Assignment for Class 1 Railways

Assignment #2

The US and Canadian railroad industry is dominated by the seven “class I” railroads. These seven “class I” railroads were formed as a result of consolidation in 1980s and 1990s.

These are discussed as per their revenues from highest to lowest over the last decade.

1. Union Pacific – it is formed in 1862 to build the eastern end of the historic Iowa to California tarns-continental railroad. It is the largest route network out of all the seven class I. It basically haul containers from west coast ports, coal from Wyoming’s Powder River basin and transporting mid-western grain and other bulk products. Its operating income over the last decade is $17 billion.

1. The Burlington Northern and Santa Fe (BNSF) – It is a rival with Union pacific for operating the highly efficient railroad in the industry. The reason for it being well-known is that it is owned by Berkshire Hathaway, Warren Buffett’s investment vehicle which bought it in 2009. It is second to Union pacific in terms of revenue over the last decade that is $16.8 billion.

1. CSX – CSX, operator of the largest railroad network on the east of Mississippi, depends a lot on the region’s industrial base for the traffic. The company divided Conrail, the formerly government owned railroad company, with Norfolk Southern in the merger of the year 1997. Its revenue registered is $10.6 billion.

1. Norfolk Southern – despite getting the smaller network of east of Mississippi, Norfolk southern is one of the most efficient railroads. It handles the coal produced in the areas of Appalachians, Kentucky and Pennsylvania. It has the coal facility point at Lamberts Point in Portsmouth in Virginia which focuses on the export of the coal to different parts. Its revenue is $9.5bn as per the reports registered in the last decade.

1. Canadian National – it has its substantial network in US and it further connects Vancouver and Calgary to the eastern Canadian population centers. The revenue generated through this railroad network is $8.38 billion.

1. Canadian Pacific – Canadian Pacific runs parallel to Canadian National but has fewer profits generated as compared to its rivals. However it is seen that it is gradually improving over the last few years. It only generated $5.05 billion which is less compared to Canadian National which operates parallel to it.

1. Kansas City Southern – Smallest of the US and Canadian Class I, it markets itself as “the Nafta railroad”. The reason being that its major routes run from north to south, connecting Canada and Mexico. It also has the extensive operations in Mexico and operates the Panama Canal railway in Panama. Its revenue is less in comparison with all other six Class I railroads.

References

www.ft.com 

Financial Times article