Rail Ed. 101

[David914]

I am starting this thread as a place to ask questions & provide answers on various Railroad topics from maintenance to finance. Believe me, I will have more questions than answers. But feel free to put in your two-cents. This is how people learn as well as keeping one's brain active.

My first question is: What do you call the charge for rail transportation when a commodity is short-hauled? In other words, is there a name given for a charge when a car load or LCL is transferred from one railroad to another on it's way from point A to point B? This can include running over a Belt Railway as well.

Thanks!
D. Warnick (a.k.a. David914)

 

[Ed Sand]

Good question and hope this turns into a fun thread.

First, a quick point: The railroads don't handle any LCL any more. There's car load or multi-car/unit train freight, basically.

Rail freight charges basically break into two types or categories, and they're not really dependent on length.

The first type is technically called an interline rate. There's lots of other names for this (division, through rate, ISS, freight bill, joint rates, line haul, etc.) but it means the road is listed on the bill of lading/waybill, has rate making authority, and can issue a freight bill. Each road in the route could charge the freight bill party for movement, or they could participate in a through rate and settle with divisions. In this case, the originating or waybilling carrier will issue a freight bill (if prepaid) for the full route to the freight paying customer and then settle via divisions to the other roads. For a collect move the terminating interline road issues the freight bill. If it is "Rule 11" (from the Railway Accounting Rules) then each road can issue their own freight bill.

The second type is a switch carrier. In this case, the railroad is performing a service for an interline railroad and charges them directly. The customer may have no idea the switch carrier is the the transportation route, or exists at all even. Some other terms are handling line, reciprocal switch, or junction settlement. There are slight differences in how rate making works for these. There are also some roads (often a belt line) which are joint facilities and don't charge any freight charge.

The general rule of thumb is that interline carriers charge customers for freight service, but switch carriers charge another railroad.