||Overview of U.S. Freight Railroads
of Freight Railroads Operating in the United States
Freight Railroad Traffic
Public Benefits of Freight Railroads
Relationship of Passenger Rail to Freight Rail in the United States
||Profile of Freight Railroads Operating in the United
||Freight railroads are
critical to the economic well-being and global competitiveness of
the United States. They move 42 percent of our nation's freight (measured
in ton-miles) - everything from lumber to vegetables, coal to orange
juice, grain to automobiles, and chemicals to scrap iron - and connect
businesses with each other across the country and with markets overseas.
They also contribute billions of dollars each year to the economy
through investments, wages, purchases, and taxes.
There were 554 common carrier freight railroads operating in the
United States in 2002, classified into five groups.
Class I Railroads
- The Burlington Northern and Santa Fe
- CSX Transportation (CSX).
- Grand Trunk Corporation, which consists
of the U.S. operations of Canadian National (CN), including
the former Grand Trunk Western (GTW), Illinois Central (IC),
and Wisconsin Central.
- Kansas City Southern (KCS).
- Norfolk Southern (NS).
- The former Soo Line (800), owned by Canadian
- Union Pacific (UP).
Class I railroads are those with operating revenue of at least
$272 million in 2002. Class I carriers comprise only 1 percent of
the number of U.S. freight railroads, but they account for 70 percent
of the industry's mileage operated, 89 percent of its employees,
and 92 percent of its freight revenue. Class I carriers typically
operate in many different states and concentrate largely (though
not exclusively) on long-haul, high-density intercity traffic lanes.
There are seven Class I railroads <note 1 see below> ranging
in size from just over 3,000 to more than 33,000 miles operated
and from 2,600 to more than 46,000 employees.
Regional railroads are linehaul railroads with at least 350 route
miles and/or revenue of between $40 million and the Class I threshold.
There were 31 regional railroads in 2002. Regional railroads typically
operate 400 to 650 miles of road serving a region located in two
to four states. Most regional railroads employ between 75 and
500 workers, although four have more than 600 employees.
of American Railroads
Local linehaul carriers operate less than 350 miles and earn less
than $40 million per year. In 2002, there were 309 local linehaul
carriers. They generally perform point-to-point service over short
distances. Most operate less than 50 miles of road (more than 20
percent operate 15 or fewer miles) and serve a single state.
Switching and terminal (S&T) carriers are railroads, regardless
of revenue, that primarily provide switching and/or terminal services.
Rather than point-to-point transportation, they perform pick up
and delivery services within a specified area for one or more connecting
linehaul carriers, often in exchange for a flat per-car fee. In
some cases, S&T carriers funnel traffic between linehaul railroads.
In 2002, there were 205 S&T carriers. The largest S&T carriers
handle hundreds of thousands of carloads per year and earn tens
of millions of dollars in revenue.
In addition, the two major Canadian freight railroads Canadian
National Railway and Canadian Pacific Railway - each have extensive
U.S. freight railroads employ approximately 177,000 people, the
vast majority of whom are unionized. With average total compensation
in 2002 of more than $80,000, freight railroad employees are among
the nation's most-highly compensated workers.
By any measure of capital intensity, freight railroads are at
or near the top among all major U.S. industries. From 1980 through
2003, Class I railroads spent more than $320 billion approximately
44 percent of their operating revenue - on capital expenditures
and maintenance expenses related to infrastructure and equipment.
Non-Class I carriers spent billions of dollars more. These massive
expenditures help ensure that railroads have the capability to
offer high quality, safe, and cost-effective service to meet the
freight transportation needs of our nation.
||U.S. Freight Railroad Traffic
Data are for 2001
Source: Eno Transportation Foundation
Measured in ton-miles (the movement of one ton of freight one mile),
railroads move 42 percent of intercity freight, more than any other
mode of transportation. The rail share of intercity ton-miles has
been trending slightly upward over the past 10 to 15 years, after
falling steadily for decades. In part because railroads' rates are
so low compared to their competitors, their 42 percent of ton-mile
traffic generates less than 10 percent of intercity freight revenues.
Railroads' share of intercity freight revenue has been trending
down for decades, a reflection of the intensity of the competition
for intercity freight transportation in the United States and of
the significant rate reductions railroads have passed through to
Coal is the most important single commodity carried by rail. In
2002, it accounted for 44 percent of tonnage and 21 percent of revenue
for Class I railroads. The vast majority of coal in the United States
is used to generate electricity at coal-fired power plants. Coal
accounts for half of all U.S. electricity generation, far more than
any other fuel source, and railroads handle approximately two-thirds
of all U.S. coal shipments.
