Friday, September 09, 2016

STB: Four Class I's revenue-adequate in 2015

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The Surface Transportation Board (STB) on Sept. 8, 2016 announced its annual determination of revenue adequacy for U.S. Class I freight railroads for 2015. Of the "Big Seven" (five U.S. carriers and two U.S. subsidiaries of Canadian roads), four made the cut.

Based on its determination of a 9.61% cost of capital, the Board found that BNSF Railway Co., Grand Trunk Corp. (CN), Soo Line Corp. (CP), and Union Pacific Railroad Co. were revenue-adequate for 2015.

CSX, Kansas City Southern and Norfolk Southern did not make the list..

A railroad is considered to be revenue-adequate if it achieves a rate of return on net investment equal to at least the current cost of capital for the railroad industry, which for 2015 the Board determined to be 9.61%. Congress directed the Board to conduct such revenue adequacy determinations on an annual basis.

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