Question 1:

1. Compare and contrast the transportation principles of economy of scale and economy of distance. Illustrate how they combine to create efficient transportation.

2. What is the economic justification for the rapid growth of premium package services?

3. Railroads have the largest percentage of intercity freight ton-miles, but motor carriers have the largest revenue. How do you explain this relationship?

4. The five basic modes of transportation have been available for well over 50 years. Is this the way it will always be, or can you identify a sixth mode that may become economi¬cally feasible in the foreseeable future?

5. Seven economic drivers that influence transportation cost were presented. Select a spe¬cific product and discuss how each factor impacts determination of freight rate.

6. What is the purpose of freight classification? Describe the differences between a rate and a rating. How do they relate to classification?

Question 2:

1. Do you believe it will be 2014 or beyond before we can be assured that the majority of all containers inbound to U.S. ports will be security screened at loading ports? What actions could you propose to rectify this dilemma?

2. What is your position on the approval of the Alliance Network's, collective LIZ rate making? What might be the longer-term implications of such collaboration?

3. What in your opinion will be the major impact of the Walmart decision to purchase FOB from its suppliers? The current stated objective is to reduce transportation costs on freight inbound to Walmart's distribution centers. How might the business relationship be impacted if at some future time Walmart decides to bypass its distribution centers and move merchandise direct from suppliers to its retail stores?

4. Supporters of LTL cube rates feel traditional pricing methods are overcomplicated and reduce transportation efficiency. As a newly minted logistics graduate, assume your employer asks for your evaluation of the traditional versus cubic-based Lit pricing. State your position as either a shipper or a carrier.