With MRL on the Edge of Leveling Up, STB Raises Class I Threshold

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

With MRL on the Edge of Leveling Up, STB Raises Class I Threshold

By Justin Franz

WASHINGTON — The U.S. Surface Transportation Board has changed the revenue threshold that designates a railroad as a Class I carrier a year after Montana Rail Link, which was on the verge of becoming a Class I itself, requested the change. The board issued the decision on April 5.

Presently, 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. MRL asked in early 2020 that the revenue threshold be increased to $900 million. In its petition, the railroad notes that in 2018, the average operating revenue for Class I railroads was more than 27 times MRL’s total revenue for that year. 

According to the STB, the American Short Line & Regional Railroad Association supported MRL’s request while the Transportation Trades Department, AFL-CIO, a coalition of 33 different unions, came out against it. Ultimately, the STB sided with the railroad. “After considering the record, the Board agrees that MRL and any other Class II carriers that may be approaching the current revenue threshold are properly classified as regional carriers rather than as Class I carriers. The operational characteristics of regional carriers, like MRL, significantly differentiate them from Class I carriers.”

Montana Rail Link was established in 1987 and currently operates about 900 miles of the former Northern Pacific across southern Montana and northern Idaho. 

This article was posted on: April 7, 2021