Trains.com

Subscriber & Member Login

Login, or register today to interact in our online community, comment on articles, receive our newsletter, manage your account online and more!

Who pays for carloads sitting in a yard?

2105 views
10 replies
1 rating 2 rating 3 rating 4 rating 5 rating
  • Member since
    October 2001
  • From: OH
  • 17,574 posts
Posted by BRAKIE on Saturday, October 9, 2010 6:30 PM

Dave-the-train:

Eventually someone would get the blame for the delay and the bill would be charged... and someone might be fired.

----------------------------------

Of course  the railroad could simply chalk it up as terminal dwell time.

Larry

Conductor.

Summerset Ry.


"Stay Alert, Don't get hurt  Safety First!"

  • Member since
    September 2003
  • From: Omaha, NE
  • 10,621 posts
Posted by dehusman on Saturday, October 9, 2010 4:08 PM

Dave-the-Train

Going back to the OP again - if the utility has backed things up and caused the cars to be held short of destination wouldn't they then be charged?  Isn't it at least a possibility?  (I'm sure that this would be era, RR and even contract specific). 

99.99% probability no.

  Then again if the RR has delayed things, maybe by failing to clear the utility of empties so that they cant get the loads in, wouldn't the RR risk having to pay penalties for late delivery? (Again subject to all the specifics).

99.99% probability no.

Then there would seem to be a third option.  This seems to apply to the OP's amended post with more things going on than the coal gons...

There can be situations where the consignee and the RR are both ready to deal with cars but a third party is in the way. 

Eventually someone would get the blame for the delay and the bill would be charged... and someone might be fired. 

99.99% probability no.

I have read old reports (c1900) of charges for damaged cars being repaired that went round in the same sort of circles.  I think they were reports by the Interstate Commerce Commission???  I'm not sure if I also read similar reports for delayed cars or loads.

That's 110 years ago.  They were for what is now termed "AAR billing" and its a completely different thing.

When cars got blocked in or out over here the time the cars stood (plus where, why and who caused it) was recorded on "Standage" forms that had to be submitted weekly.  I dont know if the US had such a practice??? 

Its a local railroad thing.  Each railroad keeps its own records.  Weekly?  Wow, you guys are really lenient.  We start generating exception reports on cars that haven't moved in over 48 hours.  Trains that are delayed start popping up on reports after 4 hours without a movement event.  The go on other reports if they will be delayed over 8 hours.

Dave H. Painted side goes up. My website : wnbranch.com

  • Member since
    July 2006
  • 2,299 posts
Posted by Dave-the-Train on Saturday, October 9, 2010 3:02 PM

I don't want to get into trouble for raising some ideas but want to get things straight in my own mind please.

First - it seems to me that if we go back to the OP the question of "who pays" is answered by "who cant get out of a charge".

What Im thinking is that the answers re demurrage and so on apply to what happens when things run smoothly.

If, however, things go wrong we start tolook at other things don't we?

Going back to the OP again - if the utility has backed things up and caused the cars to be held short of destination wouldn't they then be charged?  Isn't it at least a possibility?  (I'm sure that this would be era, RR and even contract specific).

Then again if the RR has delayed things, maybe by failing to clear the utility of empties so that they cant get the loads in, wouldn't the RR risk having to pay penalties for late delivery? (Again subject to all the specifics).

Then there would seem to be a third option.  This seems to apply to the OP's amended post with more things going on than the coal gons...

There can be situations where the consignee and the RR are both ready to deal with cars but a third party is in the way.  As I recall cars blocked in (or out) for company A were charged to company A by the RR (assuming RR owned cars to keep it a bit more simple) who then past the charge on to the blocking company B.  If company B could pass it on again (maybe to company C) , back to company A or to the RR it would do so.  The whole business could go round in many circles.

Eventually someone would get the blame for the delay and the bill would be charged... and someone might be fired.

I have read old reports (c1900) of charges for damaged cars being repaired that went round in the same sort of circles.  I think they were reports by the Interstate Commerce Commission???  I'm not sure if I also read similar reports for delayed cars or loads.

When cars got blocked in or out over here the time the cars stood (plus where, why and who caused it) was recorded on "Standage" forms that had to be submitted weekly.  I dont know if the US had such a practice???

