No disrespect taken whatsoever. My previous response wasn’t very clear, and I emphasized the less important points. Certainly grain rail transport is very marginal, at least from the Inland Empire, and I didn’t mean to at all suggest that the moment of prosperity is at hand for the CW or P&L.

First, I’ll try to define my terms a bit better, then go into a little more detail about what I see as the implications for the “new” PCC.

Starting with the hard stuff: – Interline vs. Handling. An Interline railroad has several important characteristics, the most important of which is they have rate making authority for the specific customers and destinations they serve. They will publish and file a tariff showing their rates, but can also have confidential contracts with shippers or agreements with connecting lines.

In a simple example, if a carload of apples is moving from Wenatchee to Atlanta (on a customer open to CSXT and NS) then the shipper will call BNSF (as their serving interline carrier) to get a through rate. BNSF will then look up the rates for NS and CSXT to see how they would price the shipment using various gateways. Typically, they’ll try to maximize their ‘division’ of the revenue. BNSF will then give the shipper a total price, but won’t tell the shipper how much of a division each railroad is going to get. One of the railroads, and it can be either, will then issue a freight bill to somebody (doesn’t have to be the shipper) and then they’ll settle all the divisions through an electronic process called ISS.

Sometimes, shockingly, the railroads don’t trust each other and so the shipper can use a rule from the RR Accounting (Mandatory) Rules to get a confidential quote from each railroad for their portion of the route. That rule is, you may have guessed, rule number 11. The shipper would then have to work through various gateways to get a rate from each piece of the route puzzle and would get a freight bill from each railroad. You can have ‘parent/child’ rates, where some roads settle through a division and one or more roads settle via rule 11. The interchange gateway where the two are separated into different freight bills is called a ‘breakpoint’. Rule 11 moves are considered interline and also have to go through ISS, even if no divisions or rates are exchanged.

A handling carrier, by contrast, has no rate making authority and is simply an operating subcontractor for the serving interline railroad. Their rates are set through a confidential agreement between the railroads. For example, if a shipper in Okanogan, WA on the CSCD wanted to ship apples to Atlanta they would follow the same process as the previous example because Okanogan is a closed point on the BNSF and BNSF still sets the rates there. CSCD will invoice BNSF a handling charge to move the car between Okanogan and the physical interchange point, but CSCD can NOT charge the shipper a freight charge, and the shipper will not know what amount BNSF pays CSCD. Most handling carrier agreements are very restrictive on what/when/where/how the handling carrier can charge. They’re not, for example, usually allowed to levy any type of surcharge (especially fuel), or offer any rebates. There are two more flavors of railroad revenue types, switch and junction settlement, but I think things are confusing enough here.

For the “new” PCC this means a couple of things. First, there isn’t a real difference between interline vs. handling carriers in the processes and administration of car hire and demurrage. Demurrage is totally identical in work load and rules, and car hire only has a few very small differences in rules.

As for the administrative work load of being interline vs. handling, I think the difference is very small. There is maybe a man day or two a month more work, and some possible consequences of cash collections, but these are probably more positive than negative.

I do think the benefits of having rate control vastly outweigh what very small drawbacks there might be. In theory, customers that were closed on the P&L can now route UP. Shuttle trains could also be assembled from various origin elevators to take advantage of these rates, which BNSF didn’t allow before. They will get their fair share of the fuel surcharge. They’ll not be dependent on a disinterested Class 1 marketing person for business..And, they’ll control their own destiny with their rates. If they want to offer incentive rebates they can.

As you very rightly say, time will tell, but I think this slightly raises the odds for these two new roads.