Glossary
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Glossary 

Affreightment A Contract of Affreightment is an agreement between a ship owner and a 

shipper to carry cargo at a set rate, within a set time period, without the 

ship owner obligating a specific vessel. 

Aggregate 

capacity 

The optimum traffic a road or rail line can bear without overcrowding. 

Average cost The average total cost of providing transportation services per unit of 

freight. 

Average revenue 

per ton-mile 

Average freight revenue for hauling 1 ton 1 mile. 

Backhaul Cargo carried after the previous load was discharged, to earn revenue to 

cover costs of repositioning trucks, containers, barges, and vessels. 

Backhaul cargo is often defined by ocean container carriers as the portion of 

a round trip that brings the least revenue. 

Basis The difference between the current cash price of a commodity and its 

futures price. The basis accounts for the difference in the supply and 

demand relationships in the local market relative to the futures market. 

Biofuel A fuel made from biological matter, such as ethanol or biodiesel. Different 

than fossil fuels, such as gasoline and diesel. 

Bio-refinery A plant that makes fuel out of agricultural products. Ethanol plants distill 

ethanol from corn, and biodiesel plants make biodiesel fuel from soybean 

oil. 

Bottleneck 

segment 

A segment of a rail route controlled by a single railroad, in situations where 

two railroads compete for the rest of the route. 

Bottleneck rates Abnormally high rates charged for bottleneck segments, designed to force 

the entire haul to the controlling railroad’s line and eliminate competition 

on that route. 

Break-bulk Heterogeneous cargo in various forms: pallets, barrels, bags, etc. All cargo 

that is not in bulk or containers. 

Bulk cargo Cargo not shipped in packages or containers, but shipped loose in the hold 

of a ship. Grain, coal, and sulfur are usually bulk cargo. 

Brewer’s rice Broken grains of rice, a by-product of rice milling. Primarily sold as a pet or 

dairy feed ingredient. 

Capesize vessel A cargo vessel with a capacity of 110,000–200,000 dwt. 
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Captive shippers Rail customers who have no practical shipping alternatives to a single 

railroad 

Carload 

shipments 

Rail shipments less than 27 railcars. 

Cattle operations Cattle feeding, slaughtering, and packing operations, generally near sources 

of grain in the Midwest. Also called feed lots. Cattle are raised in cow-calf 

operations to be finished in cattle operations. 

Chassis 

(shipping) 

A wheeled frame to which a shipping container can be locked for storage or 

movement. (Plural chassis) 

Class I railroads The largest railroads, those having annual revenues in 2008 of $359.6 

million (adjusted annually for inflation) or more. Class II and III are smaller. 

Seven United States and Canadian Class I railroads operate in the United 

States. 

Common carrier 

obligation 

In public law, and in the ICCTA, railroads and other modes of transportation 

have an obligation to serve the public at reasonable rates and without 

discrimination. They cannot refuse to carry some goods or refuse service to 

some members of the public. 

Common cost A cost that cannot be directly assigned to particular segments of the 

business but is incurred for the business as a whole. 

Container 

(shipping) 

A steel box, 8 feet wide by either 8 feet 6 inches or 9 feet 6 inches high, and 

either 20, 40, or 45 feet long, used for transporting dry or refrigerated 

goods. Shipping containers can be carried by—and transferred between—

trucks, railcars, barges, and ships. 

Cooperative An organization of farmers formed to buy supplies or market products 

collectively. An agricultural company owned by its farmer members. 

Cost-of-service 

pricing 

Pricing based upon the average total cost per unit of providing the 

transportation service. 

Cow-calf 

operations 

Cattle-raising operations that produce calves to be finished in feed lots 

Demurrage The charge levied when a shipment is not loaded or unloaded within the 

allowed time. 

Differential 

pricing 

Pricing system in which rates vary with customer, volume, location, etc., 

often also referred to as differential pricing. 

Directional 

running 

An agreement between railroads with parallel rail lines, allowing shared use 

of one line in each direction. 
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Distiller grains A by-product of making ethanol from corn. Sold for animal feed, they 

enhance the profitability of ethanol plants. 

Ethanol A renewable fuel produced from agricultural feedstocks such as corn and 

other grains in the United States and sugar cane in Brazil. 

Fallowing The practice of allowing a field to remain unplanted for one or more seasons 

to regain nutrients. 

