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Rail Cost Control Blog - Rail Rates

Rail Rates – When is Enough, Enough?

Carriers and shippers agree: railroads need to be profitable to have a healthy and vibrant railroad system. To provide the best service possible, railroads need to be able to make the capital investment needed to move traffic efficiently and that requires a good return on their investment in track, equipment, and facilities. Carriers and shippers, therefore, agree that railroads need to have a rate structure for their traffic that allows them to operate profitably and efficiently. 

The disagreement between carriers and shippers regarding soaring rates comes down to when is enough, enough? 

In other words, when are the rates and rate increases imposed on rail traffic excessive? This is an important issue as excessive rates can have many negative consequences. Excessive rail rates can be damaging to the U.S. economy, the economy of individual states as well as the financial strength of individual companies. The negative impact occurs because excessive rail rates can: 

  • Cause companies to move production off-shore; 
  • Result in an increase in imports into the U.S.; 
  • Cause bulk traffic to move from rail to already congested highways; 
  • Limit capital investment at operations subject to ever increasing high rail rates; and, 
  • Put companies at a competitive disadvantage in domestic and export markets. 

Shippers understand that rail rates which are too low can be damaging to railroads. Railroads do not, however, seem to fully recognize that excessively high rail rates are damaging to both rail shippers, AND the economy. The question that needs to be answered, is: 

What are “reasonable” rates for railroads to charge for moving their traffic? 

The level of rate increase for rail freight, compared to other benchmarks, is a good indicator of railroad’s concern about the impact of their rates on companies. The illustration below tracks the historical percent change in rail rates against rates for long-distance trucking and inflation. Rail rates are determined using Association of American Railroads (AAR) average revenue per car data.

Rail Rates Increased More than Inflation

The illustration shows that rail rates increased by 94.2 % over the fifteen years between 2004 and 2019 (2019 is the last year reported).

During this same time frame, Long Distance Trucking freight rates increased 31.7%. Rail rates, therefore, increased three times more than the rates for trucking which is the railroad’s primary competitor. Inflation, as measured by the CPI, increased 35.4%. Rail rates, therefore, increased 2.7 times more than overall inflation.

As a result of the change in economics between truck and rail, trucks are now competing against railroads for longer distance movements. The big increase in the cost of rail freight has made trucking less expense than rail for many movements. This has resulted in traffic being taken off rail which contributes to greater congestion on highways. The cost of moving traffic by truck no longer appears to be effective competition as railroads have increased their rates 63% more than truck rates over the last fifteen years.

The remarks in this article should be qualified by saying that we have the highest admiration for the management of railroads. They have been a huge success for their investors as shown by the increase in the value of their stock. Rail management has taken the advantages and disadvantages of the current regulatory system and used it very effectively to create value for its stockholders. That is what effective management of any company should do and the railroads have done it better than most. On the other hand, shippers are concerned that railroads have become too adept at using the existing regulatory environment to their advantage.

Shippers are concerned about the power of railroads to keep churning out rate increases even as shippers fight for survival during these troubled times.

In looking at the current railroad industry I am reminded of a negotiation I was involved in many years ago. In this negotiation I asked the question, “When is enough, enough?” The response was very honest, “It is never enough!” The troubling fact is that this appears to be the mantra when it comes to rail rates today.

 

Escalation Consultants, Inc. developed the Rail Cost Control (“RCC”) program to help shippers reduce rail expenses by managing costs and empowering negotiations. For more information about RCC and other related articles, visit the RCC Blog.

 

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Generate Maximum Savings Through Optimizing

The blog titled “Optimizing to Reduce Shippers Rail Expenses” showed the process shippers can use to reduce rail expenses by millions of dollars while, at the same time, increasing railroad profit by millions of dollars. This value is created by optimizing railroads rates during a shippers bid evaluation. Win/Win opportunities are created by understanding the relationship between: 

The Reduction in Spend a Shipper Receives from Reduced Rates 

in Relation to 

the Increase in Profit the Railroad can Receive from Obtaining Additional Volumes 

 

The question that needs to be answered is how does a shipper determine the maximum value it can create through the optimizing process? Determining maximum value from optimizing is important as it brings the rate level of captive movements into rail negotiations. To do this a shipper needs to know the Pivot Point for awarding competitive carloads on each railroad.     

