Freight Railroads: Updated Information on Rates and Other Industry Trends Page: 2 of 15
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variable cost (R/VC)-that is, the traffic STB regards as potentially captive-and the
revenue generated from that traffic have declined. We also reported that traffic
traveling substantially over the statutory threshold for rate relief (rates over 300
percent R/VC) has increased since 1985.
You asked us to update our October report using 2005 data, which became available
after we issued our report. This report provides that update, including changes in
industry and commodity rates, other costs to shippers (such as railcar ownership and
miscellaneous revenue), and data on traffic traveling at rates equal to or greater than
180 percent R/VC. Also, we are providing additional information and analysis of these
data-including rates, tonnage, and revenue from 1985 through 2005-in the form of
an e-supplement, which can be viewed at GAO-07-292SP.2
To update our October 2006 report, we examined STB's Carload Waybill Sample3
from 1985 through 2005 (the latest year for which data were available at the time of
this review). This database includes information on rail rates across the industry and
by commodity, as well as tonnage, federal regulation, and other statistics. STB
disguises some revenues to avoid disclosing confidential business information to the
public, but we obtained a version of the Carload Waybill Sample that does not
disguise revenues. Data derived from this database have been aggregated at a level
sufficient to protect confidentiality. We used rate indexes and average rates to
measure rate changes over time. A rate index attempts to measure rate changes over
time by holding constant the underlying collection of items that are shipped. For
issues related to R/VC ratios, we used data from the Carload Waybill Sample to
identify the specific revenues and variable costs and to compute R/VC ratios for the
commodities and markets we examined. Using this information, we then identified
those commodities and areas whose R/VC ratios were above or below the 180 percent
R/VC level, as well as those areas above the 300 percent R/VC level.
We determined that the data used in this report were sufficiently reliable for the
purpose of our review. However, during our work we noted anomalous tonnage data
estimated by one carrier in 2005 for one commodity (miscellaneous mixed shipments,
including intermodal shipments). This carrier reported a significant number of
waybill records with a single tonnage value rather than the range of values reported
by other carriers and by this carrier in years prior to 2005. This lack of variation
caused us to question the reliability of these records and to work with STB officials to
investigate further. STB officials stated that the anomaly resulted from a change this
carrier instituted in its methodology for estimating the tonnage of certain railcars and
that despite the lack of variation STB had no basis for believing these data were in
error. STB provided us additional information on this new methodology; however,
we remained concerned about the lack of conformity with the reporting practices of
other railroads for similar movements. As a result, we explored with STB various
2GAO, Freight Railroads: Electronic Supplement on Rates and Other Industry Trends, 1985-2005,
GAO-07-292SP (Washington, D.C.: August 15, 2007).
3The Carload Waybill Sample is a sample of railroad waybills (in general, documents prepared from
bills of lading that authorize railroads to move shipments and collect freight charges); the sample
contains information on rail rates.
GAO-07-291R Freight Railroads
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United States. Government Accountability Office. Freight Railroads: Updated Information on Rates and Other Industry Trends, text, August 15, 2007; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc295883/m1/2/: accessed November 15, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.