Rail cars operate across the rail network because of established agreements to cover items such as compensation (per diem), usage (car service agreements) and mechanical condition. The Association of American Railroads [AAR] is the rail industries’ self-governing organization establishes and maintains these agreements.
One critical area is the ability to make necessary repairs to minimize delays to other owner’s railcars without prior authorization. The AAR Field Manual of Interchange along with the Office Manual. Cover standard items of repair. These rules address when something can be repaired (Cause for Attention), what are acceptable repairs (Correct Repairs) and other information including how to code it and pricing under a system of standard “Job Codes”
Just like an app for your iPhone, there is a Job Code for virtually every type of repair that can be made on a rail car.
For each job code, there is at least one, if not several prices, depending on a variety of factors including new or used components, associated repairs, scrap credit, etc…
Time standards are established for job codes and are carefully developed and routinely updated. The material charges are continuously monitored and updated periodically based on input from several sources including railroads, private shops and suppliers.
As with any price standard, either labor or material, there can be significant differences between what can be charged and actual costs. Railroads are required to utilize the established pricing as published the AAR Office Manual. Outside shops do not have the requirement to use either the AAR time standard or material costs, although it is a good point of reference.