Railroad Final Exam Complete
Questions With Solutions
Decline in rail freight rates CORRECT ANSWERS •Rail freight revenue/ton declines
27% (inflation adjusted) from 1992-2001
•Coal and grain rates decline- major commodities shipped on railroads
Increase in intermodal traffic (picture- taking trailer off truck or ship, putting on railroad,
hauling certain distance, back on truck): Piggyback service (truck and rail together) ON
EXAM CORRECT ANSWERS •directed to non-bulk, manufactured products
•Up 300% from 1980-2001
•RRs create dedicated intermodal trains with regularly scheduled departures and priority
operating schedules to improve on-time delivery
•Trailer-on-flatcar (TOFC) and container-on-flatcar (COFC) service
Trailer on Flat Car (TOFC) CORRECT ANSWERS Schneider Trailers- wheels set car
onto railroad track (locked down), can take It off, truck can haul it off and continue
journey
Container on a Flatcar (COFT) CORRECT ANSWERS Doesn't have wheels, actually
come on ships (tracks to set them on to haul them to final destination)
What are the advantages of intermodal service? CORRECT ANSWERS lower cost than
truck, more reliable than average train, lower transit times, more accessible to people
(combining cost efficiency of railroad long-haul with flexibility of truck and pickup
delivery service)
Decrease in train accidents CORRECT ANSWERS Down 60% from 1980-2001
Functional classification of carriers CORRECT ANSWERS Class I (operating revenue of
at least $346.8 million in 2006)
•BNSF Railway
•Canadian National Railway
•Canadian Pacific Railway
•CSX Transportation- B&O Railroad
•Kansas City Southern Railway
•Norfolk Southern
•Union Pacific Railroad
-Regional (linehaul of at least 350 miles of revenue of between $40 million and the
Class I threshold)
-Local linehaul (less than 350 miles and revenue less than $40 million per year)
-Switching and terminal (S&T)
,Intermodal CORRECT ANSWERS between modes
from railroad to truck or vice versa, or ship involved
intensity depends on where going in US =, little more intense, take truck and get
container off ship and take it to railroad of choice
offering good service, cheaper per mile, haul long distance and save money overall
•Intense - see alternative measures of market share
•Railroads adapt service and pricing
Intramodal CORRECT ANSWERS between railroads
switching, didn't go to everyone on map
not super intense if not same location
not easy to enter industry, have to have a lot of different cars and terminals so
expensive
•Differentiated oligopoly, few places served by multiple railroads- hard to enter, not
many doing it
•Large financial barriers to entry on a large scale - even small railroad would be
expensive
Principal commodities hauled on railroads CORRECT ANSWERS •Coal- primary
haulers
•Farm products- grains
•Chemicals- safer than highways
•Transportation equipment (not a bulk commodity)
Traffic shifts CORRECT ANSWERS growth of intermodal freight traffic
Constraints of the Railroad Industry ON EXAM CORRECT ANSWERS -Fixed rights-of-
way- if shipper or receiver doesn't own sightings, another mode of transportation is
required to complete that shipment (if don't have a way to stop and offload
merchandise, somebody else has to get it)
-Service limitations- shipment across country may require several different railroads to
handle merchandise, different railroads own different parts of country, expensive to
change railroads several different times
Strengths of the Railroad Industry CORRECT ANSWERS -Large carrying capacity, few
size or weight constraints
-Handle almost any type of cargo
-Assumption of liability for damage- rough train ride (steel)
, -Intermodal services and other new technologies
-A public benefit from rail: reduced road congestion and road damage- railroad
maintains own tracks so we don't have to repair
Tank car CORRECT ANSWERS specialize, transport liquid and gases
Gravity Discharge Hopper Car CORRECT ANSWERS hopper car but helps happen
naturally
Flatcar CORRECT ANSWERS freight car with no top or sides, hauls equipment or
intermodal freight
Hopper Car CORRECT ANSWERS freight car with floor sloping, use hinge doors to
discharge bulk materials
freight car with floor sloping to 1 or more hinged doors used to discharge bulk materials-
coal without lid or top
Covered Hopper Car CORRECT ANSWERS roof designed to transport bulk
commodities that need protection from elements
Boxcar CORRECT ANSWERS plain is standardized roof freight car with sliding doors
on side
Gondola CORRECT ANSWERS no top, flat bottom, fixed size, used primarily for
hauling bulk commodities
Specialized Box Car CORRECT ANSWERS specialized merchandise like auto parts
Refrigerated Car CORRECT ANSWERS refrigeration equipment
Carloading CORRECT ANSWERS declining due to increasing average car size,
improving carload productivity
RRs own and maintain most rolling stock CORRECT ANSWERS different from some
large trucking companies
Non-railroad companies own 37%, growing
30% of costs do not vary with volume- operate own rolling stock so fixed costs
Railroads High % of indirect fixed costs in short run (capacity remains fixed) CORRECT
ANSWERS High % of long-lived (durable) assets
RRs own and maintain networks (rights-of-way) and terminals (freight yards)
