A confidential rate negotiated between a railroad and a shipper under a transportation contract authorized by the Staggers Rail Act. Contract rates are not publicly filed and may include volume commitments, service guarantees, and other terms. They are the primary pricing mechanism for large shippers and most intermodal traffic.
A rate filed in a railroad's public tariff and available to any qualifying shipper without negotiation. Published rates are less common than contract rates for large shippers but remain the default for smaller shippers and exempt traffic. They provide price transparency but less flexibility than contracts.
A rate applicable to a specific commodity or group of commodities between defined origin and destination points, typically lower than the general freight rate. Commodity rates reflect the volume, regularity, and competitive characteristics of the traffic. They are published in commodity tariffs or established in contracts.
A publicly filed schedule of rates, rules, and regulations applicable to railroad transportation services. Tariffs are filed with and accessible through the STB and must be applied consistently to all shippers who qualify. Under the Staggers Act, railroads may supplement tariff rates with confidential contracts.
Landmark 1980 U.S. legislation that substantially deregulated the freight railroad industry, allowing railroads to negotiate confidential contract rates, abandon unprofitable lines, and set market-based prices. The Staggers Act is credited with revitalizing a financially troubled industry by giving railroads pricing flexibility. It preserved regulatory oversight for captive shippers through revenue adequacy and rate reasonableness standards.
The process by which a shipper and railroad negotiate the terms of a transportation contract, including rates, volume commitments, service standards, and car supply provisions. Effective negotiation requires understanding market alternatives, the railroad's cost structure, and the shipper's volume and service needs. The Staggers Act enables these confidential bilateral agreements.