I think this was brought up recently but what is the cost of switching rail cars onto a siding? Does it depend on how many rail cars are being switched at one time or how far the rail car has to go from the frieght yard to the siding?
Freight charges are paid for moving the commodity from origin to destination and are normally based upon the weight of the commodity and the distance between origin and destination as well as the value of the commodity (railroads exposure to risk of accident in transportation). The shipper is allowed one spotting of the car at his plant for loading. The consignee is allowed one spotting of the car at his plant for unloading. Any other spotings of the cars at either plant, performed by railroad crews, are charged intra-plant switch charges that are defined by tarriff.
A car that is moved from ‘Spot 1’ to ‘Spot 2’ at the direction of the shipper or consignee is considered an intra-plant switch and is chargable, an exception to this rule would be where the car is placed at Spot 1 for unloading and is moved to Spot 2 for loading of a subsequent outbound shipment. The shipper or consignee can move the cars within their plant with their own equipment at will and without charge.
BaltACD explains what the customer will pay, but I think you are asking what the actual cost to the railroad would be?
In that case, it all depends on how the work is to be done and how much work is to be done. Mostly, what you are talking about is train delay, and that can be highly variable. For “round numbers”, figure 10-15 minutes for a set out and 20-25 minutes for a pick up, but if you don’t take all of the cars on the track (a clean sweep), your delay could easily go to 60 minutes. And then, also, if all of this work is for just one car, it will cost more per car then if you have 2 or more cars involved even though the total cost to do the work will be pretty much constant.
If you are the only train out there, the delay is mostly your concern, as long as you get the work done. But if other trains are out there with you, the time that you may lose getting into the clear for these other folk adds to the cost of your spots and pulls. And if you should delay any of these other folk, the cost of their time adds to the cost of spotting your box car.
And then there is “fully allocated cost”. What is the replacement cost of the car(s) being spotted - in theory, for each day that car is at the shippers dock, a “new car” needs to be purchased to replace it. How much did it cost to put in the spur. What did the switch cost. How much time and material is used to maintain these items. How long does it take for the Agent to push the paper - there is a cost there.
I’m sure this answer only adds to your list of questions, but this “simple answer” shows just how complicated this subject can become. And, yes, then there is the matter of “charges”.
any number of reasons can be why cars are switched into a siding… sometimes they are storage cars and its better to park them on a sideing out of the way of a yard to free up space in a yard for inbound and outbound trains… as far as the acctual cost to the carrier…it is minum… and depending on if they are storing cars for someone else… the carrier will bill the car owners a storage fee…so what ever the fee is will cover what ever the costs are for a crew and engin to put them there and make some money for the carrier too… and as far as switching cars into industry sideings…what balt said is a good example of how that works… where im at… from what a yard master told me… every time we switch this one location it cost the customer 200 bucks… that is just one switch… this place gets a few a day… so do the math… more then enought to cover the crew and equipment costs…
csx engineer
Does anyone here know what railroads figure their “costs” are to operate a locomotive and crew per hour?
Also, if Bob Wilcox or others could chime in on how the local pickup and delivery (sorry for use of the LTL term) costs of cars are determined in the marketing/rate making aspect. The profitablility aspect of local freights, or customers is an interesting subject to me.
In my city, we have two locals (NS and CFE) which come to town. NS is here 6 days a week. The local train is usually only about 10 cars or less when it hits town. However, there is one customer (resin plant with tank cars) in which it switches at least an hour. I never could figure out why it took so long. It appears they are spotting cars for loading/unloading and thus are generating revenue by doing so.
Another customer is a plastics manufacture, using plastic granules. There is always a string of 10-20 cars in their siding. These, no doubt came from Houston or a similar petrochemical region and the hoppers are a form of warehousing/storage. With an intraplant switch, the number of cars makes sense, the cars are shuffled around based on customer’s needs, with NS receiving revenue. I have looked at the tariffs on line for these charges and it struck me these tariff rates were very high. cant remember the $ charge now, but a couple hundred $ per car seems right. That can get pretty expensive if you are shuffling 10 or more cars around.
Then again, the cost of owning or maintaining a private locomotive or trackmobile is expensive also. Does anyone know if most customers pay the published tariff rates, or if “exception rates” are used for such intraplant switches?
ed
OK, I was “Tracking” along pretty well till we got here…
Wouldnt the “replacement cost” be related to Demand for that type of car…if you have others like it sitting unused on your system, wouldnt the “Replacement cost” be zero? I am stuck on why the opportunity cost for that car being spotted is the same as buying a whole new car…or did I misunderstand that part?
“Fully Allocated Cost” is really an accounting fiction which assumes that all of the costs for running a train can be charged to one car. A bunch of other things are assumed also, such as no empty cars are available to fill the order until one is built, a new locomotive must be purchased to haul this new car everywhere, and so on. Its most notorious use was calculating how much it cost to operate a passenger train when it came time for the railroad to cancell the service.
