A Shipper’s Guide to Rail Freight Rates - RSI Logistics

A Shipper's Guide to Rail Freight Rates

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Why We Wrote This Guide

Our rail logistics group has been negotiating and managing rail rates for more than 30 years. In this guide we review the history of rail rates and share some ideas for negotiating and managing rail rates. We have also included some of the features and reports of Rail Impact, our rail rate analysis software.

This overview is geared towards bulk commodity shippers in North America.

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Table of Contents

4 - 18 The History of Rail Rates

19 - 24 Today's Rate Environment

25 - 34 Negotiating Rail Rates

35 - 41 Tips for More Effective Rail Rate Negotiations

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Understand the History of Rail Rates

"There is nothing new in the world except the history you do not know." Harry S. Truman

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Understand the History of Rail Rates

Historical Context

For much of the U.S. rail industry's history, the industry and especially its freight rates were heavily regulated by the Interstate Commerce Commission (ICC). All rates were published in tariffs subject to ICC approval and were regularly challenged by shippers to further delay their actual implementation.

When the Interstate Highway System was built in the late 50's and early 60's, long haul trucking exploded. Increased highway competition radically changed the U.S. transportation landscape to trucks from rail, a shift that the railroads and ICC refused to acknowledge. Within a decade multiple major railroad bankruptcies and a near collapse of the industry were the consequence of business lost to motor carriers due to high regulated rates and dismal service.

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