Parcel Industry Overview
24 Questions
0 Views

Parcel Industry Overview

Created by
@CheeryJasper8928

Podcast Beta

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which factor is NOT typically used to determine the mode selected for a shipment?

  • Required Transit Time
  • Product Characteristics
  • Destination Country (correct)
  • Shipment Size/Weight
  • What is often excluded from the Bill of Lading (BOL)?

  • Commodity Details
  • Price (correct)
  • Shipping Notifications
  • Tracking Number
  • Which mode of transportation generally has the highest cost but offers faster speeds?

  • Truck
  • Maritime (Ocean)
  • Rail
  • Air Freight (correct)
  • Which of the following best describes a 'commodity' in shipping terms?

    <p>Physical items that are shipped in commerce</p> Signup and view all the answers

    What is a common characteristic of contract rates compared to spot rates in shipping?

    <p>They offer guaranteed service levels.</p> Signup and view all the answers

    Which type of fees can affect freight rates in addition to base costs?

    <p>Fuel Charges</p> Signup and view all the answers

    Which of the following best defines a 'shipper' in a transportation context?

    <p>The party that tenders or ships the goods for transportation</p> Signup and view all the answers

    What is the primary purpose of the Bill of Lading?

    <p>To serve as a contract of carriage</p> Signup and view all the answers

    What primarily drives transportation pricing within a mode?

    <p>Capacity &amp; Shipping Volume</p> Signup and view all the answers

    What defines the cargo-carrying capacity of line-haul vehicles?

    <p>Federal/state maximum weight limits</p> Signup and view all the answers

    What is a typical Operating Ratio for Less Than Truckload (LTL) carriers?

    <p>Between 93 and 96</p> Signup and view all the answers

    Which of the following is NOT a method used in differential pricing?

    <p>Shipping Distance</p> Signup and view all the answers

    What are the two largest costs for carriers and private fleets?

    <p>Driver Wages &amp; Fuel</p> Signup and view all the answers

    What is the main service characteristic that drives price across transportation modes?

    <p>Speed</p> Signup and view all the answers

    What is the Operating Ratio formula used to calculate?

    <p>(Operating Expenses / Operating Revenue) x 100</p> Signup and view all the answers

    Which vehicle type is primarily used for nimble pickup and delivery within a city?

    <p>City (Straight) Vehicle</p> Signup and view all the answers

    What factor contributes to the variation in truckload rates when traveling in opposite directions between two markets?

    <p>Lower backhaul demand</p> Signup and view all the answers

    Which two companies have historically been the top parcel carriers in the US, outside of USPS?

    <p>FedEx and UPS</p> Signup and view all the answers

    What service was crucial for the growth of the parcel industry?

    <p>Charging a premium for guaranteed 1 day and 2 day delivery</p> Signup and view all the answers

    How are parcel rates generally determined by carriers?

    <p>Weight of shipment and destination zone</p> Signup and view all the answers

    What types of transit services do parcel carriers usually offer?

    <p>Air services, same day, 1 day, and ground services</p> Signup and view all the answers

    Which of the following is a common surcharge imposed by parcel carriers?

    <p>Delivery area surcharge</p> Signup and view all the answers

    What percentage of all retail sales does online shopping account for?

    <p>Over 16%</p> Signup and view all the answers

    What is the predicted growth of US parcel volume from 2019 to 2028?

    <p>A doubling in volume</p> Signup and view all the answers

    Study Notes

    Contract Rates

    • Customized agreements between shippers and carriers for specific routes.

    Backhaul Rates

    • Lower than forward haul rates due to lower demand.
    • Carriers aim to cover costs on backhauls, often operating with empty trucks.

    Parcel Shipments

    • Limited to under 150 lbs.

    Top Parcel Carriers

    • FedEx and UPS historically dominate the market.

    Parcel Industry Growth

    • Fueled by premium guaranteed delivery services (1-day and 2-day).

    Parcel Rate Quoting

    • Based on weight (rounded up to the next pound) and destination zone.

    Parcel Transit Services

    • Air Services: Expensive, with guaranteed on-time delivery.
      • Same-day (very expensive)
      • 1-day (Early AM, Mid-morning, End of day)
      • 2-day (Early AM, End of Day)
      • 3-day
    • Ground: Less expensive, 3-5 day delivery from origin.
    • Parcel Post: Least expensive, not guaranteed, 3-9 day service from origin.

