I fully agree with MP173 and The Cat Lady that when high value commodities, or commodities that need special care are moved, such as pharma and hazmat, the pricing changes. I noted that when I said there are certainly contracts to handle such special transportation needs.
But, I'm convinced, that when we're dealing with just regular old freight, washing machines, disposable diapers, canned vegetables, etc., the commodity usually doesn't have a significant effect on the freight rate. It did in the past, but that has gone away.
Now, I've been wrong once or twice before. And I ain't dead yet. So I could be wrong once again before that unfortunate event occurs. But from what I see, it's a "Freight, All Kinds" rate world with exceptions.
Trust me my boss charges a heck of a lot more to move the medical grade plastic resins than he does a trailer full of ready made peanut butter we haul. Even the hazmats we haul get different rates based on what as we call it the Whoopsie factor is. If it means that we need to call the EPA if it spills well guess what people pay the heck up.
Greyhound....respect your insight into transportation, we have had numerous discussions on this thread over the years but...
If I was moving a trailerload of pharma and didnt consider the value (in excess of a million $) into my pricing, I would be a fool.
Perhaps the industry has shifted dramatically over the years but valuation should be a part of the pricing equation.
Ed
What if we had a open bid market for railroads and intermodal
MP173The truckload industry probably takes several things into consideration including valuation, haz mat, and others. A truckload of scrap steel from Chicago to Memphis will probably be less than a truckload of pharmacueticals moving the same lane....or it should.
I don't see that.
I'm also an old rate man. Out of interest I follow the weekly DAT postings on truckload rates. They break it down by trailer type, not commodity. They show rates per mile for dry vans, reefers, and flatbeds. Truckload freight approaches perfect competition, which means prices will be driven down to near the costs. (These costs do include "The cost of capital" which some folks incorrctly call "Profit".)
Truckload rates seem to be set in a free market, real time, bid and ask method. There certainly are contracts for special needs. But generally the rates seem to be driven by the supply of trucks vis a vis the demand for trucks in a given location. Rates per mile vary greatly. If a truck is in Denver, for example, it's going to take a cheap load out. If the truck is in another location the load can pay double the rate per mile out of Denver.
LTL is different. The need to make various small pick ups and deliveries sets up a barrier to entry that precludes the intense competion of the truckload market. So the LTL carriers can be more agressive with their pricing.
When the stupid government allowed FAK (Freight, All Kinds) pricing of rail intermoal they finally allowed that business to grow. The Feds inane insistance on maintaing the class rate structure for rail shipments was a foot on the throat of intermodal for decades.
It's all a supply/demand thing. And the specific commodity has little to do with it.
I'd write more, but the GF says the pot roast is ready.
tree68 Like in Chicago South Side where the thieves stole guns from Containers. They had to know which containers had the guns and that took inside info.https://chicagotonight.wttw.com/2015/08/03/gun-theft-rail-yard-raises-security-questions MP173 Would that mean that there is a limited liability in case of damage? One of the factors going into transportation costs would be value of the lading. Can't answer that question, but it does occur to me that referring to a box simply as FAK would be a sort of security measure - potential thieves who might get hold of certain shipping information wouldn't know if a box held big screen TVs or Lincoln Logs... Although they do seem to get that info somewhere...
MP173 Would that mean that there is a limited liability in case of damage? One of the factors going into transportation costs would be value of the lading.
Can't answer that question, but it does occur to me that referring to a box simply as FAK would be a sort of security measure - potential thieves who might get hold of certain shipping information wouldn't know if a box held big screen TVs or Lincoln Logs...
Although they do seem to get that info somewhere...
FAK would also be the highest rate?
PNWRMNM Your assertion is totally false. Mac Your assertion that my assertion is totally false is like saying the capitalism is the best system and that socilism is the worst system without any citaations and making you sir are just making assumptions that you assume that you know everyone thinks is true.
Your assertion is totally false.