Feed Food for livestock. 

Feeder ship A relatively small container ship, usually with a capacity less than 1,000 TEU, 

that moves containers between regional ports to gain access to a larger port 

or to serve a smaller port region. 

Feedgrains Grains used for animal feed, also known as coarse grains. 

Feedstocks Raw material for industry. For example, corn is the major feedstock for 

ethanol production in the United States. 

Fixed costs Costs of running an operation that do not depend on volume of business, as 

opposed to variable costs, which vary with the volume of business done. 

Gateway A major rail interchange point. 

GDP price 

deflator 

An economic measure used to account for inflation. The ratio of the sum of 

a country’s output for a given year at current prices (nominal GDP) divided 

by the GDP in a selected base year. The GDP deflator shows how much a 

change in the nominal GDP relies upon changes in prices. Also known as the 

"GDP implicit price deflator." 

Grain elevator A warehouse facility that uses vertical conveyors to elevate grain, where 

grain is stored before being marketed. Grain is moved from elevators into 

trucks, rail cars, barges, or ships by gravity flow. Elevators are usually 

owned privately or by an agricultural cooperative. The term “elevator” 

often is used to refer to any grain storage facility, even if the grain is not 

elevated. 

• County elevators are where farmers deliver grain. 

• Terminal elevators are major transshipment facilities. 

• Export elevators are at port facilities. 

Handymax vessel A cargo vessel with a capacity of 40,000–60,000 dwt. 

Handysize vessel A bulk cargo vessel with a capacity of 10,000–40,000 dwt, or a container 

vessel with a capacity of 1,000–1,999 TEUs. 

Headhaul Cargo that provides enough revenue to pay for the initial transportation to 

the buyer and the return transportation of the empty container. In contrast, 

backhaul cargo is unable to pay for both legs of the transportation. 
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Horticultural 

crops 

In this report, used to refer to fruit, vegetable, and nut crops 

Inelastic demand Transportation demand is relatively unresponsive to changes in price. 

Inland 

waterways 

All waterways within the contiguous 48 States and Alaska. 

Intermediate 

vessel 

Container ship with a capacity of 2,000–2,999 TEUs. 

Intermodal Shipping freight in containers, which may be moved from one mode of 

transport to another. 

Joint-line rate A tariff rate over a route involving two or more rail carriers. 

Landed cost The total cost of goods to a buyer, including the cost of transportation 

Line-haul 

railroads 

Railroads that offer point-to-point service. Local line haul railroads have less 

than 350 miles of track. 

Liner vessels Container ships that provide service with fixed schedules and routes. 

Lock and dam A mechanism for moving vessels past obstructions or fast water in a river or 

canal. It consists of a dam, which controls the flow of water, and one or 

more locks to raise or lower vessels past the obstruction. 

Lock chamber A section of a canal that can be closed to control the water level, raising or 

lowering vessels. 

Maintenance of 

way 

Maintenance of railroad rights-of-way. (Often abbreviated as M of Way, 

MOW, or MW) 

Marginal cost The cost to produce one additional unit of output. 

Market power The extent to which a firm can dictate prices and terms of service. 

Merger premium The price of an acquisition in excess of its net book value 

Milled rice Rice from which the husk and bran has been removed. Also called white 

rice. 

Mode, modal A form of transportation, including truck, rail, barge, or ocean vessel. 

Multimodal Using multiple modes of transportation. 

Newbuilding Vessels newly built or under construction, 

Nominal GDP Gross Domestic Product not adjusted for inflation. Expressed as an amount 

in current dollars, i.e. 2008 nominal GDP was $10 trillion. 

Oilseed Seeds or legumes from which oil is pressed, such as soybean, canola, and 

cottonseed 
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Orderbook Scheduled delivery of newly built vessels. 

Packet Early river barge. 

Panamax vessel A cargo vessel with a capacity of 60,000–80,000 dwt, or a container ship 

with a capacity of 3,000–4,999 TEUs. 

Paper barrier A restriction on a railroad that buys or leases lines from another railroad. 

The selling or leasing contract restricts the rights of the buying railroad to 

interchange traffic with other than the selling railroad. Also called an 

interchange commitment. 

