Several shipper groups are expressing concerns about the U.S. Surface Transportation Board’s proposal to modify the Uniform Rail Costing System (URCS).
The URCS is the STB's general purpose costing system that is used to estimate variable and total unit costs for Class I railroads. It's used for several purposes, including determinations on whether a railroad’s rates are reasonable.
The National Industrial Transportation, together with the American Chemistry Council, Chlorine Institute, and Fertilizer Institute, said STB’s desire to make its formula and procedures simpler and more transparent is understandable, but its proposal for achieving that goal is misguided.
In a filing with STB
, they noted "Railroad operations are complex and heterogeneous. Whatever costing methodology is used must be calibrated to recognize these truths.
"The observation of steps in variable costs attributed to movements in different traffic groups does not, by itself, indicate a problem with the costing model," the groups explained. "The board’s proposed changes may well result in less accurate results for many shipments, and it would be reckless to implement them in the absence of any proof that they actually achieve the board’s desired result.
"Adjustments may well be warranted, but any adjustments should be based on empirical data and analyses that reflect actual operational and cost changes as the shipment size changes, not simply on a desire to make things straight forward and simple,” they said. - Chris Dupin