Railways in the United States are designated as Class I, Class II, or Class III according to revenue benchmarks established by the Surface Transportation Board (STB). The STB set revenue thresholds in 1992.
The STB has adjusted these revenue amounts for inflation. In 2021, the most recent adjustment increased the revenue thresholds to US$943,898,958 for Class I carriers and US$42,370,575 for Class II carriers. Class III carriers are railways with less than US$42,370,575 in revenue.
At RailState, our network covers primarily Class I Railways.
Class I railroads are railway carriers designated by the Surface Transportation Board (STB) that earn more than $250million in revenue per year. This number has been adjusted for inflation and now stands at US$943,898,958 as of 2021.
There are 7 Class I Railroads operating in North America that focus primarily on transporting freight and cargo:
There is a single Class I Railroad that is primarily focused on passenger transportation: Amtrak.
On March 15, 2023, the Surface Transportation Board (STB) approved a merger between Canadian Pacific Railway and Kansas City Southern Railway. This will result in there being 6 freight and cargo-focused Class I railroads.
BNSF Railway is the largest Class I railroad by revenue, miles of track coverage, and count of employees.
With the merger of Canada Pacific Railway and Kansas City Southern Railway, the Class I railroads will be much closer in size to each other now that the two smallest railroads have combined.
The railroad classes use the roman numerals I, II, and III. Some choose to use the numbers 1, 2, and 3, but the most common usage is Class I, Class II, and Class III railroads.
CSX is the short name for the CSX Transportation. CSX Transportation is a Class I freight railroad company that primarily operates in the eastern United States and in eastern provinces of Canada. Its parent company is CSX Corporation, which is headquartered in Florida and has a large real estate business in addition to the CSX railway.
In 1980, two railroads, Chessie System and Seaboard Coast Line Industries, merged to form CSX. The CSX name uses letters from the previous railroads’ names but does not have a specific meaning today.
BNSF is the reporting mark for the BNSF Railway, one of the largest Class I freight railroads in the United States. The letters BNSF stand for Burlington Northern Santa Fe. The Class I railroad came about when a holding company purchased the Atchison, Topeka and Santa Fe Railway (often called the “Santa Fe”) and Burlington Northern Railroad (often called “Burlington Northern”), and merged the railways into the Burlington Northern and Santa Fe Railway in 1996. The company officially changed its name to BNSF Railway in 2005. The railroad company was purchased by Berkshire Hathaway in 2009.
Class II railroads are railway carriers designated by the Surface Transportation Board (STB) that earn between $20million and $250million in revenue per year. These numbers have been adjusted for inflation and now stand at between US$42,370,575 and US$943,898,958 as of 2021.
There are two Class I railways in Canada. Canadian National Railway (CN) and Canadian Pacific Railway (CPR) are the two dominant freight rail operators in Canada. They are Class I Railways because they operate in the United States and have revenues that exceed $250 million (greater than US$943,898,958 as of 2021). At RailState, our network covers all of the Canadian Class I Railways.
Shortline railroads are also known as Class III railways. Class III railroads are railway carriers designated by the Surface Transportation Board (STB) that earn less than $20million in revenue per year. This number has been adjusted for inflation and now stands at US$42,370,575 as of 2021.
In the United States freight railroads are typically privately owned and maintained. All Class I railways in the United States, those railways earning more than US$943,898,958 per year in revenue, are all private companies. Some railroads are publicly traded corporations.
Canadian National Railway (CN) and Canadian Pacific Railway (CPR) are the two dominant freight rail operators in Canada and are both privately owned. Canadian National Railway (CN) was a Crown Corporation until 1995 when it was privatized through an initial public offering (IPO).