How much does a railcar tracking software system cost (Part II)?

In February of last year, I wrote the first part of this series that focused on the cost of data, which is the core cost of any railcar tracking system. I promised that the first part would be followed up with more information about the total cost of this type of system. It has been a very busy year and I apologize for not following it up until now. So here goes…

To recap, in Part 1 we discussed the cost of Waybills (aka EDI 417, shipping instructions) and CLM (aka car location messages, sightings) data. The cost for CLM will range from $0.01 to $0.04 per record. The service that provides CLM at $0.06 per record that was mentioned in the prior article, should not be and rarely is used as a data source for a full featured tracking system. So for this article, I am going to revise the upper end to $0.04 and between $0.08 t0 $0.25 per waybill. A railcar can generate anywhere from 30 to 200 CLM and 1 to 4 waybills per month depending on how and where the traffic moves.


Monthly Per Railcar – Data Fees (assumes and average of 2 waybills and 140 CLM)

Record Type













Remember that some vendors may be able to provide a limited number of CLM records per railcar per day (1 to 3) thus lowering the data cost. However, this can also limit the benefits that you get from the system. It will lower the accuracy of transit and loading/unloading time measurements.

Software & Support

Railcar tracking software systems are difficult to write because there are many business rules that must be implemented. These business rules are known by relatively few people. Railroad data is not perfect, so it takes an
experienced person to know all of the possible exceptions in the data and how to handle them. Plus, the market for these systems is relatively small. These systems are going to be expensive. Along with the software, there must be staff available to support it. Whether the software is hosted and provided as Software as a Service (SaaS) or is installed on customer servers, both require people to handle issues with day to day usage and maintenance of the application.

Estimate: $1.00 to $2.00 per railcar per month

Data Quality

A certain amount of data will be missing or erroneous. Missing data due to system failures or glitches, erroneous data as a result of human error and more. Based on experience, 1 hour per 500 railcars per day should be enough time. Some vendors provide this service and some do not. Check with them to see if it is included or if there is an extra charge. If the service is included, check to see if you can pull it out to get a discount – if you already have people who can do this work, no sense in paying extra for it. If you are on a budget, eliminating this service can be one way to get a system in the door at a lower cost. The amount of data clean up can vary significantly by customer, so you could use the system for a while and see just how much is needed. Finally, no one knows how your traffic moves as well as you and there are arguments to not outsource data quality.

Estimate: $0.60 to $1.20 per railcar per month.

Other Considerations

– Are there per shipment charges or only per railcar / month charges?
– Are data fees charged separately from the system fee or included?
– Any set up fees?
– Is training included or charged separately?
– What features are included and which are and add-on with extra fees?
– Extra fees for additional user accounts? How many are included initially?


You may have more questions than before reading this article. That is a good thing. You should be asking a lot of questions for an investment like this. Basically you should be prepared to pay between $2.56 and $8.10 per railcar per month. If you have more questions, please feel free to comment your question on this article and I will reply quickly. Happy hunting!

All the best,


P.S. Your next question is probably, “How much money can a railcar tracking system save my company?” The answer to this question will help you justify the high expense and that is the topic of my next article, so stay tuned!

Jim Dalrymple


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