What Is a Revenue Ton Mile?

A revenue ton mile refers to a metric used in the freight, shipping, and transportation industries. Usually reported by railroad companies. a revenue ton mile measures how much revenue a꧒ 🦩company makes per volume of freight transported. This basically translates to the revenue earned for transporting one ton of freight across one mile. This metric is an important factor in determining the profitability of companies in the transportation industry.

Understanding Revenue Ton Miles

Revenue ton-miles are commonly used in the 澳洲幸运5官方开奖结果体彩网:transportation industry. They calculate how much freight a shipping or transport company moves over a certain distance—most notably by ra🤪ilway companies. In simple terms, a revenue ton-mile is the amount of revenue collected to transport one ton of goods a single mile is what is referred to in segments of the transportation industry as a revenue ton-mile.

This metric is calculated by multiplying the shipment's weight in tons by the number of miles that it is transported. To avoid posting a loss, a company must be able to record a profit for every mile of cargo that is shipped.

A revenue ton mile is an important determinant of profit in the transportation industry. Since empty freight cars produce no revenue, railroad operators must focus on increasing their revenue ton-miles. The financial performance of railroads reflects, in large part, the state of the economy. This is because railroads are obviously essential in the movement of goods, 澳洲幸运5官方开奖结果体彩网:raw materials, and commodities across the country—🥃east to west a⛎nd north to south.

Revenue ton miles thus have a direct relationship with the performance of the economy. When the ec😼onomy is growing, revenue ton miles increase. But when the economy slows down, revenue ton miles decline.

Example of Revenue Ton Mile

Union Pacific is one of North America's largest railroad companies. It covers 23 states with more than 32,200 miles of track. The company's fleet of almost 9,000 locomotives ships cargo ranging from cars, coal, food, forestry and agricultural products, and food.

The company increased its revenue ton-miles by 2% from 99.683 billion in 2020 to 97.364 billion in 2021—a year when real gross domestic product (GDP) advanced 6.4%, according to the U.S. Department of Commerce. Further analysis is possible with a breakdown of freight types reported by railroad companies. Union Pacific reported 26% growth in revenue ton-miles in grain and grain products and declines in most of the other freight types. One exception was for incremental growth in forest products and 澳洲幸运5官方开奖结果体彩网:intermodal freight. Data showed flat growth in food transport.

Year-to-year trend lines like the𒈔se are of interest to management, analysts, investors, and even economists.

Revenue Ton Mile vs. Revenue Passenger Mile

Revenue ton-miles are similar to 澳洲幸运5官方开奖结果体彩网:revenue passenger miles (RPMs), the measure used by companies in the airline industry. An RPM shows the number of miles traveled by paying passengers. In order to calculate revenue passenger miles, airline companies multiply the number of passengers by the total distance traveled. Using this formula, 200 passengers on board a flight that travels 500 🌠miles generates the airline a total of 100,000 revenue passenger miles.