Posts Tagged ‘STB revenue adequate figures’

STB Finds 5 Class 1s were Revenue Adequate in 2020

September 10, 2021

The U.S. Surface Transportation Board has determined that five Class 1 railroads had adequate revenue during 2020.

The carriers were BNSF, CSX, Kansas City Southern, Soo Line (Canadian Pacific) and Union Pacific.

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.

During 2020 the STB determined that to be 7.89 percent.

The five carriers cited by regulators achieved a rate of return on net investment equal to or greater than the agency’s calculation of the cost of capital for the railroad industry.

STB Finds 5 Class 1s Revenue Adequate

October 5, 2020

Five Class 1 railroads operating in the United States were revenue adequate in 2019 the U.S. Surface Transportation Board has determined.

The railroads included Norfolk Southern, CSX, BNSF, Canadian Pacific’s Soo Line Corporation and Union Pacific.

To be deemed revenue adequate a railroad must achieve a rate of return on net investment equal to at least the current cost of capital for the railroad industry in a given year.

The STB said that in 2019 the rate of return figure was 9.34 percent. It said all five Class 1 railroads it identified exceeded the agency’s calculation of the industry’s cost of capital.

In another development, the STB said it is seeking public comment on a proposed approach developed by its Office of Economics for use in considering class exemption and revocation issues.

The proposed approach would be used to help the STB evaluate market conditions using a variety of metrics related to rail competition.

In a news release, the agency said the proposal would serve as a way to evaluate market conditions governing a commodity, including changes in conditions over time.

 However, the STB said it would not serve as a mechanical test for determining whether the commodity exemptions at issue should be revoked or whether a new exemption should be issued.

Public comment is due by Dec. 4 and replies to initial comments are due by Jan. 4, 2021.

STB Says CSX was Revenue Adequate in 2018

September 10, 2019

Three Class 1 railroads, including CSX, have been found by the U.S. Surface Transportation Board to have been revenue adequate in 2018.

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.

In 2018 the STB determined that to be 12.22 percent.

Also found to have been revenue adequate last year were Canadian Pacific’s Soo Line Corporation and Union Pacific.

The STB said CSX, UP and Soo Line achieved a rate of return on net investment equal to or greater than the agency’s calculation of the railroad industry’s cost of capital.

STB Says CSX, NS Not Revenue Adquate

September 10, 2016

Neither CSX nor Norfolk Southern made the list of revenue adequate railroads for 2015.

STBThe U.S. Surface Transportation Board said this week that four of the seven Class I railroads in the United States had adequate revenue last year.

The STB said that based on its determination of a 9.61 percent cost of capital, it found that BNSF, Grand Trunk Corporation. (Canadian Nation), Soo Line Corp. (Canadian Pacific), and Union Pacific were revenue-adequate for 2015.

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 said was 9.61 percent.

In an unrelated announcement, the STB also said that it now has a new website address.

The agency’s website address is now www.stb.gov rather than www.stb.dot.gov.

The STB said the change reflects its status as a wholly independent federal agency, as a result of the STB Reauthorization Act of 2015.

Previously, the STB had been administratively affiliated with the U.S. Department of Transportation.

4 Class 1 Railroads Revenue Adequate in 2014

September 10, 2015

Four Class I Railroad were deemed to have been “revenue adequate” in 2014 the Surface Transportation Board has determined.

The revenue adequate companies were BNSF, Norfolk Southern, Union Pacific and Grand Trunk (which included the U.S. affiliates of Canadian National).

That means that those railroads achieved a rate of return on net investment equal to or greater than the STB’s calculation of the freight-rail industry’s average cost of capital.

The STB said that the rail industry’s 2014 cost of capital was 10.65 percent.

The STB said the revenue adequate rate of return for the four revenue-adequate Class Is in 2014 were UP, 17.35 percent; BNSF, 12.88 percent; NS, 11.69 percent; and Grand Trunk, 11.3 percent.

The three non-revenue-adequate Class Is and their rates of return were CSX, 10.18 percent; Kansas City Southern, 8.18 percent and Soo Line (including Canadian Pacific’s U.S. affiliates), minus-0.42 percent.

The Soo Line’s negative rate of return was calculated using values submitted by the Class I and in part was impacted by a one-time loss associated with the 2014 sale of the Dakota, Minnesota & Eastern Railroad Corp.’s lines west of Tracy, Minnesota.