The Pivot Point represents the point where a railroad makes the maximum profit from reducing a shipper’s rates. 

Once the Pivot Point is reached, it becomes less attractive for a railroad to decrease rates to get the award of more competitive carloads. The Pivot Point shows when a rate reduction for the shipper is no longer offset by railroad profit obtained from an increase in carloads.

Illustration 1 demonstrates what goes into determining the Pivot Point. Illustration 1 shows that a 12% decrease in bid rates for a railroad’s competitive traffic is the Pivot Point. This decrease results in a 30% increase in the railroad’s profit resulting from a 20% increase in competitive carloads for the railroad. To get the most out of rail negotiations it is important for shippers to know the Pivot Point for rate reductions on each of their railroads. 

Rail Cost Control Pivot Point

Calculating the Pivot Point is an iterative process that continues to reduce rates on competitive movements for a railroad. With each rate reduction carloads are then re-award based on the lowest bids for competitive movements to determine the impact on both the railroad and the shipper. 

These changes are continually calculated until the Pivot Point is determined. Illustration 2 provides the results of this iterative process for the railroad used in our analysis. This graph shows the dollar savings for the shipper in relation to the change in rail profit for the railroad. These changes result from rate reductions of 1% to 18% in a railroad’s bid rates.

(Note to visually see the impact on rail profit and shipper savings, all dollar values are shown as positive amounts)

A 12% reduction in competitive rates represents the Pivot Point, as this generates the maximum amount of profit the railroad obtains from the award of more carloads. Railroad profit starts decreasing with rate reductions greater than 12%. Shipper’s savings continue to increase with rate reductions but by a 16% reduction the benefit to the shipper is greater than to the railroad. The source for Illustration 2 is the Rail Cost Control Program (RCC).

Rail Cost Control Pivot Point Optimized

Initially, the Pivot Point normally generates greater value for railroads than shippers.

This is because it represents the maximum increase in profit a railroad can get from reducing its rates. The table below demonstrates this as it summarizes the results for the rail bids used in this article.

 

Table 1

Summary Results for a 12% Rate Reduction on a Railroads Competitive Rates  

Shipper Savings 

$6.7 million 

Increase in Railroad Profit 

$12.5 million 

Increase in Railroad Revenue 

$23.0 million 

Increase in Railroad Carloads 

5,100 

**Table 1 Source: Output Table from the RCC – Cost Optimizer**

Table 1 shows that the railroad makes out much better than the shipper. The railroad makes $12.5 million in additional profit, while the shipper receives savings of $6.7 million. This difference brings rate reductions for captive movements into the optimizing process. Rates for captive movements become part of an iterative process that determines the best split of the benefits between the shipper and railroad through the optimizing process. The source for Table 1 is the Rail Cost Control Program.

Table 2 provides the results from optimizing after rate reductions for captive rates are included in the optimization process. This table shows the shippers expense is reduced by $9.6 million while the railroads profit is increased by $9.6 million. This is a good deal for the railroad as it makes $9.6 million more in profit and $20 million more in rail revenue than it would receive based on its initial bid rates. This is also a good deal for the shipper as its rail expenses are reduced by $9.6 million.

