STB: Five Class I’s revenue adequate in 2013

The Surface Transportation Board announced Tuesday, Sept. 2, 2014, that it has found five U.S. Class I railroad properties to be "revenue adequate for the year 2013, meaning that five of the Class I railroads achieved a rate of return equal to or greater than the Board's calculation of the average cost of capital to the freight rail industry."

The railroads STB cited are: BNSF Railway Co., Grand Trunk Corp. (U.S. affiliates of of Canadian National), Norfolk Southern Combined Railroad Subsidiaries, Soo Line Corp. (U.S. affiliates of Canadian Pacific), and Union Pacific Railroad Co.

“This annual determination of railroad revenue adequacy under 49 U.S.C. § 10704(a)(3) is made in accordance with the standards and procedures developed in Standards for Railroad Revenue Adequacy (Standards I), 364 I.C.C. 803 (1981), Standards for Railroad Revenue Adequacy (Standards II), 3 I.C.C. 2d 261 (1986), and Supplemental Reporting of Consolidated Information for Revenue Adequacy (Supplemental Reporting), 5 I.C.C. 2d 65 (1988),” STB said.

“Pursuant to those procedures, which are essentially mechanical, a railroad is considered revenue adequate under 49 U.S.C. § 10704(a) if it achieves a rate of return on net investment (ROI) equal to at least the current cost of capital for the railroad industry,” STB said in Docket No. EP 552 (Sub-No. 18).

Last year STB found that only two carriers—Norfolk Southern and Union Pacific—qualified as revenue adequate.