Freight Revenue per Thousand Ton Miles

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Freight Revenue per Thousand Ton Miles is calculated by dividing total freight revenue by Revenue Ton Miles and then multiplying by 1,000

This metric is used in the Railroad Industry to judge the revenue the railroad company gets in proportion to the distance and tonnage it transports. This metric is important since it provides a comparable system for comparing average revenue on single scale. The thousand ton miles aspect of the metric allow for railroad companies to be compared on a similar basis. A ton mile is the product of the total number of miles a good is transported multiplied by its weight in tons. This equalizes companies which specialize in high weight but low distance trips with low weight but high distance trips.

Example

  • For example, if the railroad company CSX (CSX) were to have a total freight revenue of $500M and have shipped goods a total of 100M miles with a total weight of 500 tons, its freight revenue per thousand ton miles would be 10. This is calculated as ((500M) / (100M x 500) ) x 1000) which equals (( 1 / 100) x 1000) which then equals 10.
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