Class I Railroads, The Industry Standard

Class I railroads, which, unlike their smaller companions do not really have another name that they are known by (such as Class IIIs known as short lines and Class IIs as regionals). Perhaps that is because they are the industrial leaders and are always at the forefront of the latest technologies and newest locomotives on the market. Over the years the number major railroads has shrunk due to mergers, and what remains today are seven very large mega systems; including the Canadian roads, Canadian Pacific and Canadian National, there is also CSX Transportation, Norfolk Southern Corporation, Union Pacific, BNSF Railway, and Kansas City Southern. 

While the definition of a major railroad has changed over the years one thing about the class has always remained the same, it is defined as the largest operating railroad, in terms of revenue, in the country. I apologize that much of the “stuff” below can be rather boring as it includes many facts and details, but for those who have a deep interest in railroading (or business in general) will likely find it interesting. As of 2005, the Association of American Railroads (AAR) defined Class Is of having operating revenues exceeding $319.3 million annually. As reference this number has changed many times over the years, mostly the result of rising inflation. 

For instance, in 1939 a premier U.S. railroad was defined as having operating revenues of at least $1 million annually but this figured changed to $3 million in 1956, $5 million in 1965, $10 million in 1976, $50 million in 1978, $250 million in 1993, and finally the current standard of $319.3 million (please note that not all dollar amount changes have been included here). It’s also hard to believe that over that time period the number of big railroads has shrunk from over 130 in 1939 to only seven today; including Canadian National and Canadian Pacific it is BNSF Railway, CSX Transportation (or CSXT, a division of CSX Corporation and commonly known as just CSX), Kansas City Southern, Norfolk Southern, and Union Pacific. Of these Kansas City Southern and Union Pacific are the only remaining roads whose names have remained unchanged throughout the decades. 

Although there are currently only seven operating systems within the United States’ borders, these companies comprise a staggering 93 percent of the industry’s revenues. Similarly Class Is also make up the majority of overall route miles as well as total freight tonnage moved. The below table highlights each railroad (including Canadian National and Canadian Pacific) regarding their 2012 operating revenue. Of note Kansas City Southern de Mexico is part of the Kansas City Southern system. It should be noted that this latest graph now shows CSX ahead of Norfolk Southern in regards to operating revenue. For years this was not the case. However, after CSX gained a new head man in the way of Michael Ward in the early 2000s the railroad has been making large strides in improved service and operating ratios, particularly in just the last few years. 

For more statistical data please click here. As you can see from the previous link, the Association of American Railroads' website provides virtually all of the information you may be researching regarding the railroad industry. However, if you are interested in digging deeper into railroad statistics and similar such information, another fine resource is the Bureau of Transportation Statistics' website

While the western roads of Union Pacific and BNSF continue to outpace all other major roads currently in terms of revenues, do not be surprised with CSX's size and improved efficiency if it begins to close this gap somewhat in the coming years (in early 2012 the railroad announced a massive revenue gain with new customers totaling more than $230 million). In any event, for railroad enthusiasts and historians unfortunately the number of large lines in operation likely will not be growing any time soon, that is unless one of the major short line owners would somehow manage to begin unifying their small lines which quite likely will not happen. 

Besides Class Is there are also a number of Class IIs, commonly referred to as regionals, and Class IIIs, which are known as short lines or terminal/switching railroads. While these classes of railroads make up just a fraction of the overall annual tonnage hauled throughout the country they make up the greatest number of railroads, totaling well over 500. Likewise, in many ways, these smaller railroads can be the most interesting, reminders of single-car customer shipping and local freights making their way down a backwoods branchline. For more information on regionals, please click here. Lastly, for more information on short lines, please click here. 

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