The demand for freight:
A) originates when the carrier asks for the business
B) starts when the shipper calls the railroad to provide equipment to move a shipment
C) is a derived demand based demand for products
D) is based upon government quotas

Question

Quizplus · Accepted Answer

Freight demand is based upon the demand for products. Freight transportation is a derived demand, meaning the demand for it comes from the demand for the goods being transported. Shippers or manufacturers require the movement of their goods to their customers or distribution centers, creating a demand for freight transportation services. Choice A is incorrect because the carrier does not initiate demand; they provide the service in response to demand. Choice B is incorrect because the shipper calls the railroad in response to the demand for transportation, not to initiate it. Choice D is incorrect because government quotas may affect the supply of freight but not the demand.

The Demand for Freight