Freight Rail Services Price Index (FRSPI)

Detailed information for March 2023

The FRSPI provides monthly and quarterly estimates of price changes for the mainline freight rail industry in Canada. This industry is comprised of establishments primarily engaged in operating railways for the transport of goods over a mainline rail network.

Data release - March 30, 2023

• Description
• Data sources and methodology
• Data accuracy

Description

The FRSPI provides monthly and quarterly estimates of price changes for the mainline freight rail industry in Canada. This industry is comprised of establishments primarily engaged in operating railways for the transport of goods over a mainline rail network. A mainline rail network is a system that usually comprises one or more trunk lines, into which a network of branch lines feed.

The FRSPI is an important tool used by the Canadian System of Macroeconomic Accounts (CSMA) for deflation. Joined with other business service indexes, the FRSPI can provide better estimates of real output and productivity, monitor inflation and feed an important research agenda at Statistics Canada. Other federal departments and provincial governments use this index to develop national and regional economic policies and programs to promote domestic and international competitiveness.

As an economic indicator, the FRSPI can be used by businesses to measure their performance against industry standards, to plan marketing strategies and to prepare business plans for investors. Also, the FRSPI can be used by trade associations, business analysts and investors to study the economic activity, performance and characteristics of the freight rail services industry.

Data are available at the Canada level only.

Statistical activity

These indexes are a part of the Services Producer Price Index program (SPPI) at Statistics Canada.

The SPPI program develops and produces price indexes for a wide range of business service categories. This initiative fills an important data gap in the area of economic statistics and has resulted in a more comprehensive set of service price indexes. It also allows Statistics Canada to produce more accurate estimates of real value added of the Gross Domestic Product and changes in productivity.

Reference period: The time period for which the FRSPI equals 100; currently this is the year 2018.

Collection period: Data for every reference month are collected on the second Monday of the month.

Subjects

• Prices and price indexes
• Service price indexes
• Transportation

Data sources and methodology

Target population

The target population for the FRSPI consists of companies primarily engaged in operating railways for the transport of goods over a mainline rail network. The services covered fall under the North American Industry Classification System (NAICS) Canada 2017, number 482113 - Mainline Freight Rail Transportation.

• Additional documentation

Instrument design

This methodology does not apply.

Sampling

This is a sample survey with a longitudinal design.

Data collected for the FRSPI covers only Class I carriers. The Class I carriers is comprised of railway companies that realized gross revenues of at least $250 million for the provision of Canadian rail services, in each of the two calendar years before the year in which information is provided pursuant to the Carriers Information Regulations.

Sampling Unit
The sampling unit is the enterprise.

The enterprise, as a statistical unit is defined as an institutional unit that directs and controls the allocation of resources relating to its operations, and for which financial statements are maintained from which international transactions, an international investment position and a financial position for the unit can be derived.

Data sources

Responding to this survey is mandatory.

Data are collected directly from survey respondents and extracted from administrative files.

Price quotes are collected monthly from websites and other sources. Prices are defined as the amount charged by a carrier for delivering a carload of a certain commodity and of a specific weight, on a specific distance (specific origin and destination) and under certain terms of shipment. Prices do not include taxes and other optional service fees.

Error detection

Error detection is conducted at the time of data collection and also during post collection processing, using a set of systematized error detection procedures to identify outliers and possible reporting anomalies. Records that fail these edits are reviewed for editing and correction when necessary or edit failure may trigger a follow-up with the respondent.

Time and effort is devoted to keeping the specifications constant such that only the pure changes in price are tracked. Some information are also collected in order to ensure, as much as possible, that the collected data correspond to the same specifications over time. This constant quality price then feeds into the Canadian System of Macroeconomic Accounts' (CSMA) estimates of constant dollar GDP.

Imputation

Missing data are generally estimated by a systematized imputation process. In any given period, price data may not be available for estimation. In such cases, missing data are imputed using the average price movement of remaining units within the same stratum (overall mean or targeted mean imputation method).

Estimation

Prices
Prices are defined as the amount charged by a carrier for delivering a carload of a certain type of commodity and of a specific weight on a specific distance (specific origin and destination) and under certain terms of shipment. The prices do not include taxes and other optional service fees.

For every monthly collection cycle, base rates and applicable fuel surcharges (mileage or percentage based) are also collected for selected origin-destination pairs across Canada and US as well as for predetermined commodity groups. While requested for the calculation of the fuel surcharge based on mileage, the distance between every origin-destination pair is provided by official railway maps and third party software.

Weights
The weights correspond to the annual rail company revenues from freight transportation. The annual revenues are derived from the companies' annual reports and the Statistics Canada's Annual Survey on Rail Transportation (record number 2734).

Indexes
Estimates are produced by calculating a weighted average of price relatives, which are chained together to form an index series. The FRSPI is a Laspeyres chain linked index.

Quality evaluation

An in-depth assessment of quality is conducted prior to the dissemination of estimates. This assessment is based on two key elements of quality (accuracy and coherence), as defined in Statistics Canada's guidelines for the validation of statistical outputs.

The survey's data collection strategy is designed to ensure that targeted response rates are met every cycle. Analysts pay close attention to this metric and react appropriately to ensure that the survey's coverage of the industry is thorough. Particular attention is also given to ensuring that sampled products or services are representative of actual transactions happening in the market place. These two activities, fundamental to the overall quality of the estimates, are done consistently.

Analysts also undertake additional validation activities every cycle to ensure the coherence of survey estimates. These include among others activities: analysis of price changes over time (including analysis of trends), at the business/company, industry, subsector and sector levels; certification of key contributors to price change; and confrontation of estimates against other related data sources. Contextual analysis of survey results is also performed in light of prevailing economic conditions.

Engagements with relevant stakeholders are also undertaken periodically. Forums involving other Statistics Canada analysts, industry stakeholders and partners at other national and international statistical agencies provide valuable insights that inform the development and research agenda of the program.

Disclosure control

Statistics Canada is prohibited by law from releasing any information it collects which could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

Revisions and seasonal adjustment

With each release data, data for the previous month may have been revised. The series are also subject to an annual revision with the release of second quarter data of the following reference year. The indexes are not seasonally adjusted.

Data accuracy

The statistical accuracy of this index depends on price and weight data obtained from sample surveys. Each type of input data is subject to its own errors. Processing procedures for editing and imputation are in place to ensure the quality of data. Consequently, the aggregate indexes at all levels are considered to be statistically reliable.

Response Rates
FRSPI uses a survey methodology designed to control errors and reduce their effect on estimates. However, the survey results remain subject to sampling and non-sampling error.

Sampling error results when observations are made only on a sample and not on the entire population, while all other errors arising from the various survey phases are referred to as non-sampling errors. For example, these type of errors can occur when a respondent provides incorrect information or does not answer certain questions; when a unit in the target population is omitted or covered more than once; when an out of scope unit is included by mistake or when errors occur in data processing, such as coding or capture errors.

The non-response portion of the sample is imputed to achieve an effective 100% coverage. To be provided when data are released.