA natural gas spot price
Correct answer: US Department of Energy (DOE) weekly retail diesel price
Most US carriers use the DOE's weekly national average on-highway diesel fuel price as the benchmark for calculating fuel surcharges.
Question 2: Which risk management strategy involves a shipper maintaining contracts with both primary and backup carriers for the same lane?
- Carrier diversification
- Dual sourcing
- Routing guide depth (Correct answer)
- Load splitting
Correct answer: Routing guide depth
Routing guide depth refers to having primary, secondary, and tertiary carriers on a lane so capacity is available when the primary carrier declines.
Question 3: Under US Customs regulations, an 'Importer Security Filing' (ISF, or '10+2') must be submitted at least how many hours before vessel departure from a foreign port?
- 12 hours
- 24 hours
- 48 hours (Correct answer)
- 72 hours
Correct answer: 48 hours
US Customs requires ISF (10+2) data to be filed at least 24 hours before cargo is loaded onto a vessel bound for the US.
Question 4: A company shifts from truckload to intermodal rail for long-haul lanes over 1,000 miles. What is the primary trade-off?
- Higher cost but lower transit time
- Lower cost but longer and less predictable transit times (Correct answer)
- Improved visibility but higher fuel surcharges
- Better on-time performance but limited capacity
Correct answer: Lower cost but longer and less predictable transit times
Intermodal rail is typically 10-20% cheaper than truckload for long hauls but adds 1-2 days of transit time with more variability.
Question 5: What does the term 'deadhead miles' refer to in trucking?
- Miles driven over the legal axle weight limit
- Miles a truck travels empty without a paying load (Correct answer)
- Miles accumulated by a driver after their HOS reset
- Miles driven on unpaved or off-highway routes
Correct answer: Miles a truck travels empty without a paying load
Deadhead miles are miles driven with an empty trailer, representing lost revenue and pure cost for the carrier.
Question 6: Which transportation performance metric measures the percentage of shipments that arrive within the agreed delivery window?
- Fill rate
- On-time in full (OTIF) (Correct answer)
- Perfect order rate
- Carrier scorecard compliance
Correct answer: On-time in full (OTIF)
OTIF (On-Time In Full) measures whether shipments arrive on time and with the complete quantity ordered, often tied to retailer compliance fines.
Question 7: A company is evaluating a 'private fleet' versus 'common carrier' strategy for its distribution. The primary advantage of operating a private fleet is:
- Lower capital investment and fixed costs
- Greater control over service levels, branding, and scheduling (Correct answer)
- Access to a broader carrier network for surge capacity
- Elimination of all regulatory compliance requirements
Correct answer: Greater control over service levels, branding, and scheduling
A private fleet gives companies direct control over delivery schedules, driver appearance, customer service, and branded vehicles.
Supply Chain Management Transportation 5
A shipper receives a freight invoice with a 'fuel surcharge' line item.
What index do most US trucking carriers use to calculate this surcharge?