Also, demurrage is something charged to rail customers, not
railroads.
Railroads paid per diem to each other. If you took too long to load
or
unload your cars, you paid demurrage. Or if your cargo sat waiting for
a
boat at a port, the railroads charged demurrage for that. I think it
was
used as a fine, and was much more than per diem.
Many railroads had NET INCOME from per diem, and none of them were
happy
about it, because it was generally lower than the cost of ownership of
the
cars. The NP and GN annual reports from the 1950's complain about it
constantly.
Of course Incentive Per Diem changes all that, but that hasn't happened
yet.
Tim O'Connor
toggle quoted messageShow quoted text
Schuyler Larrabee]
wrote:
It would be very unlikely that
any RR would accumulate non-home road cars for use, since they�d have to
pay demurrage on them, no? So why the surprise that these cars, if indeed
they are being held in anticipation of traffic demands, are home road
cars? And they could have been hauled there from the port and industrial
areas of LA to avoid clogging up the local yards in the LA
basin.
Schuyler, my understanding from talking to
railroaders, and also from perusing data of this period, is that you are
exaggerating the importance of per diem (as do many modelers). In the era
of this photo, per diem was about a dollar a day. Most freight bills
yielded revenue of 50 dollars and up. Of course I am not saying that per
diem was ignored, only that it was only PART of the equation. Making sure
you have cars for revenue loading, especially if you are keeping a
customer happy, was far more important than a dollar a day. And even if
Accounting complained, your boss in the Traffic Department would totally
defend you.
Tony Thompson
