Railroad Definitions

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 $489,935,956
Class II Railroads:  Annual Operating Revenue of less than $489,935,956 and more than $39,194,876
Class III Railroads:  Annual Operating Revenue of less than $39,194,876

*Threshold figures are adjusted annually for inflation using the base year of 1991. The figures above are based off of 2018 numbers (the most recent year for which deflator factors have been calculated). 

AAR Railroad Classifications

Class I Railroad - The AAR matches the STB's classification threshold for Class I railroads (see above)

Regional Railroad - 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 Railroad - 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.