Railroads may be defined two ways, by U. S. Surface Transportation Board (STB) definition or by Association of American Railroad (AAR) Classifications.
STB Railroad Classifications*
Class I Railroads
: Annual Operating Revenue in excess of $447,621,226
Class II Railroads
: Annual Operating Revenue of less than $447,621,226 and more than $35,809,698
Class III Railroads
: Annual Operating Revenue of less than $35,809,698.
*These threshold figures are adjusted annually for inflation using the base year of 1991.
AAR Railroad Classifications
Class I Railroad
- The AAR matches the STB's classification threshold for Class I railroads (see above)
- Regional railroads are line-haul railroads below the Class I revenue threshold that operate at least 350 miles of road and earn at least $20 million in revenue, or line-haul railroads that earn revenue between $40 million and the Class I revenue threshold regardless of mileage.
- Local railroads include freight railroads which are not Class I or Regional. The Local railroad category can be further subdivided into local line haul carriers and switching & terminal carriers. This latter category is composed of railroads which primarily provide switching and/or terminal services for other railroads. S&T carriers usually have a relatively large number of employees per mile of track.