Class I, II & III Railroads Defined in 100 Words

Definition of Class I, II & III Railroads

Railroads are classified based on their annual operating revenues.

Class I Railroads

To fall under the railroad classes they must have tracking in the USA, which is why Canadian National and Canadian Pacific are Class I and Ferromex is not.

The class to which a carrier belongs is determined in accordance with the following revenue thresholds:

  • Class I – $ 447,621,226 or more.
    • Class I railroads are regulated by the Surface Transportation Board (STB).

  • Class II – Less than $ 447,621,226, but in excess of $ 35,809,698.
  • Class III – $ 35,809,698 or less.

The revenue thresholds are periodically updated to account for the impact of inflation.

The revenue numbers were last updated in 2017.

Class II Railroads

  • These railroads are also known as a “regional railroads.”

Class III Railroads

  • These railroads are also known as a “short line railroads.”

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