The Ultimate Guide to Railroad Classes: Defining Class I, Class II, and Class III Railroads

What are railroad classes?

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.

• Class I – Revenue greater than $250M per year
• Class II – Revenue between $20M and $250M per year
• Class III – Revenue less than $20M

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.

What are Class I railroads?

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.

Examples of Class I Railroads

There are 6 Class I Railroads operating in North America that focus primarily on transporting freight and cargo:

• BNSF Railway
• Canadian National Railway
• CPKC (The merged Canadian Pacific Railway and Kansas City Southern Railway)
• CSX Transportation
• Norfolk Southern Railway
• Union Pacific Railroad

There is a single Class I Railroad that is primarily focused on passenger transportation: Amtrak.

On April 14, 2023, the two smallest Class I railroads, Canadian Pacific Railway and Kansas City Southern Railway, merged to form CPKC. 

What is the biggest Class I Railroad?

BNSF Railway is the largest Class I railroad by revenue, miles of track coverage, and count of employees.

• BNSF Railway – $23.9 Billion Revenue, 32,500 route miles, 35,000 employees.
• Union Pacific Railroad – $24.1 Billion Revenue, 32,100 route miles, 32,100 employees.
• CSX Transportation – $14.7 Billion Revenue, 20,000 route miles, 25,000 employees.
• Norfolk Southern Railway – $12.2 Billion Revenue, 21,200 route miles, 20,000 employees.
• Canadian National Railway – $12.5 Billion Revenue, 20,000 route miles, 24,000 employees.
• CPKC – Estimated $9 Billion Revenue, 20,000 route miles, 19,000 employees after the merger of Canadian Pacific Railway and Kansas City Southern Railway. 

With the merger of Canada Pacific Railway and Kansas City Southern Railway, the Class I railroads are much closer in size. Canada Pacific Railway was about half the size of Canadian National. Kansas City Southern was the smallest Class I with revenues of $2.75B and 4,000 route miles before the merger. 

Is it Class I or Class 1?

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.

What does CSX stand for?

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.

What does BNSF stand for?

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.

What are Class II railroads?

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.

Examples of Class II railroads

• Alabama and Gulf Coast Railway (AGR)
• 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)
• Kyle Railroad (KYLE)
• Long Island Rail Road (LI)
• Missouri and Northern
• Arkansas Railroad (MNA)
• Montana Rail Link (MRL)
• New York, Susquehanna and Western Railway (NYSW)
• Paducah and Louisville Railway (PAL)
• Providence and Worcester Railroad (PW)
• Pan Am Railways (PAR)
• Portland and Western Railroad (PNWR)
• 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)
• Wheeling and Lake Erie Railway (WE)

Class I Railroads in Canada

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.

What are shortline railroads?

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.

Who owns the Class I and Class II railways in the United States?

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.

Who owns the Class I railways in Canada?

Canadian National Railway (CN) and Canadian Pacific Railway (CPKC) 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).