Determinants of profitability of US Class I Freight Railroads

Abstract

US Class I railroads have been operating profitably and carrying substantial market share of traffic, in spite of the inherent disadvantages of rail transport as well as highly developed road, water and air transport infrastructure. This paper examines the key initiatives that railroads have taken to reach this stage, as well as the factors which have enabled them to successfully deploy these initiatives. The paper then discusses the implications of these measures in terms of long term growth of the railroads and for the society.