    Parcel Weight Increments and Charging

    • Rates increase with higher weight and zone numbers.

    Parcel Surcharges

    • Used by carriers to recover margins:
      • Fuel Surcharge
      • Residential delivery surcharge
      • Peak/pandemic surcharge
      • Delivery area surcharge (extended zip codes)
      • Oversized/DIM charges (odd-sized or underweight cartons)
      • Third-party billing fee

    Online Retail Growth

    • Over 16% of all retail sales happen online.

    Parcel Volume Growth

    • Expected to nearly double (2x) from 2019 to 2028.

    Amazon Logistics

    • Amazon now delivers more packages in the US than FedEx and UPS.
    • Amazon Air has a fleet of around 100 aircraft.

    Regional Parcel Carriers

    • Smaller than UPS and FedEx, serving specific geographical areas.

    Warehouse Automation Systems

    • Receiving/Shipping: Autonomous Guided Vehicles (AGV), robots for conveyor systems, automated loading and unloading systems.
    • Pallet & Case Movement: AGV, de-palletizers, conveyors, bin shuttles, pallet shuttles.
    • Storage: Bin carousels, Automated Storage and Retrieval Systems (AS/RS) with stacker cranes.
    • Picking: Conveyors, AGV, picking robots.

    Shipping Terminology

    • Carrier: A company that transports goods via land, sea, or air.
    • Shipper: The party that tenders or ships the goods for transportation.
    • Consignee: The party to whom goods are shipped and delivered.
    • Commodity: The product being shipped.

    Orders vs. Shipments

    • Order: A request for goods or services.
    • Shipment: An amount of goods sent together to a location.

    Bill of Lading (BOL)

    • A transportation document containing the contract of carriage between shipper and carrier.
    • Includes: Shipper, carrier, consignee, tracking number, freight terms, order number shipped, commodity shipped.
    • Typically does not include price.
    • One BOL corresponds to one shipment, consisting of one or more orders and commodities.

    Key Factors in Mode Selection

    • Shipment size/weight
    • Required transit time (speed)
    • Product characteristics
    • Cost

    Mode Comparison (Speed & Cost)

    • Air freight: , 3-5 days
    • Truck: $$$, 3-5 days
    • Rail: $$, 5-15 days
    • Maritime (Ocean): $, 30-45+ days

    Maximum Weight for a Truck

    • 80,000 lbs.

    Motor Carrier Equipment Vehicles

    • Line Haul: Long-distance hauls between cities, typically tractor-trailer combinations with 3+ axles.
    • City (Straight): Used within a city for nimble pickup and delivery, smaller single-unit vehicles.

    Transportation Pricing Drivers

    • Service characteristics (speed being a major driver).
    • Capacity & Shipping Volume:
      • Capability (supply): Number of drivers, tractors, trailers/containers, cargo ships, cargo aircraft.
      • Shipping Volume (demand): Driven by shipping demand.

    Top Carrier Costs

    • Driver wages and fuel.

    Operating Ratio

    • A measure of operating efficiency and financial viability.
    • Calculated: (Operating expenses / operating revenue) x 100.
    • LTL normal levels: 93-96.
    • TL normal levels: High 80s to low 90s.

    Differential Pricing

    • Charging different prices to different customers based on:
      • Time (seasonal)
      • Individual person
      • Place
      • Commodity

    Market Intelligence for Shippers

    • Shippers can use market intelligence to combat carrier use of differential pricing.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Related Documents

    Description

    This quiz covers key concepts in the parcel shipping industry, including contract rates, backhaul rates, and transit services. Test your knowledge on top carriers like FedEx and UPS, as well as the factors influencing parcel shipment pricing and growth rates.

    More Like This

    Air Parcel and Lapse Rate Quiz
    10 questions
    Air Parcel Stability Quiz
    4 questions
    取件和配送流程
    10 questions

    取件和配送流程

    GracefulHoneysuckle avatar
    GracefulHoneysuckle
    Objeto Social de Correos Express
    10 questions
    Use Quizgecko on...
    Browser
    Browser