(Note: Updated cost index data can be viewed on this page.)
Data from two rail industry cost indexes is presented below: the Rail Cost Adjustment Factor (RCAF) and the All Inclusive Less Fuel (All-LF).
The RCAF measures the rate of inflation in railroad inputs such as labor and fuel and is calculated by the Association of American Railroads (AAR). The RCAF was created for regulatory purposes and is governed by the Surface Transportation Board (STB).
There are five indexes associated with the RCAF:
- The forecasted All-Inclusive Index – the price index that underlies the RCAF.
- The actual All-Inclusive Index – calculated when the data becomes available,
- The RCAF (Unadjusted) – derived by adjusting the forecasted All-Inclusive Index by the “forecast error” from the second prior quarter,
- The RCAF (Adjusted) – derived by modifying the RCAF (Unadjusted) for a moving five-year productivity gains as soon as the latest year of productivity is available, and
- The RCAF-5 reflects the five-year moving average productivity adjustment factor which is incorporated into the index during the first quarter of each year.
STB Ruling: 2nd Quarter 2016 Decision 03-18-2016 (pdf)
All Inclusive Less Fuel Index
The All-LF index was created to provide a parallel measure of the Rail Cost Adjustment Factor without the influence of the fuel cost component. All of the components (Labor, M&S, etc.) used in the All-Inclusive Index Less Fuel match those of the All-Inclusive Index used to calculate the Rail Cost Adjustment Factor.
Source: American Association of Railroads, 4Q/2012 = 100