Tom did a great job of explaining how it works with railroad owned equipment. I'll try to provide an explanation of how it generally works with private cars. Pour a drink and settle in.
Cars owned by the big leasing companies such as Union Tank Car (UTLX); Trinity (TILX); Chicago Freight Car Leasing (CRDX); SMBC/ARL (SHPX) or GATX - to name a few; are leased to shippers for terms typically running anywhere from 5-10 years.
Many shippers will go with a full service lease meaning the leasing company is responsible for repairs to brakes, wheels, draft gear and so on. The shipper/lessee is normally responsible for stuff like gaskets, caps and chains, dome lids, graffiti removal, valves and fittings and so on. On hopper cars this responsibility can also be extended to cover discharge gates, slide tracks and capstans. Lessors cover the cost of regulatory compliance on the car itself while the shipper/lessee owns and is responsible for the car lining if there is one. If a private car becomes bad order enroute; the railroad will stop the car, make the necessary repairs and charge the car owner according to the same AAR shop rates Tom mentions in his post above. If the repair is to an item which is the responsibility of the car owner, they absorb the cost. If the repair is to an item which is the shipper/lessees responsibility, the car owner will pay the railroad and rebill the cost to the shipper/lessee. Damage to the body of a private car or to the safety appliances, which cannot be attributed to a railroad, becomes the responsibility of the shipper/lessee.
Railroads price shipments moving in private cars differently than shipments moving in railroad owned equipment; the primary difference being that rates for shipments in railroad owned equipment include an equipment cost whereas rates for shipments in private cars do not. For through rated shipments, the shipper will pay a single freight invoice and that revenue is divided up among the railroads according to private division agreements. Shippers can also use what is referred to as Rule 11 whereby rates are negotiated individually with each railroad participating in a move. Each railroad then invoices freight to the shipper only for the portion of the move over their respective lines.
In the past; railroads paid the car owner a certain amount per loaded mile traveled which the car owner passed along to the car lessee. The amount paid was determined by the type of equipment and it's age along with some other factors. Most private car shippers today have zero rated their shipments for mileage earnings in return for a rate reduction that reflects the loaded mileage the car would otherwise have earned. This allows the shipper to realize that value more or less immediately whereas the mileage payments used to be paid about four months or so after the shipment had actually taken place.
Under private car mileage equalization rules; railroads will also charge car owners for excess empty mileage. Basically a private car is allowed total empty miles equaling 106% of the loaded miles the car travels annually. Any mileage in excess of that number is charged to the car owner who passes the cost along to the shipper/lessee.
Historically; railroads handled movement of private cars to the shop under these same mileage equalization rules but; in the past few years UP and BNSF both have begun to charge freight on cars moving to a shop when the empty shop move is not immediately preceded by a loaded revenue move. The other Class 1 railroads still honor mileage equalization for all shop moves - not just those immediately preceded by a loaded revenue move.
Railroads do not charge demurrage on private equipment, regardless how long it is held, so long as the private car is held on private track. They will charge demurrage for private cars held on railroad tracks; however.
In terms of the tracking of private cars - both loaded and empty - most private car shippers utilize rail fleet tracking software put out by a number of companies such as Intellitrans; ShipExpress, Bourque Data Systems or UPDS to name a few. All rail cars - both private and railroad owned - are equipped with two AEI (automated equipment identification) tags attached to either side of a rail car. These software providers gather the location information generated when a car passes an AEI scanner - typically located at the entrance and exit points of classification yards and at wayside installations spaced at roughly 40 mile intervals along main line and secondary main line trackage. The information is transmitted to shippers electronically and available for viewing in various formats. This has taken the place of the tracing clerks Jack mentions in his post. I'll note the cost of these rail fleet / rail shipment tracking systems is borne by the shipper.
This kind of gives you an overview of how private cars are handled on our railroads.
Curt