Mac Your assertion that my assertion is totally false is like saying the capitalism is the best system and that socilism is the worst system without any citaations and making you sir are just making assumptions that you assume that you know everyone thinks is true.
MP173Would that mean that there is a limited liability in case of damage? One of the factors going into transportation costs would be value of the lading.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
Thanks Balt....that was what I had thought.
Would that mean that there is a limited liability in case of damage? One of the factors going into transportation costs would be value of the lading.
MP173 What would be interesting to know is how shippers "classify" their intermodal shipments. .... Ed
What would be interesting to know is how shippers "classify" their intermodal shipments.
....
From a railroad viewpoint (to my knowledge) most intermodal shipment move under a FAK STCC code - Freight All Kinds. Many intermodal rates are based on the box and don't care about the commodity of weight of the shipment. If HAZMAT is involved it must be declared as such and the requirements change.
Never too old to have a happy childhood!
In a previous career several decade ago I worked in the LTL trucking industry. There was a standard "classification" tariff which listed nearly all possible items which could be shipped, with a description and a "class".
The class ranged from class 50 to class 500 and were one of the basis for determination of "class rates" of LTL shipments. For instance, steel was class 50. Printed material such as catalogs, books, etc were class 77.5. Plastic articles had density ratings based on the weight per cubic foot. Once a class for a commodity was determined, the LTL rate, based on mileage could be determined. The longer the distance, obviously, the higher the class rate. The higher the classification (class 50 was the lowest, class 500 the highest) the higher the rate.
It was pretty simple for an experienced "rate person". Our terminal rated between 250 and 500 LTL shipments per night with one "rate person".
I know the LTL industry still uses the same. The truckload industry probably takes several things into consideration including valuation, haz mat, and others. A truckload of scrap steel from Chicago to Memphis will probably be less than a truckload of pharmacueticals moving the same lane....or it should.
Comments above about a single location shipping very few commondities is probably true. Determining the shipping commodity is probably pretty simple.
As an old "rate man" these things interest me. Probably the most interesting is the movement of dimensional loads, such as the train NS 056 train which moves solid unit train of Deere or Case combines. These trains must stop (or opposing trains stop) at each passing of an adjacent train.
CandOforprogress2We got a book from CSX a few years back of STCC codes along with a open and prepay station list. The book was 5 inches thick and weighed 20 pounds.
There are a lot of different products that get shipped on the nations railroads - all of which have a STCC code that narrowly defines the product. The STCC Codes grew out of the time when all shipments had Tarrif defined charges for the specific commodities. Just saying 'sulfur' is not adequate as there are a number of different method to ship the commodity. Each of those different methods have varying degrees of risk associated with them and the carrier expect to be better compensated for those methods that have a higher degree of risk. That risk may be defined as affecting non-railroad locales or persons or that risk may be in damaging the product while in transit. Railroads are at risk for all the freight they carry.
The Open & Prepay Station Guide identifies all the locations in the country (and potentially Mexico and Canada) where rail shipment originating in the US may be shiped to and if that shipment can be sent to collect the freight charges from the Consignee or if the Shipper must prepay the freight charges.
Between the two books - there are a lot of products and there are a lot of places.
We got a book from CSX a few years back of STCC codes along with a open and prepay station list. The book was 5 inches thick and weighed 20 pounds.
If rail shippers were shipping hundreds of car loads a day of different commodities from the same plant then the STCC Code 'might' be a problem. As most plants ship only a limited variety of products - they already know the STCC codes for their shipments and applying it to the Bill of Lading is not a big deal.
Knowing what commodities are in transit means a lot to the carriers and to the accountants that track traffic patterns. HAZMAT - all of it - has a STCC Code that begins with 49.
I don't know enough about trucks to comment on how they identify the commodities they carry.
Mac
and last I knew only railroads make there customers figure this one out where trucking companies charge a standerd rate no matter what is being hauled
https://www.railinc.com/rportal/standard-transportation-commodity-code
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