In the now-infamous ICC formula, fully allocated costs included a proportional share of track upkeep, passenger department expenses, joint facility rentals, etc. The ICC formula was an early form of cost accounting before that method had been developed for the rest of the world.
[banghead][banghead][sigh]Kinda like figuring out the charges on your hospital bill.
AMEN. I dont do hospitals. If the brain, lungs or heart stops, just send my body to the crematory and save me the hassle of the hospital billing. We have done enough of that, at least the burial is prepaid.
As a side note, try researching on the web search various pricing for different hospital services. Such a thing are state secrets and are buried in a mass of billing codes that no one is supposed to understand.
Canton Railroad in Maryland had a PDF file that listed charges. I think to couple onto a car and move it is worth 50 dollars to whoever’s property that car is on. I may be mistaken as alot of time has gone by since I last read that file.
Edit: Found it!
Web presence
http://www.cantonrr.com/ship.htm
PDF with Charges
Does a railroad generally charge the same fee to switch 2 cars at once, as it does for switching only one car? Or, is it a per car switched charge?
http://www.ptra.com/pages/basetariff2000B.pdf
Try looking this over, it may help.
Oh, and on most Class 2 and three roads, a crew start is about $1000.00 to $1200.00.
I think folks have two concepts mixed up here.
First - what does it cost to spot a car to a customer? The answer to that is that whatever answer you come up with, by whatever method you use, will be at best an approximation.
Second - what does an intra industry switch cost the customer? The answer to this is whatever the tariff says it costs. About the only exception to this will be a letter quote or special agreement. The class I carriers will make a special tariff item if they really need to come down from tariff rate. The whole purpose of intra plant switch charges is to discourage them rather than to generate revenue.
The interesting question here is what is in the rate? In the rate the customer can request that specific cars, by type or number, be spotted to specific locations or doors. In the case of the plastics plant alluded to in one post that would include the cost of digging specific cars out of a yard track or holding track. Rearranging cars once spotted as requested will trigger the intra industry switch charge. Rearranging cars misspotted due to railroad error will not generate a charge. Pulling a part load or unloaded car from spot AND bringing it back to spot will each trigger a swithc charge, and rightly so. The concept is that what is necessary to perform the service is included in the rate. Extra work generated by the customer is charged for.
In my limited experience and opinion a lot of intra industry work that is done is not charged for due to inadequate training of switch crews. If a customer consistently generates excess work the crew may complain to management. Management may talk to the customer or they could tune the crew up about how to capture moves that would generate the charges. The first switch bill to show up will generate howls of protest from the customer, which wil
Replacing a partially loaded car at it’s original spot in a plant does no generate an intra-plant switch charge, even though extra switching effort is required. Moving the car to a different spot when directed to do so by the industry is a switch charge.
Some industries may have a ‘progressive switching agreement’ wherein…for example…5 cars of a commodity are spoted on an industry track; car 1 at the bumping block, car 5 closest to the plant lead…industry unloads cars 1-3 and partially unloads car 4 and never touched car 5. Fresh loads need to be spotted…cars 1-3 are pulled, car 4 is moved to the car 1 spot, car 5 to the car 2 spot and the fresh loads to spots 3 and higher. This works where the same commodity is handled on a track.
At an industry like an automobile assembly plant, where there are desiganted spots for fenders, transmissions, engines, upholstry, suspension parts etc. etc. etc. this form of service would not work.
Balt ACD
You are correct. What I meant, but did not say, is if customer ordered car out of his facility today and then back later a charge would apply both ways. Respoting becuase you had to get the car behind out is, as you correctly state, at no charge.
Mac
Mac the PNWRMNM Man----
Training is not the problem with lack of reporting. It is the belief of employees (both train and clerks) that the railroad is trying to shaft the customer and the customers reaction to these charges that reinforces this belief.
Actually, with accurate reporting these charges often do not happen. A customer that understands the tarrif will almost always get its switching done free by following the tarrif exactly. I know of several companies that created work lists that would engage an entire crew for twelve hours and not generate one cent in charges. It is really not hard to do.
The railroad uses these charges to cover the cost of the crews doing the work, and as such, are higher (often much higher) than the actual cost of providing service. One “excess” switch per week will usually do the job.
BaltACD
A progressive (or average) switching agreement is a nice thing to have in your example, but not necessary. Even your example of the autoparts spots can be done without a billable charge nearly all of the time if the cars are originally spotted properly. Normally, where the road-haul revenue for the traffic and its volume is adequate, the railroad will voluntarily provide an average agreement for both demurrage and incidental switching charges.
Remember, the ROCK partially did itself in by hauling traffic at a loss just so that it would have the car count and revenue. Mostly they did this by charging the same rate as another road that had a “short” haul and then the ROCK having to haul the car several hundred miles “around the barn”. Sometimes the railroad’s Traffic Departments are not too smart.