STB Proposes Changing Class I Revenue Threshold

Montana Rail Link’s Gas Local is seen west of Plains, Mont. in May 2018. Photo by Justin Franz.

STB Proposes Changing Class I Revenue Threshold

By Justin Franz

WASHINGTON — The U.S. Surface Transportation Board is proposing a change to the revenue threshold rules that determine how a railroad is classified. The federal regulator made the proposal after Montana Rail Link filed a request earlier this year to change the rules because it was about to be making enough annual income that it would be considered a Class I. 

The STB is accepting comments on the matter until Nov. 2. 

Currently, any railroad with operating revenues of $489,935,956 or more is designated a Class I (The thresholds were last set by the Interstate Commerce Commission in 1992 and have been adjusted for inflation). But MRL, which relies heavily on traffic from BNSF Railway, could be making more than that within the next two years, according to a petition for rulemaking filed in February. MRL asked that the revenue threshold be increased to $900 million and the STB agreed. In its petition, the railroad noted that in 2018, the average operating revenue for Class I railroads was more than 27 times MRL’s total revenue for that year.

Presently, there are seven Class Ones in the United States: BNSF, Union Pacific, CSX, Norfolk Southern, Kansas City Southern, Soo Line (Canadian Pacific) and Grand Trunk (Canadian National). MRL states that imposing the Class One requirements on it would be detrimental to its business. 

Montana Rail Link was established in 1987 and currently operates the former Northern Pacific across southern Montana and northern Idaho.

This article was posted on: October 5, 2020