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Tuesday, February 05, 2013    

STB proposes changes to cost-determination system

The Surface Transportation Board (STB) is proposing several changes to the Uniform Railroad Costing System (URCS), its general purpose cost-determination system.

The board plans to adjust the manner in which the URCS calculates certain system-average unit costs to better reflect railroad operations. The proposed change would automatically reflect economies of scale relative to shipment-size increases, eliminating the need for a separate mathematical adjustment referred to as the "make-whole adjustment," STB officials said in a press release.

The board previously identified the make-whole adjustment as an aspect of URCS that warranted further review in a report issued to Congress in May 2010. The STB also is proposing to make a number of related changes to the URCS that would prompt more accurate movement costs, and to alter two of its reporting requirements to support the proposals.

The URCS enables the STB to calculate a railroad's variable costs to provide service, determine the jurisdictional threshold in rate disputes between railroads and their customers and decide whether challenged rates are reasonable. The system also is used in proceedings involving proposed rail line abandonments.

Comments are due to the STB by March 21 and replies are due by April 22.

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