Revenue Ton Mile
What Is a Revenue Ton Mile?
A revenue ton mile alludes to a metric utilized in the freight, delivery, and transportation industries. Generally reported by railroad companies. a revenue ton mile measures how much revenue a company makes for every volume of freight moved. This essentially means the revenue earned for moving one ton of freight across one mile. This measurement is an important factor in deciding the profitability of companies in the transportation industries.
Grasping Revenue Ton Miles
Revenue ton miles are normally utilized in the transportation industry. They work out how much freight a delivery or transport company moves over a certain distance — most eminently by railroad companies. In simple terms, a revenue ton mile is the amount of revenue collected to move one ton of goods a single mile is alluded to in portions of the transportation industry as a revenue ton mile.
This measurement is calculated by duplicating the shipment's weight in tons by the number of miles that it is moved. To try not to post a loss, a company must have the option to record a profit for each mile on cargo that is sent.
A revenue ton mile is an important determinant of profit in the transportation industry. Since void freight cars produce no revenue, railroad administrators must zero in on expanding their revenue ton miles. The financial performance of rail lines reflects, in large parts, the state of the economy. This is on the grounds that rail lines are clearly essential in the movement of goods, raw materials, and commodities across the nation — east to west and north to south.
Void freight cars produce no revenue, so railroad companies must increase their revenue ton miles.
Revenue ton miles subsequently have a direct relationship with the performance of the economy. At the point when the economy is developing, revenue ton miles increase. Yet, when the economy dials back, revenue ton miles decline.
Illustration of Revenue Ton Mile
Union Pacific is one of North America's largest railroad companies. It covers 23 states with in excess of 32,200 miles of track. The company's fleet of right around 9,000 trains ships cargo going from cars, coal, food, forestry and agricultural products, and food.
The company increased its revenue ton miles by 2% from 99.683 billion out of 2020 to 97.364 billion out of 2021 — a year when real gross domestic product (GDP) advanced 6.4%, as indicated by the U.S. Department of Commerce. Further analysis is conceivable with a breakdown of freight type reported by railroad companies. Union Pacific reported 26% growth in revenue ton miles in endlessly grain products, and declines in the majority of the other freight types aside from incremental growth in forest products and intermodal, and flat growth in food, .
Year-to-year trend lines like these are of interest to management, analysts, investors, and even financial experts.
Revenue Ton Mile versus Revenue Passenger Mile
Revenue ton miles are like revenue passenger miles (RPMs), the measure involved by companies in the airline industry. A RPM shows the number of miles went by paying passengers. To work out revenue passenger miles, airline companies duplicate the number of passengers by the total distance voyaged. Utilizing this formula, 200 passengers on board a flight that movements 500 miles creates the airline a total of 100,000 revenue passenger miles.
Features
- One revenue ton mile is the revenue earned for moving one ton of freight across one mile.
- Revenue ton miles are utilized fundamentally by railroad companies.
- A revenue ton mile is a measurement utilized in the transportation industry.
- Revenue ton miles are directly connected with the economy — revenue ton miles increase when the economy develops, and decline during a slowdown.
