We hear so much about trains taking traffic from truckers . Does anyone know what the rate is to ship an intermodel trailer from say Chicago to L A. And also is the dray in the rate or does the shipper have to cover that on top of the rate?
Also a guy I know has tried to tell me that railroads do not pay claims. He says that if there is a wreck and your shipment is a total loss you are just out of lick. I find that hard to belive. There must be someone that knows tha answer to both of these questions.
Your friend’s claim is totally abusrd, certainly ignorant of history, railroading, railroad history, transportation history, insurance and insurance compnies, jurisprudence in America or anyplace else in the world, and the American penchant for suing to get even. And, incidently, the claims records of a railroad often reveal a lot of history, too.
Most railroads, from Class 1 to Class 3 are self-insured, although most also carry a catastrophic insurance policy to cover things like major wrecks, (think Graniteville) and things like hurricane damages and such.
Oh, do they pay claims?
We are a class 3, and have more people working in our claims department than anywhere else besides T&E service.
If your goods are damaged while on our property, you file a damage claim against us, our claims person will investigate, and if it seems we did indeed cause the damage, we pay for it.
If it is determined the car was delivered to us with the contents damaged, she will investigate as far as she can and advise the shipper of her findings.
Most of the time she simply pays, its faster, and considering the sheer volume of products we handle for some shippers, it’s in our interest to keep the shipper happy.
There is no set charge. The railroads sell different service levels (transit times) for different prices. Some of the larger motor carriers and the railroads have worked out a deal in which the rail terminal to terminal charge varries with the trucker’s expenses. i.e. If the trucker has to do a long dray on each end the railroad gets a smaller cut, if the drays are short the railroad gets a larger portion of the total door-to-door revenue.
This sliding scale based on drayage cost is a crtical key to intermodal profitability and growth.
Additionally, the railroad can cut any deal with a shipper that both parties find mutually advantageous.
The railroad can quote a rate that includes the drayage or it can quote a terminal to terminal rate. Some rates include the trucking which is then arranged by the railroad. Some rates apply only on a rail terminal to rail terminal basis. It depends on the situation and what the shipper wants and/or is willing to pay for.
The railroads do pay claims, but it really behooves the shipper to be familiar with all the terms and conditions as well as securement requirements . Don’t assume that you can load a container or a piggyback trailer like you would an OTR trailer. A good example of this is what happened to the company i worked for a few years back. We had a large account, American Standard, that shipped toilets to the east coast out of Toronto. Usually we loaded them carefully on AIR RIDE trailers, properly braced, padded and secured. And then one day the intermodal bug hit…the sales people were tripping over themselves to cash in on the savings, and in our haste we inadvertently loaded a leaf spring trailer and put it on the rail. Well, you can imagine what happened…the toilets didn’t make it…the railroad refused the claim…(trailer not loaded properly and wrong equipment for the job)…AND we lost the account. The whole thing went down the tubes. So the moral of the story is…they do pay claims…but you have to know what you’re doing or else they (correclty) won’t accept responsibility.
Q: How do you make a TOFC trailer leak when it rains (or doesn’t rain)?
A: Put a load of cigarettes in it.
They’ll claim water damage and everyone on the receiving dock gets free smokes (what would the railroad do with the cigarettes?) while the customer recovers his freight charges as a loss and damage claim. If a guy on the dock doesn’t smoke he’ll sell 'em to someone who does.
Over the years a number of ‘customers’ have tried to finance their operations out of freight claims payments - it eventually catches up to them and they go out of business.
I don’t know about LA to Chicago, but from Chicago to NJ in the mid 1990s it ranged from a few hundred dollars for international stack business to over $1000 for the premium TOFC guys - dray not included. I suspect it’s a bit more these days! [:)]
Rates depend on volume, size of container, and what days you’re shipping. To get the best pricing it also really helps to take care of the dray yourself and providing your own container. By providing your own container you effectively eliminate the railroad’s need to manage it…i.e. they don’t have to find a return load for it…