Cost & Rate Analysis
Freight rates are the fundamental component of the rail industry, being equally as important to shippers and customers as they are to the railroads themselves. RLBA provides its expertise to shippers nationwide, analyzing the current and forecasted market to enable clients to make informed decisions and negotiations with rail carriers.
Select Project Descriptions
NORTHEAST MARYLAND WASTE DISPOSAL AUTHORITY:
RLBA assisted the Northeast Maryland Waste Disposal Authority (the Authority) to renegotiate its expiring rate and service contract terms which govern the movement of municipal solid waste between the Authority’s Shady Grove Transfer station in Derwood, MD and the Montgomery County RRF in Dickerson, MD and ash in the opposite direction between the facilities, both of which are served by CSX. RLBA took a comprehensive and strategic approach to the renegotiation and commenced with a thorough review of the extant contract. RLBA met with Authority staff and its waste contractor to list and prioritize rail contracting issues, conducted an operations review and on-the-ground reconnaissance to better understand the rail operation and costs incurred by CSX, performed a Rail Traffic Controller (RTC) simulation and an URCS costing analysis of the current operations to understand the contribution above variable costs which CSX sought, contributed to an alternative truck transportation costing effort, developed a negotiating strategy, discussed the strategy with Authority staff and then assisted the Authority with executing the strategy while providing information to assist the Authority’s positions with respect to key negotiation elements.
Engaged by a confidential private petroleum company (the client) interested in entering the railroad industry for the first time in its 50+ year history, R.L. Banks & Associates, Inc. (RLBA) investigated market feasibility, performed freight rate due diligence and analyzed all possible routes and destinations for rail transload appropriateness. A relatively new market in post World War II United States, crude oil by tank car has become increasingly popular following development of the Bakken oil deposits in North Dakota, resulting from a lack of appropriate pipelines. The client, interested in bypassing the backlog in US pipeline capacity, investigated moving upwards of 70,000 barrels of oil daily by rail from the upper Midwest to Illinois, Louisiana and Texas. RLBA helped the client identify the best location for the construction of transload facilities, performed due diligence on rates provided by freight railroads and helped ease the client’s concerns over a possible long term lease on tank cars by investigating the feasibility of petroleum tank cars. Special attention was paid to the influence of fuel surcharges in the provided freight rate and its impact on overall profitability of the proposed bulk shipments.