Management

STB sets 2013 railroad cost of capital at 11.32%

The Surface Transportation Board on July 31, 2014 issued its decision calculating the railroad industry’s after-tax cost of capital for 2013 as 11.32%, a slight increase over 2012’s 11.12%. The cost-of-capital figure represents STB’s estimate of the average rate of return needed to persuade investors to provide capital to the freight rail industry, and is used to determine if railroads are revenue-adequate.

Rail freight traffic continues to grow

The Association of American Railroads reported continued growth in U.S. rail traffic for the week ending July 26, 2014, with 306,988 total carloads, up 4.3% compared with the same week last year. Total U.S. weekly intermodal volume was 264,809 units, up 3.3% compared with the same week last year. Total combined U.S. weekly rail traffic was 571,797 carloads and intermodal units, up 3.8% compared with the same week last year.
Commentary

What history can tell us about things to come

In February 1882, Joseph Osgood allowed shortsightedness to steer him wrong. As newly-appointed chief engineer for the California Southern Railroad (which would later become part of the Santa Fe Railway), he was tasked with constructing a new rail line that would link the seaport city of San Diego with one—or both—of the transcontinental lines that were building their way toward Los Angeles.

KCSR reorganizes operating department

Kansas City Southern has made organizational changes within the operations department of its U.S. subsidiary, The Kansas City Southern Railway Company (KCSR).

CN, CP: Bring on the harvest

Canada’s 2014-2015 grain harvest will soon be under way, and both CN and Canadian Pacific say they are well-prepared to accommodate the new harvest with a steady throughput rate in synch with the grain supply chain, and are able to address the excess carryover from last year’s record crop by as early as next spring.
Commentary

When you get a good deal, take it

Arbitrator Robert O. Harris told the United Transportation Union (UTU) and railroads in 1991, then unable to agree at the bargaining table, “Welcome to the oldest established craps game in Washington. Like the suckers in ‘Guys and Dolls,’ you are risking your futures on the roll of the dice [when you fail to make a voluntary agreement].”
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