CSX Had 3rd Best OR in 2020 Among Class 1 Railroads

CSX posted an operating ratio of 58.8 percent in 2020 while Norfolk Southern’s OR was 64.4 percent.

Among the seven North American Class 1 railroads, Canadian Pacific had the best OR at 57.1 percent.

It was followed by Union Pacific at 58.5 percent, Kansas City Southern at 60.7 percent, BNSF at 61.6 percent and Canadian National at 61.9 percent.

Operating ratio measures the percent of revenue that is devoted to expenses and is considered a key measure of a company’s efficiency.

The average Class 1 operating ratio was 60.4 percent, which was a decline from 61.9 percent in 2019.

Since 2012 Class 1 operating ratios have fallen by 10.4 percentage points as railroads have pursued aggressive cost cutting strategies.

Also helping the cause has been lower fuel prices, which behind labor usually is the second largest expense for a railroad.

There is some variation in how individual railroads calculate their operating ratio.

Although all of them divide operating expenses by operating revenue some companies also take into consideration such things as real estate sales, which they identify as revenue.

CSX, CP, and NS include in their calculations money gained from selling property. Other railroads only include in their OR calculations revenue earned from railroad operations.

CN includes in its OR calculations revenue from its trucking and Great Lakes bulk shipping operations, which add a collective 2 points to the OR.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: