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Rail News: Rail Industry Trends
STB reveals 'revenue adequate' Class Is for 2016
The Surface Transportation Board (STB) announced yesterday that the Class Is that achieved "revenue adequacy" for 2016 were BNSF Railway Co., Norfolk Southern's combined railroad subsidiaries, Canadian Pacific's Soo Line Corp. and Union Pacific Railroad.
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 for 2016, which the board determined to be 8.88 percent, according to an STB press release.
The STB determined that those four Class Is 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.
Soo Line is part of CP's U.S. operations.
Congress requires the STB to conduct revenue adequacy determinations on an annual basis.
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