break down of pay...

[Anonymous]

so lets say that i own one box car. it travels throughout the U.S. hauling everything and anything. what's the break down of the pay that my one boxcar earns. i'm sure it varies based on the freight it's carrying, but does each railroad that pulls it get a cut, how much do I get, and so on.

[Anonymous]

...I think you would be mighty disappointed with your ROI, that is if it's positive at all.

You gotta remember a few things.

•If your car is sitting in a yard waiting to be used, you aren't making any cash.
•If your car is deadheading, empty, you aren't making any cash.
•If your car is sitting on a RIP track somewhere in the middle of nowhere, you aren't making any cash.
•Railroads will always use their own equipment first, they make more money that way. -- therefore you're last in line.
•When your car needs repairs nomatter what they are, you're on the hook for the bill.

This was the thing to do back in the 70s and 80s...dentists were out buying shares of railcars, in the long run they would probably have been better off buying race horses.

[Anonymous]

Yes.. what about the revenue?

Per mile? Per Deim? Per Load? Special conditions and tarrifs? etc etc etc

[Anonymous]

just a general explanation of how the pay gets divied. how much the railroad gets for haulin around my loaded boxcar, how much i'd get. i understand that unloaded, dwell time wherever, etc etc pays nothing, i'd get the maintenence bill... do i get paid then pay the railroad or vice versa. it's kind of an off the wall question, but something i've wondered about....all these freight cars roamin around, how does it all work...?

[Anonymous]

QUOTE: Originally posted by farmer03

just a general explanation of how the pay gets divied. how much the railroad gets for haulin around my loaded boxcar, how much i'd get. i understand that unloaded, dwell time wherever, etc etc pays nothing, i'd get the maintenence bill... do i get paid then pay the railroad or vice versa. it's kind of an off the wall question, but something i've wondered about....all these freight cars roamin around, how does it all work...?

It's the originating Railroad that gets paid, then owes the other railways that the car is interchanged with.

Example:
Your company is on a shortline who interchanges with CP....

You call your shortline then they bill you...
The shortline then divies up the money with the long-haul carriers as necessary, they pay CP out of what you paid them.

As far as owning a car and other people using it to ship --
If it was your car, then you would be getting paid by the host railway that used the car to serve their customer on their line.

A better way might even be to lease the car to a shipper that uses rail already and wants their own rolling stock, instead of what the railways are providing.
Often times though, if there is a certain comapny that ships enough they will just buy their own rolling stock, instead of leasing off of someone else.
--Tankers are a good example of that, very few railway owned tankers.

That's how I understand it, if anyone else knows differently just let us know.

What the rates of pay are, I don't know, it would depend on how far the shipment was going, and how long it took.

[Anonymous]

Don't forget about demurrage...

[PNWRMNM]

Farmer,

The involved railroads earn the freight rate and divide it among themselves based on their agreements. This is interline revenue accounting.

Car hire is paid on time an mileage basis to the owning railroad by whichever carrier has possession of the car. Contrary to MacGuys assertion you would earn the time portion all the time the car was not on your line, bad order, running empty, whatever.

Like everything else, this used to be regulated by the ICC/STB. Rates were usually designed to be neutral, that is cover cost but not be a profit center. With deregulation car hire has got very messy as everbody is supposed to negotiate with everybody else, which can introduce all sorts of complications. That is the limit of my knowledge. If you want to know more it will take someone in car hire accounting to explain it and odds are you still won't understand it when they are done.

Demurage is a charge assessed by the railroad against a customer for holding a car longer than free time. This is a tariff item which you can find on carrier websites. Demurrage makes customers crazy. They act like they think cars should be free.

Car hire on private cars is a different animal, usually strictly mileage basis. That is why railroads do not care how long a tank car sits in a customer's facility.

Mac

[Anonymous]

in this same vein, if a shipper supplies his own cars, then how does the railroad bill for power and track usage?

[dehusman]

To answer your original question, as the car owner you only get car hire and mileage. You do not get a cut of the revenue as the car owner. The ony way you get the revenue is if you participate in the route of the shipment. If a UP car is loaded in Boston and sent to Indianapolis, the UP gets no revenue. You can accrue car hire whether the car is moving or sitting still, loaded or empty. You get mileage when the car moves.

The railroad has a rate for moving the product from A to B. There may be a different rate if the shipper provide the cars. Virtually all tank car movement is in private cars. The railroad either has a tariff or contract rate with the shipper and if they bill a car from A to B then the railroad charges them $xxxx. The rate covered theoretically covers the railroad's costs of engines, track, crews, fuel, maintenance and profit.

Dave H.

[WSOR 3801]

Most X cars (private cars) are charged per trip. Tanks and plastic cars can sit quite a while before the customer is ready for the car, but they incur no demurrage. The cars get used as a rolling warehouse, and when they are ready for the particular product in the car, they tell the RR which car needs to be spotted at which location.

[PNWRMNM]

CBT

Start with the thought that the car hire is included in the freight rate quoted the customer. If the customer wants to supply the cars the railroad will either pay the car hire, or not pay car hire and reduce the freight rate by the amount that car hire would have been. The railroad is indifferent as between the two. It is really a matter of what the customer wants.

If the customer can finance the cars more cheaply than the railroad can, then he can save the difference between railroad's cost and his, at the risk of being stuck with the cars. In fact most "private" cars belong to car lessors, but the principal is the same.

Mac

[Anonymous]

mac,
makes all the sense in the world. thanks.