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Re: CORP vs Siskiyou Line Shippers "Shortline myths are driving me crazy"
Author: S.L. Murray
Date: 04-22-2008 - 22:24
If I wasn't clear in the previous threads, or if I implied anybody should shut up, then I certainly apologize. As I tried to explain, this is a complicated subject area and there are lots of exceptions. So these are general statements and specific situations might differ.
In the previous thread there were several things said about short lines which I think are generally false: 1) That short lines are staffed by Class 1 rejects, 2) That short lines aren’t interested in developing new business, and 3) That short lines can charge what they want to serve a customer. I think all three of those are myths. The first two are mostly matters of perception, but the third can be somewhat disproven by facts.
First off, there are indeed many short lines which CAN set their own freight rates. SRY, CLC, STE, MET, Trona, and several others out west are all either interline settling carriers or junction settlement carriers. They all may not issue freight bills, but they are either directly or indirectly party to the rate making. The vast majority of these are older short lines, but there are some which got the right to set and collect a freight rate or surcharge. Surcharges are not myths, they certainly exist, but they’re an exception to the general rule, however, that most short lines can charge what they want to serve a customer.
Next, I should be more clear about what it means to ‘serve’ a customer. Here is where it starts to get complicated, as this is part of the common carrier obligation to provide reasonable service and there are lots of interpretations about what that means. The way I’d phrase it is that it is the standard service a railroad/short line provides to all customers for moving a car. The key parts are that it is regular service and applies to all customers. For a typical short line this would mean taking a car from interchange to the customer’s track and then back out again after it is loaded or unloaded.
Some things which are not part of regular service would be:
1) Respotting a car. You get the car put to your track and taken from it once. If you need it moved around after that one ‘switch’, then the short line can and will usually charge you.
2) Extra switch. If the railroad serves their customers one a day Monday to Friday, but you want them to switch you a second time on Wednesday, then that’s an extra switch and you’ll usually pay.
3) Special switch. If the railroad doesn’t normally (again that word ‘normal’) operate on Sunday, but you need cars spotted then you’ll have to pay for a full crew.
4) Storage. If your siding is full and you can’t take a car so the railroad has to put it on a siding or yard track, they might charge you again to switch or dig it out when you do finally order it in.
5) Intraplant. If you want a car moved from one of your tracks to another then you’ll pay a charge.
6) Rental. If you lease track from the railroad, you have to pay for it. Sometimes these charges are assessed per car, rather than a flat monthly charge.
7) Maintenance. If you don’t lease the track from the railroad, then you own it yourself. You can pay the railroad to maintain it or pay somebody else.
8) Demurrage. Please note that demurrage charges are separate from the above charges. I will another myth would be that demurrage on short lines always works seamlessly and accurately.
Some stuff that is part of regular service:
1) You get more cars than normal, but you have room on your siding to take them. The railroad shouldn’t charge you extra as long as they only have to switch them into you once.
2) If their interchange partner gives cars to them early, say on Friday night, and they don’t operate weekends, they don’t get to charge you extra just because they have to pay extra car hire.
3) “Expensive” cars. They generally can’t charge you extra if they get a car that has higher than normal costs, like a jumbo reefer or haz mat car.
One more time, there are exceptions to all of these generalizations, however. On some charges, especially track or other property charges, you’ll have to pay tax. Other states, like Arizona, will make the railroads apply a tax on everything. Some short lines have worked out surcharge agreements with their Class 1 partners and their customers too.
If you feel you’re being treated unfairly or otherwise badly by your short line, I’d very much encourage you to talk to the short line marketing rep and make sure he explains these charges to you. If that doesn’t work you can go to the Class 1. If that doesn’t work you can go to the NIT League, local PUC, STB, a whole army of consultants, etc. to make sure you understand how and why railroad service works.
stevem at railcarmgt
Hog Slopper Wrote:
-------------------------------------------------------
> Ouch, thought in that prior thread, S.L. Murray
> and Shortline Sammie chastised a poster about
> surcharges and such being myths and that if short
> lines added them the class one might not play with
> them anymore. (As well as implying that the other
> posters really didn't know anything and should
> shut up.) I'm having a REALLY hard time
> understanding all this!!!
> Short lines I deal with, with only a couple of
> exceptions, all add one surcharge or switching
> charge or another, "interlocal agreement charges",
> "track rehabilitation surcharge" (POTB), "state
> service industry tax", "respotting fee" and a host
> of others. But, oh yeah, these are all shortline
> myths are things foamers make up when they try to
> play with trains!!!