Table 2

Change from Bid Rates Summary Results After Captive Rates are Included in the Optimizing Process

Shipper Competitive Spend Saving

-$6,814,188

Shipper Captive Spend Savings

-$2,826,917

Shipper Total Savings

-$9,641,105

Railroad Competitive Profit

$12,556,031

Railroad Captive Profit

-$2,904,317

Increase in Total Railroad Profit

$9,651,714

Increase in Railroad Spend

$20,135,460

Increase in Railroad Carloads

$5,100

**Table 2 Source – Output Table from the RCC – Cost Optimizer**

When shippers are armed with opportunities created by optimizing rail expenses, they create value for themselves and their railroads. Shippers reduce the rate structure for their movements, while substantially improving profit and carloads for railroads.

The best negotiations are win/win negotiations and optimizing creates this type of negotiation. Therefore, the question is, why haven’t more shippers used optimization to reduce their rail expenses?  The answer is complexity and time constraints. This was the reason for the development of the Rail Cost Control (RCC) Program. The algorithms in the RCC’s Cost Optimizer automatically determine the Pivot Point for each railroad and the results to expect from the optimizing process, for both the shipper and railroad. This is a game changer for many companies.

 

For more information on optimizing rail expenses, check out the Rail Cost Optimizer. 

Escalation Consultants, Inc. developed Rail Cost Control (“RCC”)  to help shippers reduce rail expenses by managing costs and empowering negotiations. Furthermore, for more information about RCC and other related articles, visit the RCC Blog.

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Rail Cost Control - Educate Railroads

Reduce Captive Rates by Educating Railroads

The March 17th blog titled “6 Ways to Make Railroads Compete for Your Captive Movements” stated that it is important to educate railroads. This is an important way to demonstrate why high captive rates are bad for both you and your railroads. Through this process, you educate railroads on the overall impact of high rates on your business. In addition, this process also shows how you can help improve the railroads business model for your commodities.  

The following are five examples of how educating railroads helps reduce rail expenses on captive movements.  

1. Capital Investment Plans to Increase or Maintain Production

Your railroad needs to be shown that investment will not be made at locations where you have high costs. The impact of how high captive rail rates impact your capital investment and production volumes is important for railroads to understand. Railroads have lost substantial business in the past by not listening to their customers. Educating railroads on the downside of high captive rates is a beneficial exercise for both you and your railroads.  

2. Your Competitors Can Be a Big Source of Leverage in Reducing Captive Rates 

There are several reasons for this. One important reason is the location of competitors to your existing and potential customers. When a competitor is close to a customer, this provides a reason for a railroad to provide you with lower rates for movements to that customer. Your competitor will have lower logistics cost, either from a short distance rail move, or by serving the customer by truck.  Either way, if you lose this customer, the railroad also loses all or a major part of the revenue it would get from you. It makes economic sense for both the shipper and the railroad to work together to maintain this business. 

3. Are You Competing Against Imports? 

If the answer is yes, then you and the railroad have the same objective – STOP THE BLEEDING. You both lose out when competing against imports and you will accomplish more by working together than against each other. High captive rates make little economic sense when the objective is to compete more effectively against imports. Reference Blog article “Creating Effective Alliances with Railroads.”

4. Are You a Short Distance from a Port Where Your Product can be Exported? 

If yes, then you have additional negotiation leverage. High captive rates can make it more economical to export than ship domestically. When a shipper makes the switch from primarily serving the domestic market to primarily serving the export market, this can have a large impact on a railroad’s revenue and volumes. This can provide effective leverage in captive rate negotiations.  

5. Understand Problems with Your Railroad’s Business Model for Your Commodities

Many shippers do not take advantage of information that railroads must provide to the STB. This information is provided due to the monopoly power railroad’s hold over a large amount of their traffic. This information can be valuable to shipper’s rail negotiations. One example is the railroad’s Quarterly Fright Commodity Statistics Reports (QCS). Railroad’s QCS reports show what is good and bad about a railroad’s business model for your commodities. This data provides direction for how you can help improve weaknesses in the railroad’s results for your commodities.  

The illustration below provides an example using results for Commodity Code 29114-Petroleum Lubricants on CSXT.

