Most people in the transportation industry have heard about Class I railroads, but what does that mean? You may recognize some of the major carriers easily. But what about the rest of the industry and how are railroads classified?

Freight railroads are classified by the US Surface Transportation Board according to annual operating revenues. From the STB website, here is their definition: “For regulatory purposes, the Board categorizes rail carriers into three classes:  Class I, Class II, and Class III.  The classes are based on the carrier’s annual operating revenues.  These thresholds, which were set in 1992, establish Class I carriers as any carrier earning revenue greater than $250 million, Class II carriers as those earning revenue between $20 million and $250 million, and Class III carriers as those earning revenue less than $20 million.  See 49 C.F.R. § 1201 (1-1 Classification of Carriers). To account for inflation, the Board each year calculates Deflator Factors to adjust railroad annual operating revenues to 1991 levels.  The railroad revenue deflator formula is based on the Railroad Freight Price Index developed by the Bureau of Labor Statistics.”

The 7 Class I freight railroads include BNSF Railway, Canadian National Railway with its subsidiary Grand Trunk Corporation, Canadian Pacific Railway with its subsidiary Soo Line Corporation, CSX Transportation, Kansas City Southern Railway, Norfolk Southern Railway, and Union Pacific Railroad.

According to Wikipedia, the current Class II freight railroads number nineteen and include: Alaska Railroad (ARR), Buffalo and Pittsburgh Railroad (BPRR), Central Oregon and Pacific Railroad(CORP), Florida East Coast Railway (FEC), Great Lakes Central Railroad (GLC), Indiana Rail Road (INRD), Iowa Interstate Railroad (IAIS), Kansas & Oklahoma Railroad (KORR), Long Island Rail Road (LI), Montana Rail Link (MRL), New York Susquehanna & Western Railway (NYSW), Paducah and Louisville Railway (PAL), Providence and Worcester Railroad (PW), Pan Am Railways (PAR) (Acquisition of PAR by CSX Transportation is under review by the Surface Transportation Board), Rapid City, Pierre, and Eastern Railroad (RCPE), Reading Blue Mountain and Northern Railroad (RBMN), commonly known as simply “Reading and Northern”, Toledo, Peoria and Western Railway (TPW), Wisconsin and Southern Railroad(WSOR), and Wheeling and Lake Erie Railway (WE).

So there you are in terms of the classification of freight rail carriers. If your local carrier is not listed, they would be Class III.

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