Cool

  • Member since
    November 2008
  • 1,205 posts
Posted by grizlump9 on Friday, October 8, 2010 9:54 AM

cars available for a customer but being held out and subject to demurrage were referred to as being on "constructive placement"  but in over 20 years i never could figure out what the heck was "constructive" about it and nobody, industry clerk or official, could explain how they got that terminology either..

grizlump

  • Member since
    September 2003
  • From: Omaha, NE
  • 10,621 posts
Posted by dehusman on Friday, October 8, 2010 7:01 AM

jrbernier

Per Diem - The charge one railroad pays another railroad for use of the 1st railroad's freight car.  Typically this is calculated on a daily basis at Midnight.   Customer do not pay this charge.

The successor to "per diem" is car hire and it is an hourly rate.  Private owner cars have a mileage charge instead of perdiem or car hire.

Demurage - This is the charge a customer pays when his 72 hour loading/unloading window is exceeded.  When a freight car is available for spotting, the charge starts.  Large customers with lots of arriving loads may have to pay demurage or a switching fee if the car has to be set out 'off spot' and later spotted.  Prompt unloading of a rail car and releasing it back to the railroad will stop the demurage charges.  Many time, a railroad will give the customer 72 hours to load/unload the car.  Some high value cars may have shorter 'windows' for loading/unloading.

Private owner cars spotted on private tracks are not subject to demurrage (but may be charged a switching charge to move them to spot).  If the consignee (reciever of the shipment) can't take the inbound load, the railroad may put the car on another track.  At that point the car is considered "constructively placed" and the demurrage clock starts (what in model railroading is called "off spot").  To get the car on spot the custiomer will be assessed a switching charge.

  Private owner cars do not incur the above charges.  

Private owner cars not on private track can be charged demurrage.

Dave H. Painted side goes up. My website : wnbranch.com

  • Member since
    January 2001
  • From: SE Minnesota
  • 6,847 posts
Posted by jrbernier on Thursday, October 7, 2010 10:24 PM

Jim,

  There are several factors here.  I will start by describing the basics of how it worked in the 'Pre-Staggers' era.  Let's get a couple of terms defined:

Per Diem - The charge one railroad pays another railroad for use of the 1st railroad's freight car.  Typically this is calculated on a daily basis at Midnight.   Customer do not pay this charge.

Demurage - This is the charge a customer pays when his 72 hour loading/unloading window is exceeded.  When a freight car is available for spotting, the charge starts.  Large customers with lots of arriving loads may have to pay demurage or a switching fee if the car has to be set out 'off spot' and later spotted.  Prompt unloading of a rail car and releasing it back to the railroad will stop the demurage charges.  Many time, a railroad will give the customer 72 hours to load/unload the car.  Some high value cars may have shorter 'windows' for loading/unloading.

  Private owner cars do not incur the above charges.   But, the owner pays for the movement of both the loaded move and the empty trip back.  The advantage is that the owner has control of the car - it cannot be considered a perspective empty when unloaded and 'captured' like a box car.  This is why common carrier railroads many times had a separate 'private' company for their expensive refrigerator cars(like PFE(UP/SP/WP), BREX(CBQ) or cars leased from URTX.  This way the cars could be controlled and kept in assigned routings. 

  Your 'Warehouse District' is an example that may be serviced by several railroads(reciprocal switching) even if only one of the railroads has the actual spur to the industry.  A terminal railroad may do the switching, or each railroad will provide service.  The was a large warehouse district in the 'Midway' of St Paul, and the Minnesota Transfer(owned by the trunk roads) had a large transfer yard as well as switched the industries near that yard.

Modern Era(Post-Staggers) - A lot of the 'rules' get more complicated as the shipping charges will vary on the total amount of traffic and if the loading/unloading is done in very tight 'windows'.  Mill gons and other specialized steel industry cars were some of the first with these special rules(even before Staggers).  Grain hoppers in 'Shuttle' service have special rules(minimum # of cars, single loading point/single destination, very tight loading window) to qualify for the special shuttle rates.

