STB is required by law to publish the RCAF on at least a quarterly basis. The Association of American Railroads (AAR) each quarter computes three types of RCAF figures and submits them for STB approval:
- Unadjusted RCAF: “an index reflecting cost changes experienced by the railroad industry, without reference to changes in rail productivity.”
- Adjusted RCAF: “an index that reflects national average productivity changes as originally developed and applied by the ICC [Interstate Commerce Commission], the calculation of which is currently based on a five-year moving average.” According to STB, the five-year moving geometric average of productivity change for U.S. Class I railroads from 2017-2021 is 1.028 (2.8% per year).
- RCAF-5: “an index that also reflects national average productivity changes; however, those productivity changes are calculated as if a five-year moving average had been applied consistently from the productivity adjustment’s inception in 1989.” According to STB, RCAF-5 for third-quarter 2023 uses a productivity trend for the years 2016-2020, which is 1.025 (2.5% per year).
The STB on June 15 reported that it had reviewed AAR’s submission (download decision below) and adopted the figures for third-quarter 2023: unadjusted RCAF, 0.975 (down 2.9% from second-quarter 2023’s 1.004); adjusted RCAF, 0.389 (down 3.5% from second-quarter 2023’s 0.403); and RCAF-5, 0.372 (down 3.4% from second-quarter 2023’s 0.385).
Table A shows the index of railroad input prices, RCAF (Unadjusted), RCAF (Adjusted), and RCAF-5 for third-quarter 2023:
Table B shows the first-quarter 2023 index and the RCAF calculated on both an actual and a forecasted basis. The difference between the actual calculation and the forecasted calculation is the forecast error adjustment:
