2022-13845. Indexing the Annual Operating Revenues of Railroads

The Surface Transportation Board (the Board) is publishing the annual inflation-adjusted index and deflator factors for 2021. The deflator factors are used by the railroads to adjust their gross annual operating revenues for classification purposes. This indexing methodology ensures that railroads are classified based on real business expansion and not on the effects of inflation. Classification is important because it determines the extent to which individual railroads must comply with the Board's reporting requirements.

The Board's deflator factors are based on the annual average Railroad Freight Price Index developed by the Bureau of Labor Statistics. The Board's deflator factor is used to deflate revenues for comparison with established revenue thresholds.

Railroad Revenue Thresholds ¹

Year	Factor	Class I	Class II
2017	0.5390	463,860,933	37,108,875
2018	0.5103	489,935,956	39,194,876
2019 2	0.4952	504,803,294	40,384,263
2020 3	1.0000	900,000,000	40,400,000
2021	0.9535	943,898,958	42,370,575

Dates: The inflation-adjusted indexes and deflator factors are effective January 1, 2021.

For Further Information Contact: Pedro Ramirez at [phone]. Assistance for the hearing impaired is available through the Federal Relay Service at [phone]. Board decisions and notices are available at www.stb.gov.

Decided: June 23, 2022.

By the Board, Francis O'Connor, Acting Director, Office of Economics.

Kenyatta Clay,

Clearance Clerk.

Footnotes

1.  In Montana Rail Link, Inc., & Wisconsin Central Ltd., Joint Petition for Rulemaking with Respect to 49 CFR part 1201, 8 I.C.C.2d 625 (1992), the Board's predecessor, the Interstate Commerce Commission, raised the revenue classification level for Class I railroads from $50 million (1978 dollars) to $250 million (1991 dollars), effective for the reporting year beginning January 1, 1992. The Class II threshold was also raised from $10 million (1978 dollars) to $20 million (1991 dollars). In Montana Rail Link, Inc.—Petition for Rulemaking—Classification of Carriers, EP 763 (STB served Apr. 5, 2021), the revenue classification level for Class I railroads was raised from $250 million (1991 dollars) to $900 million (2019 dollars), and the Class II threshold was converted and rounded from $20 million (1991 dollars) to $40.4 million (2019 dollars), effective for the reporting year beginning January 1, 2020.

2.  The 2019 values reflect those in Indexing the Annual Operating Revenues of Railroads, EP 748 (STB served June 10, 2020).

3.  The 2020 and subsequent values are based on the thresholds established in Docket No. EP 763, and the deflator factor is referenced to the new base year of 2019. As the Railroad Freight Price Index remained the same from 2019 to 2020, the annual deflator factor for 2020 was 1.0000.