Jim

Modeling BNSF  and Milwaukee Road in SW Wisconsin

  • Member since
    September 2003
  • From: Omaha, NE
  • 10,621 posts
Posted by dehusman on Thursday, October 7, 2010 10:16 PM

Jamis

I was driving past the Lang Yard here in Toledo and noticed an unusual number of loaded coal condolas for DEEX (Detroit Edison) sitting there.  There were far more cars than the nearby power plant trackage had room for, and I wondered if the customer had to pay the per deim for the storage? 

Customers pay demurrage.  Railroads pay "perdiem",  actually car hire.  Two completely different things.

They also aren't "stored" so they aren't paying storage.  They are probably just being held out and most likely the railroad isn't being charged "per diem", the utility probably isn't paying demurrage.  Whatever the situation it is probably covered by the contract between the utility and the railroad.  Those contracts vary by railroad, by utility, when they were signed, what the operations is, what the basis of the contract is etc.  There is absolutely no telling what the provisions may be.

Dave H. Painted side goes up. My website : wnbranch.com

  • Member since
    September 2006
  • 776 posts
Posted by wabash2800 on Thursday, October 7, 2010 9:52 PM

I believe since deregulation, to some extent, U.S. railroads are more likely to provide more flexible services and rate schedules with customers than they used to. It is my understanding that some railroads offer a "warehousing function" in that cars with comodities are stored in their yards and held there until the customer needs it. I recall that Indiana Rail Road was doing this with tank cars in Indianapolis as far back as the 1980's.

  • Member since
    January 2010
  • From: NW OH
  • 200 posts
Posted by Jamis on Thursday, October 7, 2010 9:34 PM

Ah, yes, I hadn't thought about the private ownership of the gons.  Let's take this a step further as I'm really thinking of another type of rail customer.  Consider a wholesale grocery supply house with a siding that holds a couple of cars.   What charges would the receiver incur if loads arrived from several different railroads to the rail yard that feeds this customer and they still have the normal turnaround time left on the cars spotted at their warehouse doors?  Granted, some of the loads would be perishable, and take priorty, but others would not be.  The NKP in Toledo had this arrangement in the warehouse district.  The NKP interchanged directly with the Wabash, and the Michigan Central at the yard just outside of the Warehouse District.  The NKP also had interchange traffic with the Toledo Terminal RR, which interchanged with every other railroad in the area and could forward traffic to all of the railroads in the area.  Thus, this wholesale grocer could receive shipments from all over the country and due to the traffic being handled by different carriers.  Tthere would surely be scheduling issues.  The entire warehouse district had many rail served companies that this could happen to.  Perhaps I am missing a fundamental operation of railroads, but I am trying to put together how to schedule traffic on a model of the NKP's warehouse trackage.    

Jim -  Preserving the history of the NKP Cloverleaf first subdivision.

  • Member since
    November 2008
  • 1,205 posts
Posted by grizlump9 on Thursday, October 7, 2010 6:54 PM

reporting marks indicate to me that these cars are owned by Detroit Edison so there is no per diem charge that applies.

purely conjecture but, power plants don't operate on the just in time system and usually stock pile a lot of coal so those cars might be the result of the previous unit train arriving later than usual and the power plant getting backed up on their unloading through no fault of their own.

grizlump

  • Member since
    January 2010
  • From: NW OH
  • 200 posts
Who pays for carloads sitting in a yard?
Posted by Jamis on Thursday, October 7, 2010 6:29 PM

I was driving past the Lang Yard here in Toledo and noticed an unusual number of loaded coal condolas for DEEX (Detroit Edison) sitting there.  There were far more cars than the nearby power plant trackage had room for, and I wondered if the customer had to pay the per deim for the storage?   It is possible that these cars were destined for more than one power plant as there are two coal fired plants just to the north of this yard.  I realize this is an obscure question, but I guess it may have an impact on operations on a model. 

Jim -  Preserving the history of the NKP Cloverleaf first subdivision.

Subscriber & Member Login

Login, or register today to interact in our online community, comment on articles, receive our newsletter, manage your account online and more!

Users Online

There are no community member online

Search the Community

ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
Model Railroader Newsletter See all
Sign up for our FREE e-newsletter and get model railroad news in your inbox!