CPIM Practice Exam

What do line-haul costs primarily include?

1. Fuel expenses and tolls

2. Basic costs of carrier operation to move a container of freight

3. Terminal handling charges

4. Administrative overheads

The correct answer is: Basic costs of carrier operation to move a container of freight

Line-haul costs primarily encompass the basic expenses incurred by a transportation carrier to move freight from one location to another, specifically over the main route or segment of the journey. This includes a wide array of operational costs, such as fuel, labor, and maintenance of the vehicles involved in the transportation process. These costs are distinct from other logistical expenses that might come into play, such as terminal handling charges, which relate to the loading and unloading of freight at terminals. While terminal charges are significant for overall transportation costs, they do not fall under the definition of line-haul costs, which focus instead on the direct movement and transit of freight. Similarly, administrative overheads are related to the broader operational infrastructure of a carrier and do not reflect the direct costs of moving freight. Understanding line-haul costs is crucial for logistics and supply chain professionals, as it allows for more accurate pricing and cost management when planning the movement of goods. The correct identification and management of these costs contribute to profitability and efficiency in transportation operations.