Company Info

Railroad Contractors Hit By Rising Fuel Costs

The surge in fuel costs has hit the railroad contract companies where it hurts – the wallet. Contract companies are locked in “boilerplate” contracts by the railroads with terms that only benefit the railroad companies. The rise in fuel costs this has greatly impacted the independent contractors. Independent contractors are paid only for the days they work and they are required to pay for their own expenses. The contractors are paid between $250 to $400 per day and they are only paid for the days they actually work. If a contractor is required to fly to a remote location and work only 5 day per week, then the railroad doesn’t have to pay them for their layover days. A contractor could live on these wages before the fuel crisis, but now even $400 per day isn’t enough to pay for airfare, hotels, rental cars, and meals.

The railroad companies have something that no one else in the country has…A Fuel Surcharge. They are allowed to manipulate any contract with their customers in order to recover 100% of their fuel costs. But what about the independent contractors? Since the railroads write the contracts, the independent contractors are at the mercy of the railroads. After interviewing several independent contractors who are contracted with the Union Pacific Railroad, it appears that there are several disgruntled contractors who are looking for new careers. Even though $400 per day sounds like a lot of money, think of how much is being spent for expenses. Personally, I think that you would have to be stupid to be an independent contractor for a railroad. Only the independent contract companies are benefiting from the hard work of the contractors.