From one end of the country to the other, the U.S. has the largest freight rail system in the world. Together, the U.S. steel highways form a well-organized system of 140,000 miles (more than 225,000 km) that earned about $80 billion in revenue in 2019. U.S. railroads are divided into 7 large Class I (first) railroads and more than 600 local Class II and III carriers. Class depends on the level of gross revenue.
U.S. freight railroads are almost entirely privately owned and, unlike trucks and river barges, operate on the infrastructure they own, build, maintain and pay for themselves. Working with tens of thousands of rail customers, they generate economic growth, support job creation, reduce highway congestion and make cleaner air.
Class I railroads include companies with at least $505 million in annual revenues. That’s the threshold set in 2019 by The Surface Transportation Board.
There are seven major players on the market: BNSF Railway, Canadian National Railway, Canadian Pacific Railway, CSX Transportation, Kansas City Southern Railway, Norfolk Southern Railway and Union Pacific Railroad.
They accounted for about 68 percent of freight railroad mileage, 88 percent of employees, and 94 percent of revenue in 2019.
Each Class I railroad operates in several states over thousands of miles of track. And some of them operate not only within the United States, but also in neighboring countries, Canada and Mexico. They generate a total of 2.7 trillion tons of freight work per year.
Class I railroads employ about 135,000 railroad workers, who are among America’s highest-paid workers. In 2019, the average Class I railroad worker earned $94,400. Including fringe benefits, the annual compensation was $132,900.
Railroad workers are covered by a retirement system that is funded by the railroads and their employees. In fiscal year 2019, about 534,000 beneficiaries received pensions and survivor benefits totaling $13 billion.
At the same time, U.S. railroads are at the forefront of the nation in terms of capital investment in development.
For example, in fiscal year 2017, $22 billion was invested in developing, maintaining and modernizing the network. According to Towson University’s Institute for Regional Economic Research, orders for railroads supported approximately 1.1 million jobs (nearly eight related industry jobs per railroad worker). The total economic impact was $219 billion.
Railroads move about 40 percent of U.S. freight in general. The range of freight is very broad, from coal and oil to groceries and automobiles.