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In 2012 a typical Class 1 railroad employee generated directly or indirectly an average of 10,765 tons originated and an average of $416,404 of revenue per ton originated. After allowance for an average compensation package of $112,600, a typical Class 1 employee contributed $303,804 to cover other expenses and provide a return to the investors. Comparatively, the average revenue generated directly or indirectly for the rail and road group, which includes trucks, was $405,650.  This information can be found at the American Association of Railroads and Fidelity Investments. Of course, the average revenue generated by an employee is just one ratio in a comprehensive income statement and, more importantly, in a statement of cash flows. Moreover, averages can be deceptive. Nevertheless, these numbers tend to support the notion that the nation's freight railroads are efficient.  Another significant number is the return on equity, which as noted in another post, has been outpacing the S&P 500 for the last two or more years. In 2012 the average gross revenue per ton originated was $38.68.  The average for coal was $20.40, which was the second lowest for the commodities hauled by the nation's freight railroads. The lowest was $9.93 for metallic ores, whilst the highest was $254.89 for motor vehicles and equipment. The average gross revenue for miscellaneous mix shipments, which was mostly containers, was $78.74.   A decline in coal shipments does not necessarily mean the railroads will fall on hard times. If they can replace a portion of the coal tons and the coal revenues with commodities that generate more revenue per ton, i.e. containers, motor vehicles,  etc., which is a possibility given the challenges facing truckers, the nation's railroads and investors could come out smelling like a rose.
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