U.S. Class I rail's operating revenues 1990-2020

In 2020, the U.S. Class I railroads generated total operating revenue of around 66 billion U.S. dollars, a drop in revenue of some 11.1 percent year-over-year amid the COVID-19 pandemic. Operating income increased steadily between 2016 and 2019.

COVID-19 challenges the industry

A Class I railroad was a freight railroad with a 2021 annual operating revenue that surpasses roughly 900 million U.S. dollars. Altogether, seven Class I railroads owned and operated the majority of the railroads in North America, contributing to around 94 percent of the overall revenue generated by freight rail. Directly affected by the Covid-19 pandemic, Canadian Pacific Railway, CSX Transportation, Union Pacific, Canadian National, and Kansas City Southern reported significant drops in revenue of up to 24 percent for 2020 compared with 2019. Despite this setback, demand for freight rail is set to grow over the next two decades.

2021 marked another shift in the market as Kansas City Southern and Canadian Pacific Railroad completed their merger. Freight railroads also had started to recover from the negative impacts of the COVID-19 pandemic. With around 20.2 billion U.S. dollars in freight revenue, Union Pacific’s 2021 economic performance returned to pre-pandemic levels. Similar growth was observable across other Class I railroads.

Fostering cross-border trade

The rail networks between Canada, the United States, and Mexico are intricately linked to facilitate trade across the region. Class I railroads greatly benefit from this extensive rail network to haul commodities across borders. Propelled by the mining industry and coal consumption in the U.S., coal was the leading commodity carried across North America in 2021. Non-railway vehicles were the largest commodity traded by rail between the three countries, with the U.S.-Canada trade of such goods worth just under 33.6 billion U.S. dollars in 2020. However, motor vehicles and parts ranked seventh in the commodities by carloads hauled by North American railways.