CN Iowa Line - Trains Magazine

MP173

This will be fun.

I don't know how much "fun" this will be.  It looks like the work I did in days gone by - for pay.

I was trying to show the gross revenue per train mile at various levels of eastbound and westbound loadings.  It assumes $1.00/container mile eastbound and $0.75/container mile westbound.

This whole thing will be, at best, one big SWAG.  Determining the costs of specific rail movements remains very imprecise.  Since we do not have access to real data, we're going to have to make many assumptions that may or may not be valid.

Such as:  the cost of an IM terminal at Cedar Rapids.  In the real world I could get a projection.  Here, the best we can do is an assumption.  If we guess $2,000,000 (Let's be cheap with this terminal.  It's only designed for an average of 40 loads per day.), a 25 year life, and a 18% interest rate, I get an annual ownership costs of $364,183.19. In Excel it's: 12 x (=PMT((0.18/12),(25*12),2000000).

I don't like using guesstimates.  Are you sure you want to "have fun" with this?

Anyway, if we make another assumption of a six day/week operation, while allowing for holidays, and 40 loads per 300 workdays, we get 12,000 loads per year.  Dividing the $364,183.19 annual ownership cost of the terminal by the 12,000 annual loads we get a Cedar Rapids terminal ownership cost of $30.35 per load.  That figue will go down if we can put more annual loads through the terminal, particularly westbound loads. 

This is one big SWAG guesstimate.  Anyone, please feel free to point out errors on my part.  I'm kind of rusty at this. 

Shall we continue?