> Time to explain some of this, am I getting
> illegally screwed or not??!!
In the previous thread there were several things said about short lines which I think are generally false: 1) That short lines are staffed by Class 1 rejects, 2) That short lines aren’t interested in developing new business, and 3) That short lines can charge what they want to serve a customer. I think all three of those are myths. The first two are mostly matters of perception, but the third can be somewhat disproven by facts.
First off, there are indeed many short lines which CAN set their own freight rates. SRY, CLC, STE, MET, Trona, and several others out west are all either interline settling carriers or junction settlement carriers. They all may not issue freight bills, but they are either directly or indirectly party to the rate making. The vast majority of these are older short lines, but there are some which got the right to set and collect a freight rate or surcharge. Surcharges are not myths, they certainly exist, but they’re an exception to the general rule, however, that most short lines can charge what they want to serve a customer.
Next, I should be more clear about what it means to ‘serve’ a customer. Here is where it starts to get complicated, as this is part of the common carrier obligation to provide reasonable service and there are lots of interpretations about what that means. The way I’d phrase it is that it is the standard service a railroad/short line provides to all customers for moving a car. The key parts are that it is regular service and applies to all customers. For a typical short line this would mean taking a car from interchange to the customer’s track and then back out again after it is loaded or unloaded.
Some things which are not part of regular service would be:
1) Respotting a car. You get the car put to your track and taken from it once. If you need it moved around after that one ‘switch’, then the short line can and will usually charge you.
2) Extra switch. If the railroad serves their customers one a day Monday to Friday, but you want them to switch you a second time on Wednesday, then that’s an extra switch and you’ll usually pay.
3) Special switch. If the railroad doesn’t normally (again that word ‘normal’) operate on Sunday, but you need cars spotted then you’ll have to pay for a full crew.
4) Storage. If your siding is full and you can’t take a car so the railroad has to put it on a siding or yard track, they might charge you again to switch or dig it out when you do finally order it in.
5) Intraplant. If you want a car moved from one of your tracks to another then you’ll pay a charge.
6) Rental. If you lease track from the railroad, you have to pay for it. Sometimes these charges are assessed per car, rather than a flat monthly charge.
7) Maintenance. If you don’t lease the track from the railroad, then you own it yourself. You can pay the railroad to maintain it or pay somebody else.
8) Demurrage. Please note that demurrage charges are separate from the above charges. I will another myth would be that demurrage on short lines always works seamlessly and accurately.
Some stuff that is part of regular service:
1) You get more cars than normal, but you have room on your siding to take them. The railroad shouldn’t charge you extra as long as they only have to switch them into you once.
2) If their interchange partner gives cars to them early, say on Friday night, and they don’t operate weekends, they don’t get to charge you extra just because they have to pay extra car hire.
3) “Expensive” cars. They generally can’t charge you extra if they get a car that has higher than normal costs, like a jumbo reefer or haz mat car.
One more time, there are exceptions to all of these generalizations, however. On some charges, especially track or other property charges, you’ll have to pay tax. Other states, like Arizona, will make the railroads apply a tax on everything. Some short lines have worked out surcharge agreements with their Class 1 partners and their customers too.
If you feel you’re being treated unfairly or otherwise badly by your short line, I’d very much encourage you to talk to the short line marketing rep and make sure he explains these charges to you. If that doesn’t work you can go to the Class 1. If that doesn’t work you can go to the NIT League, local PUC, STB, a whole army of consultants, etc. to make sure you understand how and why railroad service works.
stevem at railcarmgt
Hog Slopper Wrote:
-------------------------------------------------------
> Ouch, thought in that prior thread, S.L. Murray
> and Shortline Sammie chastised a poster about
> surcharges and such being myths and that if short
> lines added them the class one might not play with
> them anymore. (As well as implying that the other
> posters really didn't know anything and should
> shut up.) I'm having a REALLY hard time
> understanding all this!!!
> Short lines I deal with, with only a couple of
> exceptions, all add one surcharge or switching
> charge or another, "interlocal agreement charges",
> "track rehabilitation surcharge" (POTB), "state
> service industry tax", "respotting fee" and a host
> of others. But, oh yeah, these are all shortline
> myths are things foamers make up when they try to
> play with trains!!!
> Time to explain some of this, am I getting
> illegally screwed or not??!!
