What is a railroad?
First of all...
A railroad consists of
3 main ingredients:
Did you know...
Most railroad safety standards and operations are regulated by the Federal Railroad Administration or FRA (see below). Railroads that are considered common carriers achieve that status through the authority of the Surface Transportation Board or STB (see below). Having the common carrier status is important for various reasons but primarily indicates that railroad is essential to the economy by ensuring all shippers have access to rail service, provides public trust, and promotes competition throughout.
Keep in mind however, there are also railroads that exist that are not considered common carriers and only serve insular or specific purposes that do not connect to the general rail system.
Learn more below!
The Railroad Network
There are over 630+ railroads in the United States. Railroads are classified by 3 main categories (see below). Railroads vary in size, revenue, customer base and location.
Railroads are 90% privately owned and
operated entities.
In general, railroads are connected to one another at specific points called "interchanges." When a railroad needs to gain access to a customer on another railroad's property and runs its locomotives, equipment and crews over another railroad's tracks, this unique legal contractual agreement is called "Trackage rights." Generally, the "host" railroad is the railroad that owns the tracks being utilized. When a railroad hands off their locomotives and cars to another railroad to handle over their property to its destination or pass-through point, this unique agreement is called "haulage" rights. These trains would then be operated by the host railroad's people for specific goals set out in the agreement.
To better understand the breakdowns of how each railroad is categorized, see below!
Class Is
STB: Class I Railroads: Annual Operating Revenue in excess of $1,053,709,560
AAR: Class I Railroad - The AAR matches the STB's classification threshold for Class I railroads (see above)
Class IIs
STB: Class II Railroads: Annual Operating Revenue of less than $1,053,709,560 and more than $47,299,851
AAR: 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.
Class IIIs
STB: Class III Railroads: Annual Operating Revenue of less than $47,299,851
AAR: 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.
Switching or Industry
STB: No category
AAR: Possibly considered a 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.
TYPES OF FREIGHT RAILROADS
Railroads may be defined two ways,
by U. S. Surface Transportation Board (STB) definition or
by Association of American Railroad (AAR) Classifications.
Auxiliary Rail Network
Railroads of all shapes and sizes need help with their growth, maintenance, and strategic vision. This means railroads proper need contractors, suppliers, manufacturers, consultants, and collaboration with their shippers to serve a safe and efficient network. This combined network comprised of all the contractors, suppliers, rail shippers, consultants, and supporting entities that further sprawl out the opportunities within the rail industry.
Learn more below!
Contractors
Welcome to the world of contractors. Contractors are just what the name implies, contracted to do work for a company. Contractors can vary in their specialty or offer general and broad services. Some contractors assist railroads, some assist other contractors, some are used more as a consultancy of expertise. Examples of contractors would be a specific recruiting firm, a snow removal for rail facilities company, a construction company, an engineering firm, a marketing firm, a social media expert. Contractors vary with skills and expertise and you will find many contractors supporting and aiding the daily work and more long term strategic plans for all companies in the rail industry overall. Contractors are usually bound with contracts or master service agreements to complete specific tasks, but can also gain new projects through bid proposals.
Suppliers
Welcome to the realm of suppliers! Suppliers are the companies within the rail industry that supply a specific product or service for another company. A supplier example would be the rail manufacturers that take steel and mold it into rail. Another example of a supplier would be a company that builds rail cars, locomotives, to companies that produce tie plates and other widgets required for assembly. Many of these rely on bids for yearly projects, some also may be sole sourced. Suppliers are nationwide as well as internationally based.
Consultants
Welcome to the legends of consultancy! Consultants in the rail industry consist of various expertise. From social media, marketing, public relations, lobbyist, to bridge design engineers, environmental experts and beyond, there are a wide range of consultants available in the rail industry for almost every niche and department. Consultants are usually paid for by the hour and will operate under a Master Service Agreement, although some may also have the ability to apply or bid for proposals should their scope and business entity have the right certifications or requirements to do so.
Federal Agencies Supporting Rail
From rate negotiations, to safety operations, to training about hazardous materials movements, there are various agencies that support, monitor, and provide assistance to railroad and rail related companies.
Learn more below!
Surface Transportation Board (STB)
The Surface Transportation Board is the federal agency that is charged with the economic regulation of various modes of surface transportation, primarily freight rail.
The agency has jurisdiction over railroad rate, practice, and service issues and rail restructuring transactions, including mergers, line sales, line construction, and line abandonments. The STB also has jurisdiction over certain passenger rail matters, the intercity bus industry, non-energy pipelines, household goods carriers’ tariffs, and rate regulation of non-contiguous domestic water transportation (marine freight shipping involving the mainland United States, Hawaii, Alaska, Puerto Rico, and other U.S. territories and possessions).
Created on January 1, 1996 by the ICC Termination Act of 1995, the Board is the successor to the former Interstate Commerce Commission (1887-1995) and was administratively aligned with the U.S. Department of Transportation from 1996 to mid-December 2015. The STB Reauthorization Act of 2015 established the STB as a wholly independent federal agency on December 18, 2015.
The STB consists of five Board Members, one of which serves as the Chairman. The STB staff is divided into five offices, in addition to an Equal Employment Opportunity office.
Federal Railroad Administration (FRA)
US Department of Transportation
The Federal Railroad Administration (FRA) was created by the Department of Transportation Act of 1966. It is one of ten agencies within the U.S. Department of Transportation concerned with intermodal transportation.
Mission:
The Federal Railroad Administration’s mission is to enable the safe, reliable, and efficient movement of people and goods for a strong America, now and in the future.
(PHMSA)
US Department of Transportation
The Pipeline and Hazardous Materials Safety Administration (PHMSA) operates in a dynamic and challenging environment. The scope and complexity of our safety mission will continue to grow, requiring that we fundamentally rethink how we will use data, information, and technology to achieve our safety goals.
In this context, PHMSA's leadership team has updated the agency's strategic framework. As part of this work, we have developed bold new vision and mission statements that better reflect our focus on innovation, and how essential PHMSA's safety mission is to the daily lives of Americans - allowing for the safe transportation of energy that heats our homes and powers our mobile devices.
Mission
PHMSA's mission is to protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives. To do this, the agency establishes national policy, sets and enforces standards, educates, and conducts research to prevent incidents. We also prepare the public and first responders to reduce consequences if an incident does occur.
Associations that support the Railroading industry
Associations are (typically) non-profit organizations that collaborate through a membership style structure towards a joint focus.
Learn more below!
