Shortline Railroad Operation in the US - Industry Market Research Report

Shortline Railroad Operation in the US - Industry Market Research Report

  • March 2021 •
  • 39 pages •
  • Report ID: 5103871 •
  • Format: PDF
Chugging along: Revenue growth is expected to continue as industrial production continues to rise

Abstract

Shortline Railroad Operation

The Shortline Railroad Operation industry exhibits a medium level of market share concentration, with two major players, Geneese and Wyoming Inc. and Watco Companies LLC., dominating the industry. Industry concentration has remained steady in recent years, with mergers and acquisitions occurring simultaneously with the opening of new rail lines. Industry services include received, forwarded, bridged and local services, which are segmented based on switching and terminal and local line-haul services.

Ownership structure explained

• Genesee and Wyoming Inc. operates in the industry through eight of the total 11 business segments or regions, including Northeast, Ohio Velley, Midwest, Central, Southern, Mountain West, Rail Link and Pacific.

• Watco Companines LLC is the owner of Watco Transportation Services LLC, the largest privately held shortline railroad company in the United States.

Consolidation secures larger market share

• The industry regularly engages in mergers and acquisitions, such as Genesee and Wyoming Inc. acquiring the Providence and Worcester Railroad Company in 2016. As a result, market concentration is expected to increase over the next five years.

Companies compete on geographical footprints
• Industry operators typically compete on the basis of travel time, fuel consumption, safety, regulations and destination. Geographical footprints are one of the most important factors in the industry, creating independent and specialized zones that are more responsive to local demand.

Industry operators fall into two categories: local railroads and switching and terminal railroads. Local railroads are line-haul railroads that generate less than $34.7 million in operating revenue. Switching and terminal railroads are those jointly owned by two parties to facilitate the transferring of cars between railroads. By conventional standards, all Class III railroads are called shortline railroad operators while Class II operators are referred to as regional railroads.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.
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