Questions With Solutions
Decline in rail freight rates CORRECT ANSWERS •Rail freight revenue/ton declines
27% (inflation adjusted) from 1992-2001
•Coal and grain rates decline- major commodities shipped on railroads
Increase in intermodal traffic (picture- taking trailer off truck or ship, putting on railroad,
hauling certain distance, back on truck): Piggyback service (truck and rail together) ON
EXAM CORRECT ANSWERS •directed to non-bulk, manufactured products
•Up 300% from 1980-2001
•RRs create dedicated intermodal trains with regularly scheduled departures and priority
operating schedules to improve on-time delivery
•Trailer-on-flatcar (TOFC) and container-on-flatcar (COFC) service
Trailer on Flat Car (TOFC) CORRECT ANSWERS Schneider Trailers- wheels set car
onto railroad track (locked down), can take It off, truck can haul it off and continue
journey
Container on a Flatcar (COFT) CORRECT ANSWERS Doesn't have wheels, actually
come on ships (tracks to set them on to haul them to final destination)
What are the advantages of intermodal service? CORRECT ANSWERS lower cost than
truck, more reliable than average train, lower transit times, more accessible to people
(combining cost efficiency of railroad long-haul with flexibility of truck and pickup
delivery service)
Decrease in train accidents CORRECT ANSWERS Down 60% from 1980-2001
Functional classification of carriers CORRECT ANSWERS Class I (operating revenue of
at least $346.8 million in 2006)
•BNSF Railway
•Canadian National Railway
•Canadian Pacific Railway
•CSX Transportation- B&O Railroad
•Kansas City Southern Railway
•Norfolk Southern
•Union Pacific Railroad
-Regional (linehaul of at least 350 miles of revenue of between $40 million and the
Class I threshold)
-Local linehaul (less than 350 miles and revenue less than $40 million per year)
-Switching and terminal (S&T)
,Intermodal CORRECT ANSWERS between modes
from railroad to truck or vice versa, or ship involved
intensity depends on where going in US =, little more intense, take truck and get
container off ship and take it to railroad of choice
offering good service, cheaper per mile, haul long distance and save money overall
•Intense - see alternative measures of market share
•Railroads adapt service and pricing
Intramodal CORRECT ANSWERS between railroads
switching, didn't go to everyone on map
not super intense if not same location
not easy to enter industry, have to have a lot of different cars and terminals so
expensive
•Differentiated oligopoly, few places served by multiple railroads- hard to enter, not
many doing it
•Large financial barriers to entry on a large scale - even small railroad would be
expensive
Principal commodities hauled on railroads CORRECT ANSWERS •Coal- primary
haulers
•Farm products- grains
•Chemicals- safer than highways
•Transportation equipment (not a bulk commodity)
Traffic shifts CORRECT ANSWERS growth of intermodal freight traffic
Constraints of the Railroad Industry ON EXAM CORRECT ANSWERS -Fixed rights-of-
way- if shipper or receiver doesn't own sightings, another mode of transportation is
required to complete that shipment (if don't have a way to stop and offload
merchandise, somebody else has to get it)
-Service limitations- shipment across country may require several different railroads to
handle merchandise, different railroads own different parts of country, expensive to
change railroads several different times
Strengths of the Railroad Industry CORRECT ANSWERS -Large carrying capacity, few
size or weight constraints
-Handle almost any type of cargo
-Assumption of liability for damage- rough train ride (steel)
, -Intermodal services and other new technologies
-A public benefit from rail: reduced road congestion and road damage- railroad
maintains own tracks so we don't have to repair
Tank car CORRECT ANSWERS specialize, transport liquid and gases
Gravity Discharge Hopper Car CORRECT ANSWERS hopper car but helps happen
naturally
Flatcar CORRECT ANSWERS freight car with no top or sides, hauls equipment or
intermodal freight
Hopper Car CORRECT ANSWERS freight car with floor sloping, use hinge doors to
discharge bulk materials
freight car with floor sloping to 1 or more hinged doors used to discharge bulk materials-
coal without lid or top
Covered Hopper Car CORRECT ANSWERS roof designed to transport bulk
commodities that need protection from elements
Boxcar CORRECT ANSWERS plain is standardized roof freight car with sliding doors
on side
Gondola CORRECT ANSWERS no top, flat bottom, fixed size, used primarily for
hauling bulk commodities
Specialized Box Car CORRECT ANSWERS specialized merchandise like auto parts
Refrigerated Car CORRECT ANSWERS refrigeration equipment
Carloading CORRECT ANSWERS declining due to increasing average car size,
improving carload productivity
RRs own and maintain most rolling stock CORRECT ANSWERS different from some
large trucking companies
Non-railroad companies own 37%, growing
30% of costs do not vary with volume- operate own rolling stock so fixed costs
Railroads High % of indirect fixed costs in short run (capacity remains fixed) CORRECT
ANSWERS High % of long-lived (durable) assets
RRs own and maintain networks (rights-of-way) and terminals (freight yards)
