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A Class I railroad in the United States, or a Class I railway (also Class I rail carrier) in Canada, is one of the largest freight railroads, 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 through the years, and they are now continuously adjusted for inflation.
Current criteria
As of 2004, a Class I railroad, as defined by the Surface Transportation Board, has an operating revenue exceeding $277.7 million. The exact setting of the cut-off figure has always been as much a political decision as anything else, as different rules apply to the different classes. For instance, in early 1991, Montana Rail Link and Wisconsin Central asked the Interstate Commerce Commission to raise the bar, then set at $93.5 million, to avoid being redesignated as Class I, due to extra costs and paperwork.Arrivals and Departures, Trains March 1991 The cutoff was raised at the end of 1992 to $250 million, dropping the Florida East Coast Railway to Class II (the Class II/III line stayed at $20 million).Arrivals and Departures, Trains November 1992
In Canada, a Class I railway is defined (as of 2004) as a company that has earned gross revenues exceeding $250 million for each of the previous two years.
Currently seven United States railroads are classified as Class I. The two major players east of the Mississippi River are CSX Transportation and the Norfolk Southern Railway (the latter called "Norfolk Southern Combined Railroad Subsidiaries" by the AAR). West of the Mississippi, the BNSF Railway and Union Pacific Railroad cover roughly the same territory. The Kansas City Southern Railway is a smaller system, mainly forming part of the NAFTA Railway corridor from the Midwest into Mexico. Canadian National Railway& Canadian Pacific Railway- are also considered Class I, since they have major trackage lines in the Northern United States. The Guilford Rail System is a freight railway that serves the New England Area of the United States.
Two Canadian railways are currently Class I - the Canadian National Railway and Canadian Pacific Railway. Those companies would be Class I by the U.S. definition. Two Mexican railroads would fit the definition if they were U.S. companies - Ferrocarril Mexicano and Grupo Transportación Ferroviaria Mexicana; the latter is controlled by the Kansas City Southern Railway.
Amtrak and VIA Rail provide intercity passenger service in the U.S. and Canada, respectively, but as they are not typical freight carriers, they are not classified.
History
The classification of U.S. railroads 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 Profiles of the regionals, Trains December 1991); 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 redesignated as Class III.
Nowadays, the Class II and Class III designations are rarely used. The Association of American Railroads instead splits 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.
Consolidations
Over the years, many Class I railroads have merged to stave off bankruptcy or simply to increase profits. The following is a list of consolidations that have merged at least one Class I railroad into a larger one:- 1960: Delaware Lackawanna and Western Railroad and Erie Railroad merge to become Erie Lackawanna Railroad
- July 1, 1967: Atlantic Coast Line Railroad and Seaboard Air Line Railroad into Seaboard Coast Line Railroad
- 1968: New York Central and Pennsylvania Railroad merge to become Penn Central
- 1969: New York, New Haven & Hartford Railroad (also known as the New Haven Railroad) becomes part of Penn Central on 1/1/1969
- 1970: Chicago, Burlington and Quincy Railroad, Great Northern Railway, Northern Pacific Railway and Spokane, Portland and Seattle Railway all merge into Burlington Northern Railroad
- 1976: Central Railroad of New Jersey, Erie Lackawanna Railroad, Lehigh and Hudson River Railway, Lehigh Valley Railroad, Penn Central and Reading Railroad all merge into Conrail
- 1982: Louisville and Nashville Railroad and Seaboard Coast Line Railroad into Seaboard System Railroad
- 1982: Norfolk and Western Railroad and Southern Railway merge to form Norfolk Southern
- 1982: Western Pacific Railroad and Missouri Pacific Railroad merged into Union Pacific Railroad
- 1985: Milwaukee Road merged into Soo Line Railroad
- 1986: Seaboard System Railroad renamed CSX Transportation
- 1987: Baltimore and Ohio Railroad and Chesapeake and Ohio Railway merged into CSX Transportation
- 1988: Denver and Rio Grande Western Railroad and Southern Pacific Railroad merge, keeps Southern Pacific name
- 1988: Missouri-Kansas-Texas Railroad merged into Union Pacific Railroad
- 1995: Chicago and North Western Railway merges into Union Pacific Railroad
- 1995: Atchison, Topeka and Santa Fe Railway and Burlington Northern Railroad merge to become Burlington Northern and Santa Fe Railway
- 1996: Southern Pacific Railroad merges into Union Pacific Railroad
- 1998: Conrail's main operations divided between CSX Transportation and Norfolk Southern; Conrail continues as a CSX-NS joint venture for shared trackage areas
Table of Class I railroads by year
Class I railroads timeline
See also
References
- AAR - Class I Railroad Statistics (PDF)
- The Family Tree of North American Railroads
- Uniform Classification of Accounts and Related Railway Records (UCA). Retrieved April 24, 2005.
Class I railroads in the United States | Former Class I railroads in the United States
"Class I railroad"