Class I Railroads post 12 months ROI of 8.42 percent

Their success in sizing operations to demand helped Class I railroads maintain a relatively high return on investment (ROI) during the 12 months ended Sept. 30.

During a period that contained many of the worst months of the recession, the industry earned an average return of 8.42 percent on its net investment, compared with 9.88 percent in the 12 months ended Sept. 30, 2008, according to the Surface Transportation Board.

BNSF Railway earned an ROI of 9.27 percent during the latest 12-month period vs. 10.66 percent a year earlier. Union Pacific's respective returns were 7.88 percent and 9.62 percent.

In the East, Norfolk Southern experienced one of the biggest swings in ROI, dropping to 9.48 percent from 14.42 percent. CSX Transportation posted a return of 8.15 percent this year vs. 8.55 percent in the same period last year.

Kansas City Southern earned an ROI of 0.38 percent this year, down from 8.70 percent. Canadian Pacific/Soo Line's return declined to 9.79 percent from 15.84 percent. CN/GrandTrunk's ROI dropped to 6.05 percent from 10.97 percent.

Industry-wide, total railway operating revenues in the 12 months ended Sept. 30, 2009, dropped sharply to $49.9 billion from the $58.4 billion reported a year earlier. Net railway operating income, on which ROI is based, dropped to $5.7 billion from $7.2 billion.

Source: Railway Age