Rail Cost Control - Educate Railroads - Reduce Captive Rates

This illustration shows that CSXT receives more cars from connecting carriers than it originates on its lines. This means that there is not enough production capacity on the CSXT system to satisfy the demand for this commodity from customers on the CSXT system. As a result, few cars are delivered by CSXT to connecting carriers.  

To grow revenue CSXT needs to provide rates that encourage you to increase production. To incentivize this investment,  CSXT needs to, at a minimum, provide lower rates to gateways with other railroads. This would be good for both CSXT and the shipper. CSXT growth is limited without further investment from shippers on its system. High captive rates that stifle growth appear to limit CSXT and its customers revenue for this commodity. This is fertile ground for negotiations focused on reasonable rates for captive movements. 

Railroads current and historical QCS results are included in the Rail Rate Checker section of the Rail Cost Control Program. In addition to carloads, the QCS data in Rail Rate Checker includes the following information for each Class 1 Railroad: 

          • Average rate for moving the commodity 

          • Historical change in average rates  

          • Total revenue from movements of the commodity 

          • How railroads total commodity revenue has changed over time 

This data is available down to the five-digit commodity code level in the Commodities by Railroad section of Rail Rate Checker.  

 

Rail Cost Control (“RCC”) is a program developed by Escalation Consultants, Inc. to help shippers reduce rail expenses by managing costs and empowering negotiations. Furthermore, for more information about RCC and other related articles, visit the RCC Blog.

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Rail Cost Control- Competitive Traffic

6 Ways to Make Railroads Compete for Your Captive Movements 

Last week, Escalation Consultants’ blog, “The Cost of Being Captive to a Railroad” showed that traffic railroads view as captive has rates 107% higher than traffic railroads view as competitive. A shipper looking to substantially reduce rates must, therefore, make a railroad compete for more of its traffic. There are a number of ways to do this. The following are six examples to make railroads compete for your captive movements:  

1) Alternate Logistic Options:

The cost of trucking and transloading need to be understood. The higher the rail rate for a move the more viable other logistics options become. It is always good to know the ceiling price for rail movements. The cost of alternate logistics determines this price because once rail costs are higher than other logistic options, a railroad can lose the business. 

2) Create Geographic Competition:

If you produce a product at more than one plant, you can have railroads provide bid rates from each viable plant to customer destinations. This type of geographic competition can make a railroad compete for movements even though a shipper’s plant only has access to one railroad. Geographic competition can significantly reduce the rates for movements as it makes railroads provide competitive rates at captive locations. 

3) Commodity Swap Agreements:

Commodity swaps with competitors are used to reduce logistic cost for both you and your competitors. The framework for a commodity swap: 

      • You have customers closer to your competitors’ plant than your plant,
      • Your competitor has customers closer to your plant than his plant; and, 
      • The competitor serves your customer and you serve your competitors’ customer. 

Companies do not like competitors to serve their customers. However, when cost savings are very large a swap agreement is too good to pass up. The higher a railroad’s cost for a movement, the larger the savings from a commodity swap agreement. This type of agreement does not normally last for multiple years. The railroad gets the message loud and clear. 

4) Perform an Analysis of the Cost of Building a Rail Spur to Another Railroad:

Many rail spur analyses are performed, but few of these build-outs materialize. The reason, if a rail spur is viable, a railroad is under greater pressure to reduce rates. The railroad will need to lower rates to a level that does not provide the economic incentive for you to build the rail spur. Performing an analysis of the viability of building a rail spur to another railroad can be very valuable in captive rate negotiations.

5) Build a Rail Spur to Another Railroad:

If you build a line to another railroad, then you have two railroads competing for your business. This changes your moves from captive to competitive in the railroads’ pricing model. As demonstrated in the blog, “The Cost of Being Captive to a Railroad”, rates for captive moves are on average 107% higher than rates for competitive moves. Building a rail spur represents significant savings as it generates downward pressure on your rates.  

