Certified Supply Chain Professional (CSCP) Practice Exam

What are shipping associations primarily formed in response to?

1. The establishment of international trade agreements

2. Deregulation that favored larger shippers

3. Increased competition in domestic markets

4. Consumer demands for better shipping practices

The correct answer is: Deregulation that favored larger shippers

Shipping associations are primarily formed in response to deregulation that favored larger shippers. As shipping industries undergo deregulation, it often leads to increased competitive pressures. Larger shippers can leverage economies of scale, thereby squeezing smaller competitors. To respond to these challenges, shipping associations are established, allowing smaller and medium-sized shippers to collaborate, share resources, and advocate for their interests in a changing regulatory landscape. This collective effort helps them to navigate the challenges posed by larger entities in the market and maintain competitive viability. The other options, while they each reference important elements related to shipping and logistics, do not directly address the primary catalyst for the formation of shipping associations. International trade agreements, while impactful, are more about enabling trade than addressing the competitive dynamics that deregulation initiates. Increased competition in domestic markets, though a significant issue, does not specifically point to the reasons for associations being organized in terms of regulatory response. Consumer demands for better shipping practices might drive changes within the industry, but they do not fundamentally explain the formation of associations, which are more about structural responses to larger market forces.