Re: Making money with a railroad

Russell Strodtz <sheridan@...>


Close but no cigar. Prepaid movements are a newer way of doing business and
in the steam era collect would be the most common form of payment.

The fact that three roads are handling the car equal distances does not mean
each would get the same revenue. The "Divisions" were also part of the
tariff structure.

As I think was mentioned elsewhere if the route was not in the routing
tariff then it would be financial suicide to ship it that way. Each road
would bill the car on a local or intrastate rate.

Terminating road would collect the freight charges. Charges that were
"Advanced" such as diversion, perishable service, livestock FWR, would
be peeled off and paid to the party due. The rest, just like per diem, would
be handled through a settlement process that only paid balances due.
There were of course some special circumstances like the pool roads that
divided the Eastbound UP traffic revenue without taking into account who
handled it. That would be handled in a settlement all by itself.

As some roads got financially desperate they would cheat the system.
Once had a car of fertilizer that had been billed to a point on the
St Paul. Had been diverted before they had handled the car. Kept working on
finding the revenue waybill. Finally talked to someone in Milwaukee and they
had gotten the waybill in the mail and immediately taken it into account.
Asked the guy how they could do that on a movement that they had not
handled. He laughed and said that all they were supposed to be doing is
generating revenue. If they lost it later through the claims or settlement
process it didn't matter because they had been able to use it for some
period of time and would drag their feet on the settlement process.

High finance as applied to railroading.


----- Original Message -----
From: Anthony Thompson
To: STMFC@...
Sent: Monday, 18 December, 2006 20:02
Subject: Re: [STMFC] Making money with a railroad

> c) I assume the BBB and CCC each get paid for hauling the equivalent
> of 500 car-miles across their road. Would the shipper get a bill from
> each RR or would AAA charge them them for 1500 car-miles and pay off
> the BBB and CCC as billed later?

The shipper pays AAA, and AAA pays BBB and CCC. Imagine the
amount of paperwork for all the cargoes over all the railroads.

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