The Surface Transportation Board has published the annual inflation-adjusted index and deflator factors for 2022.
Railroads use the deflator factors to adjust their gross annual operating revenues for classification purposes. This methodology ensures that railroads are classified based on real business expansion and not on the effects of inflation, and it determines how much individual railroads must comply with the STB’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.
The STB’s predecessor, the Interstate Commerce Commission, raised the revenue classification level for Class I railroads from $50 million in 1978 dollars to $250 million in 1991 dollars, effective for the reporting year starting January 1, 1992. The Class II threshold was also raised from $10 million (1978 dollars) to $20 million (1991 dollars).
The decision was in response to a joint petition Montana Rail Link and the Wisconsin Central filed.
In a 2021 Montana Rail Link petition, the revenue classification level for Class I railroads was raised from $250 million in 1991 dollars to $900 million in 2019 dollars.
The Class II threshold was converted and rounded from $20 million in 1991 dollars to $40.4 million in 2019 dollars, effective for the reporting year beginning January 1, 2020.
The 2019 values reflect those in Indexing the Annual Operating Revenues of Railroads, EP 748 (STB served June 10, 2020).
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.