6) Educate Railroads:

A shipper needs to educate railroads on why high rates are bad for both you and your railroads. This means you need to show the overall impact of high rates on your business. The best way to do this is to provide railroad management with information on strategic plans for your company. The information needs to show how railroads can benefit the most and the least from your business, going forward. Railroads have smart people in management. They need to be educated on the benefits of a more competitive rate structure on their business. 

The issues presented to railroads will be different for every company. Developing these issues is an important part of preparation for rail negotiations. Examples will be included in the next blog. 

These types of issues need to be considered in strategic planning designed to drive down rail expenses for captive movements. Every companies’ situation is different, but things that work best to reduce rail expenses do not change.  

To get a better rate structure for your moves, you must make railroads look at your traffic differently! 

This is what strategic planning for rail negotiations needs to accomplish. Escalation Consultants works with companies to reduce rates by accomplishing this objective. The Rail Cost Control (RCC) program facilitates this process. 

 

Rail Cost Control (“RCC”) is a program developed by Escalation Consultants, Inc. to help shippers reduce rail expenses by managing costs and empowering negotiations. Furthermore, for more information about RCC and other related articles, visit the RCC Blog.

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US Rail Station Captivity Map

Making Your Moves More Important to Railroads

The Rail Station Captivity Map

A basic rule to follow in getting more attention to your issues from railroads:

If you have the ear of people that are important to your railroads, then you make your moves more important to railroads.

Politicians have a big influence on railroads and can have a very positive impact on shipper’s rail negotiations. Politicians are also easy to access as they want to talk to shippers for self-serving reasons. Obtaining political support for your position in rail negotiations costs very little to pursue and can yield a positive return. The Rail Station Captivity Map was developed by Escalation Consultants to support discussions with politicians on railroad issues.

The Rail Station Captivity Map shows that 78.4% of all rail stations in the United States are captive to one Class I Railroad.

Figure A is color coded to show the percentage of all rail stations by state, that are captive to a single Class I railroad. Rail stations are captive if they don’t have either direct or indirect access, through a short line, to more than one Class I Railroad.

Making your movements more important to your railroads, USA

 

The number of states in each captivity range are shown below.

Breakdown of Rail Station Captivity in the US
# of States
% of Stations Captive to One Major Railroad
10 90% – 100%
18 80% – 89%
13 70% – 79%
5 60% – 69%
3 50% – 59%
0 25% – 49%
0 1% – 24%
Note: Hawaii is not included.

Railroads are always concerned about politicians, as they can have a significant impact on how railroads are allowed to operate. Unfortunately for railroad customers, it is frequently difficult to get the attention of politicians on rail rate issues. This is because the problems shippers experience with railroads are complex and not easy to explain.

It is easier to get a politician’s attention with an easy-to-understand picture, highlighting the importance of rail to specific areas they represent. Figure B shows this as it contains the rail station captivity by County for the state of Minnesota. Rail Station Captivity Maps are available, by county and Congressional District, for all states in the United States.

Making your movements more important to your railroads MN.

Escalation Consultants is making state maps available for rail shippers. Simply contact Escalation Consultants to request the Rail Station Captivity Map for your states of interest.  

The State Rail Station Captivity Maps are effective at getting the attention you need to help resolve problems. When shippers want to make movements more important to railroads, getting the attention of Congressmen and Senators is a good way of accomplishing this. Please note: all politicians do not have the same amount of sway over railroads. In addition, there is a right way and a wrong way to deal with politicians. This needs to be understood, and allowed for, in your discussions with politicians.

Rail Station Captivity Maps, for a specific area, are an excellent way of showing railroads and politicians why production will not increase, and capital investment will not be made at an existing location that is captive to one Class I railroad. Captivity maps illustrate areas that will have difficulty in achieving economic development from companies that rely on rail freight.

Shippers need to be able to show that railroads’ monopoly power over captive movements at a facility creates problems for both politicians and railroads.

