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Surface Transportation Board Suggests Changes to Costing System

February 8th, 2013

The U.S. Surface Transportation Board has proposed several changes to its general purpose costing system, the Uniform Railroad Costing System.

The board is proposing to adjust the manner in which URCS calculates certain system-average unit costs to better reflect railroad operations. The proposal will automatically reflect economies of scale relative to shipment-size increases, eliminating the current need for a separate mathematical adjustment referred to as the “make-whole adjustment.”

The board also is proposing to make a number of changes to URCS that it says would result in more accurate movement costs, and to change two of the agency’s reporting requirements.

URCS enables the board to determine a railroad’s variable costs of providing rail transportation service, the jurisdictional threshold in rate disputes between railroads and their customers, and whether challenged rates are reasonable. URCS also is used in proceedings involving proposed rail-line abandonments.

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