What is Rail Fuel Surcharge? Simply put, Fuel Surcharge is a tool that was designed for railroads to recover the cost of fuel consumed to move railcars. Fuel Surcharge came about when the cost of fuel increased, and the railroads decided to pass the excess cost onto shippers. The railroads will apply Fuel Surcharge on …
Category: Rail Rates and Logistics
Railroad Cost Indexes Explained
The Association of American Railroads (AAR) and the Surface Transportation Board (STB) calculate several indexes to measure inflation, cost increases, and productivity across rail lines. These indexes can be used to measure the health and status of the rail industry. Some rail contract rates are subject to a railroad cost index, and many contracts state …
Rule 11 Railroad Rates Benefit Shippers
Are the railroads telling you they want Through Rates converted to Rule 11? If so, that’s a good thing. Rule 11 railroad rates can give you better pricing visibility and transparency across your routes. With the right information, preparation, and negotiating strategy, you may be able to reduce your rail spend overall. Here’s how. What …
5 Tips for Effectively Negotiating Rail Freight Rates
Understanding how the railroads price your commodity is a starting point for determining your ability to negotiate rail freight rates. Railroad pricing has been cyclical over the years, fluctuating between public tariffs and private contracts. With the use of differential pricing, the railroads may provide different rates to different shippers in similar lanes. Regardless of …
10 Rail Logistics Cost Reduction Strategies
Reducing logistics spending can be an uphill battle, especially in the railroad industry. Many areas are served by a small number of carriers, or even just a single carrier. Rail logistics cost reduction strategies become even more challenging with limited negotiating power. However, there are ways to negotiate and reduce rail transportation costs. As you …
Railroad Operating Ratio and How They Price
Railroads will tell you they “price to the market.” But whose market is it, yours or theirs? How many times have you questioned the reasonableness of a rate? How do you currently compare the rate for one lane to the rate in another? How Railroads Price Impacts Their Operating Ratio The railroads always strive to …
Rail Shipping Rate Quote Delays And Rate Increases Amid COVID-19 Outbreak
The COVID-19 pandemic has changed workplaces and lifestyles across every industry around the globe. Railroad companies are no different. As many employees are working from home or laid off to ensure safe social distancing in the workplace, rail shipping quotes delays and rate increases are appearing more frequently across North America. Are your shipping rate …
Have the Railroads Stopped Negotiating?
Are the railroads telling you that privately negotiated contract rates are reverting to public tariffs? This may become more prevalent, but that does not mean the railroads have stopped negotiating. Public tariffs have long been in existence, providing easy access to rates with low administrative costs. But over the years, many shippers have been successful …
Selecting a Rail Transload Facility
Rail transload facilities play a vital role in many companies’ shipping networks. These facilities allow shippers to realize benefits from a combination of rail and truck. Perhaps you’ve used the same transload facilities for some time, and you’re wondering about other opportunities. Or perhaps you’re reassessing your shipping plan to accommodate new receivers, new products, …
Comparing the Costs of Rail Shipping vs Truck
Companies that transport dry and liquid commodities utilize the modes of truck, rail, barge, ocean and pipeline. Some shippers are fortunate enough to be able to utilize barge, ocean and pipeline that can provide significant cost savings. However, most shippers rely on truck, rail, or a combination of the two. When comparing the costs of …