Frank Wilner Opinion: Beware the operating ratio trap

By Frank N. Wilner, Capitol Hill Contributing Editor, Railway Age Magazine; February 11, 2019

Watching Washington, February 2019: Sizzle sells product. No wonder the sizzle of ever-lower operating ratios is leading to remarkably higher railroad share prices. But as operating ratios—operating expenses as a percentage of operating revenue—flirt with a sub-60%, the meaning for the longer term is unclear.

A broader range of metrics is essential to assessing trade-offs, such as between operating and capital expenses; productivity, skilled labor and technology; static margins and growth; and impacts on safety.

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