Other major commodities carried by rail include chemicals, including
massive amounts of industrial chemicals, plastic resins, and fertilizers;
grain and other agricultural products; non- metallic minerals such
as phosphate rock, sand, and crushed stone and gravel; food and
food products; steel and other primary metal products; forest products,
including lumber, paper, and pulp; motor vehicles and motor vehicle
parts; and waste and scrap materials, including scrap iron and scrap
Source: Association of American Railroads
||Over the past ten
years, intermodal traffic - the movement of truck trailers or containers
by rail and at least one other mode of transportation, usually
trucks has been the fastest growing rail traffic segment. Intermodal
combines the door-to- door convenience of trucks with the long-haul
economy of railroads.
Rail intermodal traffic has more than tripled in
just over 20 years, rising from 3.1 million trailers and containers
in 1980 to nearly 10 million units in 2003. Intermodal today accounts
for about 22 percent of rail revenue. In 2003, for the first time
ever, intermodal surpassed coal in terms of revenue for U.S. Class
Source: Association of American Railroads, "Railroad Facts".
Rail intermodal transports a huge range of goods
- everything from bicycles to automotive parts, lawn mowers to
glassware, greeting cards to bottled water, and toys to computers.
As manufacturing has become more global and as supply chains have
become longer and more complex, intermodal has come to play a
critical role in making supply chains far more efficient for retailers
and others. The efficiency of intermodal - and of freight railroading
in general - provides our nation with a huge competitive advantage
in the global economy.
||The Public Benefits of Freight Railroads
||In addition to cost
competitiveness and efficiency, freight railroads offer huge public
First, they have major advantages in energy efficiency over other
modes. On average, railroads are three times more fuel efficient
than trucks, and railroad fuel efficiency is improving all the time.
In 1980, U.S. railroads moved a ton of freight an average of 235
miles per gallon of fuel. In 2002, the comparable figure was 404
miles, a 72 percent increase.
Second, railroads are environmentally friendly. The U.S. Environmental
Protection Agency (EPA) estimates that for every ton-mile, a typical
truck emits roughly three times more nitrogen oxides and particulates
than a locomotive. Other studies suggest trucks emit six to 12 times
more pollutants per ton-mile than do railroads, depending on the
pollutant measured. Railroads also have a clear advantage in terms
of greenhouse gas emissions. According to the EPA, railroads account
for just 9 percent of total transportation-related NOx emissions
and 4 percent of transportation-related particulate emissions, even
though they account for 42 percent of the nation's intercity freight
Source: Association of American Railroads
Third, freight railroads significantly alleviate highway congestion.
A single intermodal train takes up to 280 trucks (equivalent to
more than 1,100 cars) off our highways; a train carrying other types
of freight takes up to 500 trucks off our highways. Overcrowded
highways act as an "inefficiency tax" on our economy,
seriously constraining economic growth. Freight railroads help relieve
this restriction by reducing gridlock, enhancing mobility, and reducing
the pressure to build costly new highways.
Fourth, railroads have major safety advantages over other modes.
For example, railroads are the safest way to transport hazardous
materials. Railroads and trucks carry roughly equal hazmat ton-mileage,
but trucks have nearly 16 times more hazmat releases than railroads.
||The Relationship of Passenger Rail to Freight Rail
in the United States
||Prior to Amtrak's
creation by the Rail Passenger Service Act of 1970, intercity passenger
rail service in the United States was provided by the same companies
that provided freight service. When Amtrak was formed, in return for
government permission to exit the passenger rail business (and avoid
the hundreds of millions of dollars in annual losses from passenger
operations they were forced to incur), freight railroads donated passenger
equipment to Amtrak and helped it get started with a capital infusion
of some $200 million (approximately $760 million in today's dollars).
Today, Amtrak is the sole intercity U.S. passenger rail carrier in
the continental United States.
The vast majority of the 22,000 or so miles over which Amtrak operates
are actually owned by freight railroads. (Amtrak owns approximately
750 miles of railroad, primarily from Boston to Washington, D.C.)
By law, freight railroads must grant Amtrak access to their track
upon request and give priority status to Amtrak trains over other
customers. Amtrak pays fees to freight railroads to cover the incremental
costs of Amtrak's use of freight railroad tracks.
Commuter and light rail passenger service is offered in a couple
of dozen cities throughout the United States. Many commuter rail
operators own all or part of the railroad right-of-way (sometimes
purchased from freight railroads) on which they operate. Other commuter
and light rail systems operate primarily or exclusively over tracks
owned by freight railroads. Moreover, to avoid the time and expense
of new rights-of-way acquisition, the vast majority of proposed
new commuter operations and existing commuter passenger operators
that want to extend their operations typically advocate using freight
For more information
please see Freight
Railroad Background from the Federal
Association of American
Adapted from Association of American Railroads, July 2004, Overview
of U.S. Freight Railroads.