This is related to the attachment posted under the “Watch” section in Week 7 entitled, “Chapter 8 Tables – Pages 207-208 and 423-425 – LTL Calculation Exercise (Week 7).pdf
Questions 8, 9, 10, and 12. Please respond with your answers no later than Friday, 11/20. I can set up a Zoom meeting to go over these separately or we can discuss at Office Hours from 5:30-6:30pm on 11/11 and 11/18. These are very relevant questions when it comes to domestic transportation and will be applicable to the real world. And don’t forget the MC (Minimum Charge) of $81 which means an LTL rate you determine cannot be lower than that cost.
8) Shatter Industries, Inc. manufactures household and commercial glass products that serve a variety of purposes.
• Refer to the National Motor Freight Classification 100-S (Table 8.7) to determine the LTL (Less than Truckload) and TL (Full Truckload) product classifications for the following Shatter items:
o Item 86960, glazed glass, boxed
o Glass slides for microscopes
o Bent mirror glass, dimensions 7 feet by 5 feet
• Shatter ships many of its products from a warehouse in Atlanta, Georgia to a distribution center in Lansing, Michigan. Refer to the rate tariff in Table 8.8 to find applicable charges for the following shipments over the route:
o 5,200 lbs of mirrored shock glass (Item 86900, Sub 1 – class 85).
o 32,000 lbs of class 65 product.
o 200 lbs of class 60 product.
o 2,500 lbs of class 200 product with a 5% temporary fuel surcharge added to the line-haul charge.
9) Gigoflop Electronics has 3 shipments of class 100 products to be transported from Atlanta, Georgia to Lansing, Michigan. The shipments weight 5,000 lbs, 10,000 lbs, and 7,000 lbs, respectively. Gigoflop can ship each quantity individually or consolidate them as a multiple-stop shipment. Each shipment is to be delivered to a different location in Lansing. The carrier, Eckgold Trucking, charges $50 for each stop-off (not including the final destination). Refer to Table 8.8 and evaluate the costs of shipping individually versus consolidation. Which option should be used by Gigoflop?
10) Stanley Harris, Traffic Manager of This n’ That Manufacturers, is considering negotiation of a Freight-All-Kinds (FAK) rate for shipments between Atlanta and Lansing. The company ships 200 (class 65) shipments of 5,000 lbs, 40 (class 400) shipments of 1,200 lbs, and 30 (class 100) shipments of 10,000 lbs, and receives a 45% discount on published rates.
• Refer to Table 8.8 to determine the current freight bill for the above shipments. NOTE: Take the discount from the published rate and round up for the applicable hundredweight (CWT) rate.
• Should Mr. Harris accept a FAK rate of $10 per hundredweight (CWT)?
• What factors aside from price should Mr. Harris consider with an FAK rate?
12) Moving Hands, Inc. ships alarm clocks from Atlanta to Lansing. The company has begun packaging the clocks in a stronger corrugated box to reduce the likelihood of damage in storage and transit. As a result of the improved packaging, the clocks’ product classification has dropped from 100 to 85 without significantly adding weight to the package.
• What effect does the new packaging have on the transportation cost of a single 1,000 lb shipment? Refer to Table 8.8.
• Suppose Moving Hands ships 300 loads of the 1,000 lb quantity each year and the new packaging costs $10,000 to develop and produce. Will Moving Hands realize a full payback of the packaging investmeaqwnt in its first year?
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