A compensation system under which a railroad pays a daily or mileage-based fee to the car owner when using foreign-owned or privately owned equipment. Car hire rates are established under AAR rules and are intended to recover the owner's fixed and variable car costs. The system balances car supply across the national rail network.
A daily charge paid by one railroad to another, or to a private car owner, for the use of freight equipment beyond a specified time. Per diem is a subset of car hire charges and is calculated on a calendar-day basis. High per diem rates incentivize railroads to return foreign cars promptly.
A railcar that is operating on a railroad other than the one that owns it. Foreign cars generate car hire obligations from the operating railroad to the owning railroad. Railroads track foreign car counts carefully to manage their hire obligations and fleet balance.
A railcar owned by a shipper, leasing company, or third party rather than by a railroad. Private cars are used by the owner to transport their own goods or are leased to shippers for dedicated use. The owning railroad receives car hire when private cars travel on foreign lines.
A railcar owned by the railroad on whose tracks it currently operates. System cars are available for general loading and are managed as part of the railroad's own fleet. When system cars travel on another railroad, they become foreign cars and earn car hire for the owning road.
The transfer of freight cars and the accompanying waybills between two connecting railroads at a junction point. Interchange rules, governed by AAR circulars, define responsibilities for car condition, billing, and liability. It is the mechanism that enables single-bill, multi-railroad shipments across the North American network.