Based on our experience in the rail industry we know that it is possible for a shipper to obtain rates which afford a competitive cost advantage while still allowing railroads to provide a superior service, recover their costs and earn a reasonable return. It is not often however that rates are initially offered at these levels by railroads. 

Shippers must be proactive in this process by determining reasonable rate levels, setting rate targets (goals), developing a strategy to reach those targets, and implementing that strategy using the best tools available.  We help our clients to follow this approach by providing an understanding of the two primary bases for setting rail rates; the "absolute" basis provided by cost of service estimates, and the "relative" basis, determined by rates on other traffic in the same market.

By providing access to information regarding the railroads' cost of service we offer insight into one of the methods by which rail rates are set, putting our clients on equal footing with their counterparts from the railroads. Knowledge of the cost structure of your negotiating opponent also provides the parameters of a rate range within which a settlement might be reached, as well as the margins available at each point within that range.

Commonwealth uses a second standard against which to benchmark client rates.  We develop information on the rates paid by competitors for moving products with like transportation characteristics in the same or proximate traffic lanes.  Client rates are measured against both best in lane and the weighted average benchmark for all of the traffic in the lane.

Application of competitive data for use in benchmark analyses can be restricted to specific movements, or applied across all rail movements, at the client’s discretion.   Competitive data can also be used to evaluate supply sources for markets into which the client is considering entry, or just to add to the portfolio of information available on competitors.  The market rate data we develop also provides an invaluable negotiating tool to be used in achieving client target rates.