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Optimizing Rail Shipping with Through Rates and Rule 11: The Benefits of Working with a 3PL.

Updated: Mar 12, 2023

Rail shipping can be a complex process, especially when it involves multiple carriers in a route. Shippers have the option of using either Through Rates or Rule 11 rates to simplify the payment process. While Through Rates offer simplicity, Rule 11 rates provide transparency and negotiation leverage, resulting in potential cost savings. However, negotiating individual Rule 11 rates can be time-consuming and require significant knowledge of the industry.

This is where a rail logistics partner like Solurail Logistics Inc can provide significant value. By working with a rail logistics partner, shippers can leverage the benefits of both Through Rates and Rule 11 rates, while also benefiting from industry expertise and technology.

Through Rates offer shippers the advantage of simplicity. With a single rate that covers all railroads in a multi-railroad shipment, shippers do not need to negotiate individual rates with each carrier. Through Rates tend to reduce administrative burdens, making them an attractive option for shippers who prioritize efficiency and ease of use.

However, Through Rates do not offer transparency in billing and can result in shippers missing out on potential savings. The origin carrier may negotiate with other carriers to receive a substantially lower rate overall, but the origin carrier has little incentive to pass these savings along to the shipper. Since shippers are not aware of these negotiations, their price will likely stay the same, while the origin carrier enjoys higher revenue on their portion of the movement.

On the other hand, Rule 11 rates involve independent negotiating and billing with each railroad in a joint movement. The shipper works directly with each carrier in setting up, billing, and paying that railroad's portion. While this process can be time-consuming, the benefits can far outweigh the costs. Rule 11 rates provide transparency, increased options, negotiation leverage, and rail spend reductions. With Rule 11 rates, shippers can negotiate with each carrier along the route and take the savings themselves. Even if shippers can only negotiate with a few carriers, they may receive a lower overall rate.

Working with a rail logistics partner like Solurail Logistics Inc can help shippers navigate the complexities of rail shipping and leverage the benefits of both Through Rates and Rule 11 rates. A rail logistics partner can handle the negotiation process on behalf of the shipper, ensuring that each carrier is invoicing accurately and that the shipper is paying only for the services provided. Additionally, a rail logistics partner can provide shippers with real-time tracking and visibility, enabling them to monitor their shipments and make informed decisions about their logistics strategy.

In conclusion, shippers have the option of using either Through Rates or Rule 11 rates to simplify the payment process when working with multiple carriers in a route. While Through Rates offer simplicity, Rule 11 rates provide transparency and negotiation leverage, resulting in potential cost savings. Working with a rail logistics partner like Solurail Logistics Inc can help shippers navigate the complexities of rail shipping and leverage the benefits of both Through Rates and Rule 11 rates, resulting in optimized supply chain operations and increased cost savings.


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