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9/16/2024
The Surface Transportation Board (STB) recently determined that three Class Is were "revenue adequate" in 2023.
The designation generally means those railroads achieved a rate of return on net investment equal to at least the current cost of capital for the railroad industry. For 2023, the STB determined that the railroad industry's cost of capital was 9.87%.
By comparing this figure to the 2023 returns on investment, calculated from data reported in the carriers’ Annual Report R-1 Schedule 250 filings, the STB determined a revenue adequacy figure for each of the Class Is that were in operation as of Dec. 31, 2023.
The revenue adequate Class Is in 2023 and their respective rates of return are: BNSF Railway Co., 10.63%; CSX, 14.27%; and Union Pacific Railroad, 15.98%.
Norfolk Southern Railway, Grand Trunk Corp. (including CN's U.S. affiliates) and Soo Line Corp./Kansas City Southern Railway (which includes U.S. affiliates of Canadian Pacific and Kansas City Ltd.) achieved 2023 rates of return of 8.03%, 7.81% and 5.10%, respectively, so they were not deemed revenue adequate. To read the board's decision in its entirety, click here.