• CMQ Profitability

  • Discussion of present-day CM&Q operations, as well as discussion of predecessors Montreal, Maine & Atlantic Railway (MMA) and Bangor & Aroostook Railroad (BAR).
Discussion of present-day CM&Q operations, as well as discussion of predecessors Montreal, Maine & Atlantic Railway (MMA) and Bangor & Aroostook Railroad (BAR).

Moderator: MEC407

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  by Cowford
 
Does anyone have a handle on current traffic conditions? I ask as CMQ YOY carloadings have been up dramatically in the past two quarters (+56% and +38%, respectively), but revenue gains don't match. Salt gains may be due to new business gained on the Newport sub, I am told... but what about the rest? My guess that that cars handled on haulage with PAR are counted? Backing out "same store sales" and adjusting for rate increases, the additional traffic is likely bringing in less than $500 per car.
  by gokeefe
 
That would seem to make a lot more sense than anything else. Is it normal for haulage rights to pay so little?
  by Cowford
 
Haulage fees vary greatly by agreement, taking into consideration length of haul, competitive factors, etc. But an easy way to look at haulage is as a railroad subcontracting out a portion of their operations. Put that way, the railroad granted the haulage rights (the tenant) is not going to pay "retail" their subcontractor (the host), right? Also consider that such agreements typically require that each car stays in the account of the tenant (meaning the host has no car-hire liability). The tenant is also responsible for loss and damage while on the host's line.
  by gokeefe
 
That being said does less than $500 per car seem reasonable?
  by Cowford
 
I couldn't comment on what would be reasonable in this case, but railroads don't (usually) profit substantially from haulage traffic (or competitive overhead business, for that matter).

Just to be clear, I am NOT saying the haulage fee is $500 per car. I've no idea what the arrangement is, and wouldn't broadcast it if I did... just saying that incremental YOY revenue, based on all things being equal, works out to that. There is another factor at play here, that being traffic mix. If log carloadings are up and chemical loadings are down at the same time, for instance, you're certainly going to see a drop in average revenue per car. Quarterly statements provide a rough breakdown by line of business, but don't provide sufficient detail to dig further.
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