Mileage
Equalization
ACACSO
November 2011
0
Introduction
1
•
DEFINITION OF MILEAGE EQUALIZATION
•
MILEAGE ADJUSTMENTS
•
MONTHLY PROCESSING
•
SAMPLE REPORT
•
10 YEAR TREND
•
CANADIAN EQUALIZATION
Definition of Mileage Equalization
•
Mileage Equalization is the process by which RR’s
are compensated for the movement of excessive
empty routing of cars
•
Implemented as part of an agreement on how RR’s will be
compensated for private car moves
In the US it applies to only Tank cars and is covered
under Tariff 6007
• In Canada it is covered under individual tariffs by CN
and CPRS
•
•
2
There is no equalization in Mexico
Definition of Mileage Equalization
•
•
•
3
US mileage equalization is covered under
tariff 6007 Item 187
Rate is set annually in September retroactive
to the first of each year and is determined by
the formula in the Ex. Parte 328 agreement
between RR’s and tank car owners
Equalization invoices are issued by Railinc in
July for movements during the previous year
Mileage Adjustments
•
4
Adjustments to equalization miles are sent to
the RR’s and can be made for up to three
years
•
Adjustments for the current accounting year,
including any adjustments for prior accounting
years must be reported by May 20, of each year
•
Adjustments made after May 20 will be reported
in the current year, not the year of the adjustment
Mileage Adjustments – Car Owners
If RR’s do not automatically adjust discrepancies,
then report discrepancies to RR’s in writing, copy to
AAR
• Carriers have 30 days to make adjustments. Advise
car owner when adjustment made – ALSO ADVISE
AAR IF OWNER REQUEST FOR ADJUSTMENT
SHOWS COPY TO AAR
• AAR will make adjustments if the Rail carrier fails to
respond to your request (This is done prior to year
end)
•
5
Monthly Processing
•
RR’s report loaded and empty mileage data on the
CHDX file to Railinc
•
•
Type 900 Summary records indicates all mileage that
should be included in the equalization account
Railinc pulls Equalization records from the CHDX and
creates Equalization Registers
•
•
Registers are sent to Car Owners and RR’s monthly
Registers are accumulated by Car Mark Owner
Data is accumulated on an annual basis
• Railinc prepares and sends annual equalization
invoices
•
6
Monthly Processing - Calculation
•
Accumulated by Car Mark Owner; reported by
RR and month
Aggregate Equalization Loaded Miles
Aggregate Equalization Empty Miles
Multiply Loaded Miles by 1.06 (106%)
Subtract Adjusted Loaded Miles from Empty Miles
Result is Excess Empty Miles
Multiply Excess Empty Miles by Equation Rate
Result is Equalization Amount Due
7
Sample Report
Equalization of Private Tank Car Mileage
March 2011
Year to Date by Paid-To Owner: DEFX
DEF Tank Car Company
Paid To
Mark
Paying
Owner
Paying
Mark
Date
Earned
Loaded
Miles
Empty
Miles
DEFX
ABCD
ABCD
1101
1102
1103
772
1804
575
1974
6
3270
3151
3151
5250
5250
DEFX
OWNER TOTAL YTD
USING YTD MILEAGE @ 0.67/MI – TOTAL BILL
8
Empty Miles Over Percentage
106% of Loaded
1909
1909
Variance
166.6
166.6
$1,279.03
Sample Report
Equalization of Private Tank Car Mileage
March 2011
Year to Date by Paid-To Owner: DEFX
DEF Tank Car Company
Paid To
Mark
Paying
Owner
Paying
Mark
Date
Earned
Loaded
Miles
Empty
Miles
DEFX
ABCD
ABCD
1101
1102
1103
772
1804
575
1974
6
3270
3151
1.06x 3151
5250
5250
DEFX
OWNER TOTAL YTD
Empty Miles Over Percentage
106% of Loaded
1909
1909
Variance
166.6
166.6
3341
USING YTD MILEAGE @ 0.67/MI – TOTAL BILL
9
$1,279.03
Sample Report
Equalization of Private Tank Car Mileage
March 2011
Year to Date by Paid-To Owner: DEFX
DEF Tank Car Company
Paid To
Mark
Paying
Owner
Paying
Mark
Date
Earned
Loaded
Miles
Empty
Miles
DEFX
ABCD
ABCD
1101
1102
1103
772
1804
575
1974
6
3270
3151
1.06x 3151
5250
5250
DEFX
OWNER TOTAL YTD
Empty Miles Over Percentage
106% of Loaded
1909
1909 x$.67
Variance
166.6
166.6
3341
USING YTD MILEAGE @ 0.67/MI – TOTAL BILL
10
$1,279.03
US Tank Car Equalization – 10 Year Trend
$25,000
$0.80
A
m
o $20,000
u
n
t
(
I
n
$0.65
$0.67
$0.70
$0.63
$0.57
$0.60
$0.53
$0.48
$15,000
$0.39
$0.38
$0.39
$0.41
$0.50
$0.44
R
a
$0.40
t
e
T
h $10,000
o
u
s
a
n $5,000
d
s
$0.30
$0.20
$0.10
)
$-
$2001
2002
2003
2004
2005
2006
Total Invoiced
11
2007
Rate
2008
2009
2010
2011
Canadian Mileage Equalization
Canadian equalization covers moves within Canada and are
determined by tariffs by CN and CPRS
• CN Equalization:
•
•
•
•
•
•
CPRS Equalization:
•
•
•
•
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Covered under CN Tariff 6544 for moves within Canada
All private marked cars – despite car type are covered under the tariff
Mileage Adjustments should be made under the rules as outlined in US
tariff RIC-6007
Allowance = 6%
Rate = CDN $1.00
Covered under CPRS Tariff 6 for moves within Canada
Applies to covered hoppers and Tank cars only
Disputes to mileage/invoice must be made within the terms of the invoice
Allowance = 6%
Rate = CDN $1.10
Questions?
13