Rail Rate Update Courtesy of RSI Logistics Jan. 21, 2014 RAIL FREIGHT RATES RSI monitors rail rates across a number of industries as we assist companies in managing their rail rates. We track this information by carrier, rate authority, commodity, and transportation lane. A sampling of recent changes that we have noted during the past month are summarized below. Seeing this data over a range of commodities can be helpful in understanding pricing trends. Tariff Commodity Update BNSF 90054 Alcohols Price adjustments of 3% to 5% effective February 1, 2014. STCCs 2911982, 2911926, 2911927, 2911942, 2911720 moving to BNSF 90093 effective April 1, 2014. BNQ 105784 & 104668 Frozen Meat, Poultry, and Fish Price adjustments of average 3% effective February 12, 2014 BNSFQ 100805 Farm and Construction Machinery Price adjustments of average 2% effective March 1, 2014 Paper Products & Pulp mill Feedstocks Price adjustments of average 3% effective April 1, 2014 CSXT 2042 Seeds Price adjustments of average 4% effective February 1, 2014 CSXT 2046 Starch Price adjustments of average 1.5% effective February 1, 2014 CSXT 4312 Oils Price adjustments of average 4.5% effective February 1, 2014 CSXT 37149 Auto Parts Price adjustments of average 12% effective February 1, 2014 CSXT 4949 Toxic by Inhalation Hazard Chem Price adjustments of average 5% effective February 1, 2014 CSXT 28122 Caustic Soda & other Chloralkali Price adjustments of average 7% effective February 15, 2014 CSXT 28416 Bio Diesel Fuels Price adjustments of average 6% effective February 1, 2014 CSXT 3500 Bricks and Building Products Price adjustments of average 5% effective February 1, 2014 CSXT 3503 Roofing Granules Price adjustments of average 5% effective February 1, 2014 CSXT 4300 Gypsum Wallboard Price adjustments of average 5% effective February 1, 2014 CSXT 4655 Fertilizer Compounds & Material Price adjustments of average 0.1% effective February 1, 2014 CSXT 4656 Sludge Price adjustments of average 0.1% effective February 1, 2014 CSXT 4668 Phosphates (Unit Train) Price adjustments of 0% to 4% effective February 1, 2014 2419 Science Parkway | Okemos, MI 48864 | (517) 908-3650 | www.rsilogistics.com | [email protected] RAIL CARRIER COST INDEX - ALL INCLUSIVE LESS FUEL The railroads’ business costs have held steady over the past year according to the American Association of Railroad’s cost index: Year Qtr. All Inclusive Less Fuel Forecast Error Error 1 Year Adjusted Change 2012 Q4 Q1 Q2 Q3 Q4 0.0 -0.6 0.0 0.3 -01 100.0 99.3 99.6 100.9 99.6 2013 100.0 99.9 99.6 100.6 99.7 -0.4% Note: This index measures cost changes for the major components of railroad operating expenses including labor, materials, supplies, equipment, depreciation, interest, and other expenses. FUEL SURCHARGES The most recent fuel surcharge rates for the major carriers are below. Mileage Based FSC (U.S. Dollars) Fuel Surcharge Dec. Jan. Feb. Percentage Based FSC Fuel Surcharge Dec. Jan. BNSF ($2.50 strike price) CN7403 Bulk CN7403 Carload CPRS9700 Bulk 1st Half of Mo. CPRS9700 Bulk 2nd Half of Mo. CPRS9700 Carload 1st Half of Mo. CPRS9700 Carload 2nd Half of Mo. CSX KCS UP BNSF2 ($2.50 strike price) CN 7401 CPRS9000-1st Half of Month CPRS9000-2nd Half of Month CSX FXE (international) KCS KCS Mexico NS64-4 UP 0.35 0.34 0.35 0.3048 0.318 0.34 0.299 0.312 0.34 0.3048 0.318 0.35 0.33 0.34 TBD 0.37 0.375 0.38 0.36 0.375 TBD 0.48 0.44 0.36 0.46 0.43 0.35 0.48 0.44 0.36 Feb. 14.00% 18.75% 31.20% 30.40% 13.50% 17.14% 31.60% 32.40% 14.00% 18.06% 30.80% TBD 31.20% 21.00% 31.20% 25.00% 14.80% 26.50% 28.40% 21.50% 28.40% 25.50% 12.00% 26.00% 30.00% TBD 30.00% 25.50% 13.60% 26.50% Link to view our online FSC table for additional carriers & months. FUEL INDEXES Rail carrier fuel surcharge rates are typically indexed to the 2 months prior price of West Texas Intermediate Crude (WTI) or the On-Highway Diesel Fuel Price (U.S. Monthly Average) (HDF). The rates below are in U.S. dollars. Index Sep. Oct. Nov. Dec. West Texas Intermediate Crude (WTI) Or-Highway Diesel (HDF) 106.29 3.961 100.54 3.885 93.86 3.839 97.63 3.839 2419 Science Parkway | Okemos, MI 48864 | (517) 908-3650 | www.rsilogistics.com | [email protected] EFFECTIVE NEGOTIATIONS REQUIRE PREPARATION How prepared are you for your discussions with the railroads? The most successful rail rate negotiations result from taking the time upfront to analyze your situation as well as the railroads’. Some things to consider are: How profitable is your business to the railroad relative to other business they handle? Is your railroad losing market share to its rail competitor? Are there competitive alternatives that you can consider? Even if your business is captive to one railroad, are your rail rates reasonable? Your analysis, coupled with data from the Surface Transportation Board, will provide insight into how your rates fit into the overall railroad marketplace. Contact us to learn more about the preparation tools that can result in more effective rail rate negotiations. “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” ABOUT RSI For 3 decades RSI has been making it simpler and more cost effective for organizations to ship by rail. We enable clients to reduce transit costs and improve supply chain control through software, consulting, and services. RSI serves clients from nineteen locations and is organized into five service areas: • • • • Rail Logistics Services Technology • RSInet Rail Management Software USRail.desktop Rail Rate Analysis Software Terminal Operations Bulk Liquid ISO Tank Transportation USRail.desktop Contact us to learn more. 2419 Science Parkway | Okemos, MI 48864 | (517) 908-3650 | www.rsilogistics.com | [email protected]
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