Short line (railroad)

In the United States, railroads are designated as Class I, II, or III, according to size criteria first established by the Interstate Commerce Commission (ICC) in 1911, and now governed by the Surface Transportation Board.

There are six US Class I freight railroad companies. Canada has two Class I freight railroads, both of which have trackage in the US. Mexico has two Class I freight railroads, one with trackage in the US. In addition, the national passenger railroads in the US and Canada, Amtrak and Via Rail, are both Class I.

Initially, the ICC classed railroads by their annual gross revenue. Class I railroads had an annual operating revenue of at least $1 million, while Class III railroad incomes were under $100,000 per annum. All such corporations were subject to reporting requirements on a quarterly or annual schedule. If a railroad slipped below its class qualification threshold for a period, it was not necessarily demoted immediately. For instance, in 1925, the ICC reported 174 Class I railroads, 282 Class II railroads, and 348 Class III railroads.

Since dissolution of the ICC in 1996, the Surface Transportation Board (STB) has become responsible for defining criteria for each railroad class. The bounds are typically redefined every several years to adjust for inflation and other factors.

The initial $1 million criterion established in 1911 for a Class I railroad was used until January 1, 1956, when the figure was increased to $3 million (equal to $27,003,672 in 2017). In 1956, the ICC counted 113 Class I line-haul operating railroads (excluding "3 class I companies in systems") and 309 Class II railroads (excluding "3 class II companies in systems"). The Class III category was dropped in 1956 but reinstated in 1978. By 1963, the number of Class I railroads had dropped to 102; cutoffs were increased to $5 million by 1965 (equal to $38,827,878 in 2017), to $10 million in 1976 (equal to $43,005,848 in 2017), and to $50 million in 1978 (equal to $187,602,041 in 2017), at which point only 41 railroads qualified as Class I.

In a special move in 1979, all switching and terminal railroads were re-designated Class III, including those with Class I or Class II revenues.

Class II and Class III designations are now rarely used outside the rail transport industry. The Association of American Railroads typically divides non–Class I companies into three categories:

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