STB reveals four Class Is were ‘revenue adequate’ in 2017

The Surface Transportation Board (STB) announced last week that the Class Is that achieved “revenue adequacy” for 2017 were BNSF Railway Co., Norfolk Southern Corp.‘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 in 2017, which the board determined to be 10.04 percent.

The 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, according to an STB press release.

Congress directed the STB to conduct revenue adequacy determinations on an annual basis.