Rail Station Captivity Maps are proof of the expression: “A picture is worth a thousand words.” Shippers are encouraged to use these maps to increase their leverage in rail negotiations.

 

Rail Cost Control (“RCC”) is a program developed by Escalation Consultants, Inc. to help shippers reduce rail expenses by managing costs and empowering negotiations. For more information about RCC and other related articles, visit the RCC Blog.”

Rail Cost Control

Railroad Strategic Alliances

Creating Effective Alliances with Railroads

Develop Strategic Alliances to Create Greater Value for You and Your Railroads

The term partnering is overused. Many rail shippers refer to any contractual agreement with a railroad as a partnership. The term partnering is even used in agreements with high rail rates for moving shippers’ commodities with thin profit margins. To obtain a better rate structure from railroads, shippers should focus on creating strategic alliances with railroads.

Strategic Alliances establish a process with defined goals for improving revenue and profits for both shippers and railroads.

The alliance needs to detail what is expected from each party and the outcome (goals) each party will receive from the process. Strategic alliances that impact rail rates normally have little to do with the captive or competitive nature of movements. A strategic alliance starts by first identifying common goals between shippers and railroads. An effective alliance then works to better accomplish these goals.

Some alliances are simple while others are complex. A prime example of a complex alliance involves foreign imports. Greater value can frequently be obtained by working together than apart on import issues. This makes imports a prime candidate for a strategic alliance between shippers and railroads.

When imported products become a threat to a company’s domestic production, the shipper and railroad have the same goal – STOP THE BLEEDING.

Imports cause both shippers and railroads to lose volumes and revenue when they impact a company’s domestic production. Railroads have a lot to lose with imported products, as they:

  • Lose all inbound movements needed for domestic production
  • Miss out on outbound movements to customers
  • May not move imported products from the port

Consider the impact of each additional container of imported paper. The railroad loses inbound moves of wood chips, slurry, chemicals, and potentially, coal to the paper mill. This loss of business has a big impact on railroads, suppliers to paper companies, and of course the paper company on outbound moves. This scenario demands a strategic alliance amongst impacted companies, because everyone loses if the paper company can’t compete with imports. All impacted companies need to reduce their costs to stop the bleeding. It doesn’t matter whether a railroads moves are captive when high rates only lead to a loss of revenue. To protect the vested interest in the output of the paper company, rates are determined through the alliance, and not the competitive status of rail movements.

Dealing more effectively with imports is an example of a complex strategic alliance. There are, however, many less-complex types of basic agreements struck between shippers and railroads that accomplish a common objective. A shipper’s capital investment to maintain or improve plant output frequently results in an alliance with its railroad. Capital Investment that also benefits a railroad, should not be made without first receiving an incentive from the railroad to make the investment. This is best accomplished through a strategic alliance which details what is needed from each party.

Not all leverage with railroads stems from the operational parameters of a movement.

With smart people on both sides of an opportunity creating value, great things can be accomplished. Rail shippers need to identify these opportunities because they will determine the best rates and contract terms for moving rail traffic.

The path to a more reasonable rate structure frequently starts by understanding common goals you have with railroads. This process leads to more productive rail negotiations and the creation of greater value for shippers and their railroads.

 

Rail Cost Control (“RCC”) is a program developed by Escalation Consultants, Inc. to help shippers reduce rail expenses by managing costs and empowering negotiations. For more information about RCC and other related articles, visit the RCC Blog.”

Rail Cost Optimizer

railroad car on sunny day at industrial plant

8 Ways to Improve Your Captive Rail Rates

Many rail shippers believe that if they are captive to a railroad at a location, they have little leverage to negotiate better rates.

The graph below shows why this isn’t a good way to look at your rail traffic. The graph contains rail rates for Iron or Steel Strip (STCC 33123) going into the captive rail market of Nashville, TN.

The question to answer with this graph is:

Why Are Rates So Different At a Destination Market Like Nashville, TN that Is Completely Captive To CSXT?