Post-Panamax 

vessel 

A cargo vessel with a capacity of 80,000—110,000 dwt, or a container ship 

with a capacity of 5,000–7,999 TEUs. These vessels are too large to fit 

through the Panama Canal at its current width and depth. 

Price maker Sellers in non-competitive markets who have the market power to set prices 

because there is little competition. 

Price taker A buyer in highly competitive markets that has no market power to 

influence prices, so must accept what the market offers. 

Also, a seller in a highly competitive market that can increase or decrease its 

production or services offered without a significant impact on the market. 

Pulse crops Leguminous vegetables: beans, peas, chick peas, black-eyed peas, and 

lentils. 

Rail-to-trails Abandoned rail lines converted by STB to biking and hiking trails for public 

use. 

Rationalization 

(railroads) 

Making railroads more profitable by abandoning unprofitable (less-used) 

lines. 

Reciprocal 

switching 

agreement 

A railroad gives shippers access to a second rail carrier in return for the 

second rail carrier giving the first railroad access to some of its shippers. 

Real GDP Gross Domestic Product adjusted for inflation. Expressed as an amount of 

GDP in the dollars of a base year, i.e. 2000 Real GDP was $6.5 trillion in 2008 

Dollars. 

Regional 

railroads 

Railroads with more than 350 miles of track, but which are too small to be 

classified as Class I. 

Roll on-Roll off A type of ship designed for wheeled cargo that is driven on at the origin and 

off at the destination. Also referred to as RO-RO. 
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Rough rice Unprocessed rice. The grains are covered with a tough husk. Rice is not 

eaten in this form, but requires further milling to remove the husk. Also 

called paddy rice. Brown rice has had the husk removed, but retains the 

bran. White rice has had the bran removed. 

Semi-trailer A trailer without a front axle; the weight of the front is supported by the 

tractor that pulls it. The combination of tractor and semi-trailer is 

colloquially called a “semi.” It is the largest and most common type of truck 

transporting cargo on the highway. 

Shuttle train A dedicated train, usually of 75 or 100 cars, that shuttles between a single 

origin and a single destination. 

Soybean crush Soybeans destined for milling into oil and meal. 

Soymeal Also called soybean meal, a byproduct of soybean oil extraction. A highprotein ingredient for animal feeds. 

Stand-Alone Cost A method used to estimate the fair cost of running a railroad in rate 

disputes 

Switching rates Rates charged by a railroad to move its cars to another railroad’s line. 

Tariff (ocean 

shipping) 

A document published by the carrier setting forth rules, rates, and charges 

for the movement of goods. 

Tariff (barges) Barge rates are expressed as a percent of tariff. Tariff rates were originally 

set by the Bulk Grain and Grain Products Freight Tariff No. 7 in 1976. 

Although that tariff is no longer applicable, the industry uses it as a 

benchmark to describe rates. 

Tariff rates 

(railroads) 

Non-contracted standard shipping rates, as opposed to contracted rates, 

which are individually negotiated. 

Through route A route that, from origin to destination, involves more than one rail carrier. 

Ton-mile A ton of freight transported one mile. A measure of quantities plus the 

distance they are carried. 

Tornqvist index An economic index that measures the change in prices in categories and 

assigns a percentage weight to each category based on its share of total 

revenues. The total index is essentially the weighted average of price 

changes within the various categories. 

Tow boat Self-propelled river vessel that moves barges. Often referred to as a 

pushboat. Tow boats are generally designed for shallow water operations 

and push groups of barges (see tow of barges). 
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Tow of barges A group of barges tied together. From 15 to 40 barges are tied together for 

transport by a single tow boat. A barge can carry 1,500-1,800 tons of grain; 

a tow can transport as much as 72,000 tons. 

Tramp vessels Ships that are contracted by shippers as needed, rather than running on a 

regular schedule. 

Transload To move cargo from one method of transportation to another, such as from 

a railcar into a container or trailer. A transload facility is a transfer point 

with equipment for making such a transfer. 

Treble damages The ability of a court to triple the amount of damages, often used in 

antitrust cases as a penalty if the action was found to be willful. 

Unit trains Trains in which all cars (more than 50 cars) are shipped from the same origin 

to the same destination, without being split up en route. 

Variable costs Costs of running an operation that vary with the volume of business done. 

As opposed to fixed costs, which do not depend on volume. 

 
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