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Decline of the Class I Railroads

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Posted by Paul_D_North_Jr on Friday, February 6, 2015 4:28 PM

Boomer5
Currently researching the decline of the Class I Railroads since the 1950's and found this so far: 1950 127 Class I railroads in Operation 1960 102 1970 58 1980 15 1990 11 2000 7 The information for the 1980's seems low to me. As I recall in the early 80's there were around 35 or so Class I's with several roads falling out soon thereafter due to bankruptcies and mergers but by 1989 I find it hard to believe that there were only 15 Class I's remaining. Does anyone have any hard data on this topic?

Find either: 1) the ICC annual reports; 2) Railway Age annual statistics; and/ or 3) Poor's Railroad Manual statistics.

I trust you're researching the decline in the number of Class 1 railroads (a statistical definitional aberration), as opposed to their economic decline.  Because the latter just isn't happening, at least since sometime in the 1990's.  

Instead, one could hypothesize an inverse relationship there - that the reduced number of Class 1's led to better economic fortunes, or vice-versa.  While there's good support for that, I don't think it's the whole story, or even the most important part of it.  And any such thesis risks the fallacy of "post hoc, ergo prompter hoc" (if I remember it correctly, 'cause I'm no Latin scholar - corrections invited; for the rest of us, the analogy is the rooster who thinks he causes the sun to rise each morning . . . Smile, Wink & Grin ).

- Paul North. 

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Posted by tree68 on Friday, February 6, 2015 1:35 PM

carnej1
Keep in mind that there have been a fair number of regional railroads created in the last three decades that would have qualified as Class 1's by 1950's revenue/mileage standards....

And conversely, many of the Class 1's back in the day would be considered regionals today, simply based on how much track they ran, never mind revenue.

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Posted by DSchmitt on Friday, February 6, 2015 1:30 PM

Reason for reduction in number of Class 1 Raiiroads.

1) Change of Definition

From Wikipedia: 

 http://en.wikipedia.org/wiki/Railroad_classes   

"Classification history

The initial $1 million criterion for a Class I railroad was used until January 1, 1956, when the figure was increased to $3 million (equal to $26,023,256 today). In 1956, the ICC counted 113 Class I line-haul operating railroads (excluding "3 class I companies in systems") and 309 Class II railroads (excluding "3 class II companies in systems"). The Class III category was dropped in 1956 but reinstated in 1978. By 1963, the number of Class I railroads had dropped to 102; cutoffs were increased to $5 million by 1965 (equal to $37,418,163 today), to $10 million in 1976 (equal to $41,444,444 today), and to $50 million in 1978 (equal to $180,790,816 today), at which point only 41 railroads qualified as Class I.

In a special move in 1979, all switching and terminal railroads were re-designated Class III, including those with Class I or Class II revenues.

Class II and Class III designations are now rarely used outside the rail transport industry. The Association of American Railroads typically divides non–Class I companies into three categories:

From:   http://trn.trains.com/railroads/2006/06/class-1-railroads

"As of January 2006, a Class 1 railroad was defined as one that generates revenues of $289.4 million or more each year. Class 2 railroads are those with annual revenues between $20.5 million and $289.4 million. Class 3 railroads have earnings of less than $20.5 million."

2) Mergers, takeovers and sales

3) Abandonments

 

 

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Posted by carnej1 on Friday, February 6, 2015 11:19 AM

Boomer5
Currently researching the decline of the Class I Railroads since the 1950's and found this so far: 1950 127 Class I railroads in Operation 1960 102 1970 58 1980 15 1990 11 2000 7 The information for the 1980's seems low to me. As I recall in the early 80's there were around 35 or so Class I's with several roads falling out soon thereafter due to bankruptcies and mergers but by 1989 I find it hard to believe that there were only 15 Class I's remaining. Does anyone have any hard data on this topic?
 

Keep in mind that there have been a fair number of regional railroads created in the last three decades that would have qualified as Class 1's by 1950's revenue/mileage standards....

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Posted by BaltACD on Friday, February 6, 2015 10:14 AM

I suspect because the stat states 1980 - it doesn't mean 1989.

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Decline of the Class I Railroads
Posted by Boomer5 on Thursday, February 5, 2015 8:11 AM
Currently researching the decline of the Class I Railroads since the 1950's and found this so far: 1950 127 Class I railroads in Operation 1960 102 1970 58 1980 15 1990 11 2000 7 The information for the 1980's seems low to me. As I recall in the early 80's there were around 35 or so Class I's with several roads falling out soon thereafter due to bankruptcies and mergers but by 1989 I find it hard to believe that there were only 15 Class I's remaining. Does anyone have any hard data on this topic?

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