Improving captive rail rates graph

 

The graph shows that some rates are below $2,800, while other rates going the same distance, are above $7,000. The question is: If Nashville is a captive market, then why aren’t all rail rates above $7,000?

There are many reasons why rates for specific movements vary, but the big picture answer is very simple, Effective Strategic Planning. Shippers that make railroads look at their traffic differently get better rates from their railroads.

Strategic Planning causes captive moves to have different rate levels. Significant downward pressure on rail rates can be generated when the following issues are addressed by shippers in strategic planning.

Eight Ways to Get Better Rail Rates at Captive Locations

  1. Railroads need to compete for your business when you have multiple plants that produce the same product.
    • Even when a location is captive to a railroad, a shipper can use geographic competition to obtain lower rates from railroads.
  2. Large shippers that bundle all their rail traffic in an RFP can get better rates at captive locations.
    • In order for a railroad to get more of a shipper’s competitive traffic it must reduce its rates on captive traffic. More traffic is always better than less traffic in rail rate negotiations. RFP’s that take advantage of a shippers entire book of potential business increase negotiation leverage.
  3. Forward storage of products at captive locations.
    • To avoid bottle necks at captive locations, explore forward storage options at sites with rail competition, then truck to captive locations. You don’t have to bypass railroads at captive locations forever. Railroads get the message.
  4. Take freight costs out of the system with commodity swaps.
    • Commodity swaps work best when you have a competitor serve your customer when it’s facility is closer to the customer and you serve a competitor’s customer that is closer to your plant. The greater your rail expenses, the greater the benefit from commodity swaps. Commodity swaps can be a short-term action as a railroad gets the message pretty quickly.
  5. High rates create the economic incentive to invest capital to increase your logistics options.
    • The railroad needs to make it uneconomical for a shipper to take traffic off its system. If its rates are too high then other logistic and capital investment options become more attractive. A railroad must reduce cost to make these options less attractive.
  6. Railroads need to compete against trucking on short and mid distance moves.
    • Large rail rate increases allow trucks to compete with rail for longer distance moves. The cost of trucking and transloading needs to become the ceiling price for short and mid distance moves.
  7. Political pressure!
    • One of the best and easiest sources of leverage to create is political pressure. Politicians want to talk to you as your company is a great source for tax revenue, political contributions, and you employ many voters. Politicians can be a great benefit because if you have the ear of someone that is important to the railroad, then you become more important to the railroad. There is a right way and a wrong way to address politicians and all politicians are not equal which should be considered in your strategic planning.
  8. Foreign Imports: 
    • It doesn’t matter if a railroads moves are captive, if imports are reducing your domestic production. The shipper and railroads have the same goal with imports – STOP THE BLEEDING. Additional information on this topic will be contained in an upcoming Blog Article, on 2/10/2021.

 

For the last forty years, Escalation Consultants, Inc. has conducted the most highly recommended Rail Negotiation Seminar for shippers, and we have seen the results of changing how railroads view a shipper’s traffic.

Our Rail Cost Control program and consulting services are used extensively by shippers to reduce the rate structure for their movements.

Rail Cost Control (“RCC”) is a program developed by Escalation Consultants, Inc. to help shippers reduce rail expenses by managing costs and empowering negotiations. For more information about RCC and other related articles, visit the RCC Blog.

Rail Cost Optimizer

Escalation Consultants has been serving railroad customers since 1979.

The Rail Cost Control Program is an Escalation Consultants Inc. product. For the last 40 years Escalation Consultants has assisted companies in reducing the delivered cost of their products. We are normally involved with large and small rail shippers in reducing rail expenses on more than a billion dollars in rail spend annually.

Escalation Consultants has spent decades developing tools that automatically seek out and quantify opportunities for reducing rail expenses. The RCC contains these tools and they allow you to look at your movements differently in order to create more cost-effective negotiations with railroads.

To learn about Escalation Consultants Inc, more visit www.EscalationConsultants.com

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