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; however they are now continuously adjusted for inflation.

[edit] 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] The criteria 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 criteria stayed at $20 million).^[4]

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

United States

• BNSF Railway
• CSX Transportation
• Kansas City Southern Railway
• Norfolk Southern Railway
  • The Surface Transportation Board also classifies the Cincinnati, New Orleans and Texas Pacific Railway as Class I, grouping it with NS as "Norfolk Southern Combined Railroad Subsidiaries".^[5]
• Union Pacific Railroad

Canada, with trackage extending into the United States

• Canadian National Railway
  • The Surface Transportation Board classifies the Grand Trunk Corporation as the CN's Class I subsidiary, itself owning a number of companies, including several former Class I carriers.^[6]
• Canadian Pacific Railway
  • The Surface Transportation Board classifies the Soo Line Railroad as the CP's Class I subsidiary.^[7]

Mexico, with no trackage in the United States

• Ferrocarril Mexicano
• Grupo Transportación Ferroviaria Mexicana (wholly owned by the Kansas City Southern Railway and operated as Kansas City Southern de México)

Both Amtrak and VIA Rail provide intercity passenger rail service in the U.S. and Canada, respectively, and have both been considered Class I.

[edit] 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^[8]); 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 outside the rail transport industry. The American Association of 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.

[edit] 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:

• 1940: Gulf, Mobile and Northern Railroad and Mobile and Ohio Railroad merge to form Gulf, Mobile and Ohio Railroad.
• 1947: Chesapeake and Ohio Railroad absorbs The Pere Marquette Railway.
• 1957: Nashville, Chattanooga and St. Louis Railway absorbed by the Louisville and Nashville Railroad.
• 1957: New York, Ontario and Western Railway is abandoned.
• 1959: Norfolk and Western Railway absorbs The Virginian Railway.
• 1960: Delaware Lackawanna and Western Railroad and Erie Railroad merge to become Erie Lackawanna Railroad.
• 1960: Minneapolis and St. Louis Railway merged in to Chicago & Northwestern Transportation Company.
• 1961: Minneapolis, St. Paul and Sault Ste. Marie Railroad, Wisconsin Central Railroad and Duluth, South Shore and Atlantic Railroad merged in to Soo Line Railroad.
• 1964: Norfolk and Western Railway merges the New York, Chicago and St. Louis Railroad (“Nickel Plate Road”), and leases the Wabash Railroad and the Pittsburgh and West Virginia Railway.
• 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.
• 1968: Chicago Great Western Railroad merged in to Chicago & Northwestern Transportation Company.
• 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.
• 1972: Chesapeake and Ohio Railway, Baltimore and Ohio Railroad and Western Maryland Railway become the Chessie System.
• 1972: Illinois Central Railroad, Gulf, Mobile and Ohio Railroad, and Columbus and Greenville Railway merge into Illinois Central Gulf 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.
• 1980: Chicago, Rock Island and Pacific Railroad commences liquidation, and is eventually sold piecemeal to various railroads.
• 1980: Burlington Northern merges the St. Louis-San Francisco Railway (“Frisco”).
• 1982: Louisville and Nashville Railroad and Seaboard Coast Line Railroad merge to create 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: Chicago, Milwaukee, St. Paul and Pacific Railroad merged into Soo Line Railroad.
• 1986: Seaboard System Railroad merged with Chessie System to form 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.
• 1992: Soo Line Railroad merges into Canadian Pacific Railway.
• 1994: MidSouth Rail merges into Kansas City Southern Railway.
• 1995: Chicago and North Western Transportation Company 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.
• 1999: Illinois Central Railroad merges into Canadian National Railway.
• 2005: Texas Mexican Railway merges into Kansas City Southern Railway.

[edit] Table of Class I railroads by year

[edit] Class I railroads timeline

[edit] See also

• List of U.S. Class I railroads
• Timeline of U.S. Class I railroads
• Rail transport in the United States
• Rail transport in Canada