Companies in this industry transport freight and passengers by rail. Major companies include Amtrak, Burlington Northern Santa Fe, CSX, Norfolk Southern, and Union Pacific (all based in the US), along with Deutsche Bahn (Germany), East Japan Railway (Japan), RZD (Russia), and SNCF (France).
Worldwide, the railroad industry encompasses about 1 million miles of installed rail track and more than 6 million units of rolling stock, according to UNIFE, a trade association for the European railroad equipment manufacturing industry. The Asia/Pacific region accounts for the bulk of recently added track, primarily due to the construction of new routes in China and India. Approximately 40% of the world's track is electrified, mostly in Western Europe and Asia/Pacific, leaving considerable opportunity for further track electrification in other markets.
The US railroad industry includes about 600 freight railroads with combined annual revenue of about $74 billion, according to the Association of American Railroads. Commuter, switching and terminal, and tourist railroads are not included in the industry.
Demand is driven by sales of bulk commodities and other items best transported by rail. The profitability of individual companies depends on operating efficiently and controlling maintenance expenses. Large companies have advantages in owning systems that connect numerous markets and enable them to serve national customers. Small companies can compete effectively by serving local markets. The US industry is highly concentrated: the top seven companies account for the majority of industry revenue.
The US government classifies freight railroads into three classes, based on operating revenue. Seven line-haul Class I railroads -- BNSF Railway, CSX Transportation, Kansas City Southern, Norfolk Southern, Union Pacific, Canadian National Railway, and Canadian Pacific Railway -- operate in the US, according to the Surface Transportation Board. Class I carriers account for about 70% of US freight rail mileage, 90% of employees, and nearly 95% of revenue. Class II and Class III short-line and regional railroads account for about 30% of US freight rail mileage and 10% of employees. These railroads, of which there are about 550, often feed traffic to Class I railroads and receive traffic from Class I railroads for final delivery.
Freight railroads compete mainly with barges, pipelines, and trucks to transport commodities, and with trucks to transport finished goods. Passenger train services typically compete with airlines, bus services, and automobiles.
Products, Operations & Technology
Major services are the transport of commodities, including coal, grain, crushed rock, and chemicals; containers of consumer goods; automobiles; and passengers.
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms