Thursday, April 28, 2022

Waybills, Part 96: computing freight charges

 This topic may seem a little arcane, and indeed it isn’t something we particularly need to model, but I think it is interesting nonetheless to understand how it worked, in the pre-Staggers days when ICC regulations controlled every aspect of freight rates and charges.

A summary can be found in a number of places, but to my mind, the clearest by far is that provided by Larry Sagle in his excellent though often overlooked book ( Lawrence W. Sagle, Freight Cars Rolling, Simmons-Boardman, New York, 1960), of which I show the cover below.

Larry’s Chapter 2 describes the Bill of Lading and Waybill processes very clearly, and also the calculation of a freight charge. It’s based on the sample Bill of Lading shown below. In this instance, the agent has computed the shipping charge, which was then prepaid by the shipper. The stamp at lower right shows that this pre-payment was made.

To complete this Bill of Lading, in order to determine the freight charge for pre-payment, the agent first consults the Uniform Freight Classification, the book shown below, of which I have a copy, You can see its size.

Looking under “lamp shades,” he finds the commodity number, 55790. Then in the back of the same book he finds that the carload rating for this cargo is 85. This is one of the essential numbers in the rate. Next he turns to another book,  the National Rate Basis Tariff, Book 1-A, which was in force in the 1950s; I don’t happen to have a copy of that book.

The agent now looks under the destination state for this cargo, Illinois, where he finds the “rate base,” which in this case is 767. Consulting the appropriate table in the rate book, he finds number 767 in the horizontal column and reads over to number 85 in the vertical column, and this shows, at the intersection of these two, the basic rate, $3.57. This is the rate per hundred pounds, or “hundredweight.”

Let’s assume the weight of the cargo is 10,500 pounds. That exceeds the minimum weight for this class of cargo, therefore the actual weight is used (otherwise, any cargo weighing less than 10,000 pounds would be charged as though it weighed 10,000 pounds). Since 10,500 pounds is 105 hundredweights, we multiply that by $3.57, giving the total cost, $374.85. (The Bill of Lading above has an arithmetic error — one of the many reasons waybills got corrected en route.)

When the cargo arrives at destination, the agent at that destination begins the process of assigning the freight revenue. In this case, as you see by the Bill of Lading above, the routing is B&O all the way from Baltimore to Chicago, thus B&O would receive the entire freight revenue. If more than one railroad were involved in the route, the revenue would normally be divided in proportion to their respective mileages. That is, if one road carried the cargo for 28% of the total miles, they would get 28% of the revenue.

In fact, it wasn’t quite that simple, as the originating railroad got a little extra fee, as did the delivery road, to compensate for their added switching costs. But the idea that each participating road in the mileage got a share of the revenue is the main point to be made. And that’s why, if the empty needed to be sent back over its arrival route, it was routed over those same roads that moved it loaded: they had a share in the revenue, now had to share in the cost of moving the car back to its origin.

As I said at the outset, we don’t model things like rates (or very few of us do), but to me, it’s still intriguing to understand what was involved. That was the point of this post.

Tony Thompson


  1. I wonder why 10,000 lbs of Widgets in a boxcar should have a different rate than 10,000 lbs of Doohickeys in an identical boxcar. Or were the rates basically identical?

    1. It's about value. You can appreciate that 10 tons of cement is less valuable than 10 tons of grain; and then think about 10 tons of furniture or auto parts. Rates are lower on lower-value cargo because the proportional cost of shipping can be about the same. But if you read about the endless battles about the exact shipping rate for innumerable almost identical commodities, you realize it's really a complicated story. Perhaps not one for which a simple answer is possible.
      Tony Thompson