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Rail News: Rail Industry Trends

STB mulls options to update rail-cost methodology


The Surface Transportation Board (STB) recently released a report reviewing options for updating its Uniform Rail Costing System (URCS), which is used in rate and other cases. The board issued the report per a request from Congress.

URCS is a methodology that enables the STB to determine a railroad’s variable costs for providing service. The board uses variable costs to determine whether it has jurisdiction in rate disputes between railroads and shippers, and if rates in question are reasonable. URCS also is used in other cases, such as proposed abandonments and trackage rights disputes.

In the report, the STB describes three alternatives ranging from updating outdated computer programs to a complete revamping of the current system that could cost $10 million or more. The board has recommended an option calling for upgrading computer software and modifying the existing system to account for many rail industry changes that have occurred since URCS was adopted in 1989.

Estimated to cost $625,000 over two years, the “suggested improvements would make URCS more reliable and more reflective of today’s railroad industry,” STB officials said in a prepared statement.

Contact Progressive Railroading editorial staff.

More News from 5/28/2010