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7/11/2025
The Surface Transportation Board yesterday announced it has discontinued proceedings involving years-old proposals related to the agency's railroad revenue adequacy procedures.
The board discontinued the proceedings as part of prioritizing "other mission-critical matters," according to an STB press release.
Annually, the STB determines which Class Is are revenue adequate by comparing a carrier’s return on net investment (ROI) with the rail industry’s after-tax cost of capital for a given year. If a carrier’s ROI exceeds the cost of capital, the carrier is considered to have been revenue adequate for that year.
In September 2020, Union Pacific Railroad, Norfolk Southern Railway and the U.S. rail affiliates of CN filed a joint petition seeking modifications to the revenue adequacy procedures, including benchmarking railroad ROI and cost of capital to companies in the S&P 500. The board invited comments on the joint proposal and related issues through August 2021, but did not propose changes or new regulations to the procedures.
Meanwhile, before the railroads' September 2020 petition, the board began an information-gathering procedure on revenue adequacy, held public hearings in 2015 and 2019 and received written comments through February 2020.
In its decision announced yesterday, the board discontinued that case as well.
“[Yesterday's] decision closing these regulatory proceedings reflects the agency’s intensive focus on its mission and allocating resources to their highest and best use,” said STB Chairman Patrick Fuchs. “I look forward to continued engagement with shippers, railroads and the broader public on reforms to advance a competitive, efficient and sound rail network.”
The board's decision can be downloaded here.