This article instructs how to calculate the cost of rail freight.
Shipping by rail is complex and requires more than simply getting a rate from the railroad.
Typically, there are handling requirements that increase the cost of shipping by rail.
Additional handling can include trucking to and from the rail siding, hiring contractors to load, unload, and secure your load, leasing track space and railcar rental fee.
First, determine if rail is right for what you're shipping.
Size Matters - Rail freight is competitive with trucking at higher weights or with dimensional shipments.
One railcar has the capacity of three to four trucks but may only cost a twice as much to ship.
If you can't answer yes to at least one of the following questions then shipping by rail is likely not your best option: 1.
Does your shipment weigh more than 80,000 pounds? 2.
Is your shipment wider than 8.
5 feet? 3.
Is your total shipment length longer than 48 feet? 4.
Is your shipment taller than 14 feet? 5.
Is your shipment moving more than 500 miles? If your freight is travelling a long distance then more than one Railroad Company will likely be involved in your shipment: the origin railroad, any intermediary railroads and finally the delivering railroad.
Ideally, the less railroads that handle your freight the better since each railroad involved increases your total freight charges.
There are three ways to determine your rail route.
1.
Purchase a rail atlas or rail routing software.
2.
Contact a railroad's sales representative to assist you.
3.
Work with a professional shipment coordinator or 3PL.
An example rail route from Kansas City, KS to Denver, CO might be: Load up on the Kansas City Terminal Line in Kansas City where they will give the car to the Union Pacific.
The Union Pacific will then take the car from Kansas City, KS to Denver, CO where they will give it to the Denver Rock Island Railroad for final delivery in town.
In the industry rail routes are written in short hand.
The example above would be as follows: KCTL - KNCTY - UP - DENV - DRIR Third, contact each handling railroad for a rate.
Once you've collected all of the rates to get your shipment to destination you'll likely know if rail is competitive with trucking or not.
For many shipment types the railroad will provide a railcar.
The use of a railroad provided railcar is included in the rate, however, the "late fees" associated with not using in the time allotted are very expensive.
Other handling costs will need to be determined in addition to the rail cost.
Fourth, locate and price load and offload sites.
You are responsible for all handling costs associated with transporting your shipment.
This includes moving it to a rail siding, loading it, securing it and unloading it from your rail car.
You will need access to your rail car at either end of the shipment.
You will also need to contact and price the necessary labor and equipment.
You may also want to hire a service to monitor your shipment to prevent any problems and alert you of its impending arrival.
These costs can impact the affordability of the rail shipping cost.
Conclusion Rail shipping offers savings in the right circumstance.
The rail rate is just one piece of the total rail shipping cost.
Some shippers hire experienced logistics companies like RailShipments.
com to simplify the shipping process.