Class I railroad

A Class I railroad in the United States and Mexico, or a Class I rail carrier in Canada, is a large freight railroad company, as classified based on operating revenue.

Smaller railroads are classified as Class II and Class III. The exact revenues required to be in each class have varied over time, and they are now continuously adjusted for inflation.

Current criteria

The Surface Transportation Board (STB) defines a Class I railroad in the United States as "having annual carrier operating revenues of $250 million or more" after adjusting for inflation using a Railroad Freight Price Index developed by the Bureau of Labor Statistics (BLS).^[1] According to the Association of American Railroads (AAR), Class I railroads had minimum carrier operating revenues of $346.8 million (USD) in 2006.^[2]

In Canada a Class I rail carrier is defined (as of 2004) as a company that has earned gross revenues exceeding $250 million (CAD) for each of the previous two years.

The establishment of the criteria in the United States has always been subjective since different regulations apply to the different classes. In early 1991 both Montana Rail Link and Wisconsin Central asked the Interstate Commerce Commission (ICC) to increase the minimum annual operating revenue criteria (then established at $93.5 million USD) in order to avoid being re-designated as Class I, due to increased administrative and legal costs resulting from different regulations.^[3] This criterion was increased in 1992 to $250 million annually, which resulted in the Florida East Coast Railway having its status changed to Class II (the Class II/III criterion stayed at $20 million).^[4]

Currently eleven railroads in North America are classified as Class I, eight of which operate in the United States.

Canada, with no trackage in the United States

• Via Rail

United States and Canada, with trackage extending to United States and Canada for some railroads

• Amtrak
• BNSF Railway
• Canadian National Railway
• Canadian Pacific Railway
• CSX Transportation
• Kansas City Southern Railway
• Norfolk Southern Railway
• Union Pacific Railroad

Mexico, with no trackage in the United States

• Ferromex
• Kansas City Southern de México, wholly owned by the Kansas City Southern Railway

History

The classification of railroads in the U.S. as Class I, II or III was started by the Interstate Commerce Commission in the 1930s. Initially Class I railroads were defined as railroads with operating revenue of at least $1 million. There were 132 Class I railroads in 1939.

The $1 million figure was used until 1956 (at which time there were 113^[5]); however since that time it has increased faster than inflation. In 1956 it was increased to $3 million. By 1963 the number of Class I railroads had dropped to 102. By 1965 the cut-off had increased to $5 million, to $10 million in 1976 and to $50 million in 1978, at which point only 41 railroads were still Class I. The Class III category was dropped in 1956, but reinstated in 1978. In 1979 all switching and terminal railroads, even those with Class I or Class II revenues, were re-designated as Class III.

Currently the Class II and Class III designations are rarely used outside the rail transport industry. The Association of American Railroads typically divides non-Class I companies into three categories:

• Regional railroads operate at least 350 miles or make at least $40 million per year.
• Local railroads are non-regional railroads that engage in line-haul service.
• Switching and terminal railroads mainly switch cars between other railroads or provide service from other lines to a common terminal.

In the United States the Surface Transportation Board continues to use the designations of Class II and Class III since there are different labor regulations for the two classes.

See also

• List of U.S. Class I railroads
• Timeline of Class I railroads: 1910-1929, 1930-1976, 1977-present
• Rail transport in the United States
• Rail transport in Canada

References

1. ^ 49 CFR Part 1201, General Instrucutions 1-1, GPO, 2007
2. ^ Class I Railroad Statistics, AAR, April 21, 2008
3. ^ Arrivals and Departures, Trains March 1991
4. ^ Arrivals and Departures, Trains November 1992
5. ^ Profiles of the regionals, Trains December 1991

• 49 CFR Part 1201-Railroad CompaniesPDF (454 KB)
• Surface Transportation Board FAQs - Economic and Industry Information
• AAR - Class I Railroad StatisticsPDF (58.4 KB)
• The Family Tree of North American Railroads
• List and Family Trees of North American Railroads
• Uniform Classification of Accounts and Related Railway Records (UCA). Retrieved April 24, 2005.
• Stover, John F. (1999). The Routledge Historical Atlas of the American Railroads. Routledge, New York, New York. ISBN 0-415-92140-6.

Categories: Class I railroads in North America | Former Class I railroads in the United States