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Shortline Railroad Operation in the US Industry Data and Analysis
The expansion of shortline railroad operations is tightly linked to the overall health of the broader economy. Demand fluctuates in tandem with industrial output, trade values and consumer spending. E‑commerce’s growth also leads to more containerized freight volumes serving gateways. Energy price volatility tied to geopolitical conflicts has increased the relative attractiveness of rail versus trucking, even as moderated surcharges have limited full fuel cost recovery in some lanes. 2025 tariffs incentivized onshoring, but still reduced trade value growth, creating a mixed impact on volumes. The suspension of duty-free de minimis has shifted direct-to-consumer parcels toward consolidated, containerized imports, which favor inland rail ramps. Profit fell as input inflation outpaced service yield gains, with profit’s share of revenue moving from 15.4% in 2020 to 10.9% in 2025. For 2025, revenue is $3.6 billion, representing 0.1% growth and reaching a current five‑year CAGR of 7.1%.
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What's included in this industry analysis
IBISWorld's research coverage on the Shortline Railroad Operation industry in the United States includes market sizing, forecasting, data and analysis from 2015-2030. The most recent publication was released November 2025.
About this industry
What's this industry report about?
The Shortline Railroad Operation industry in the United States operates under the NAICS industry code OD5029. Railroad 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 jointly owned by two parties to facilitate the transfer 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. Related terms covered in the Shortline Railroad Operation industry in the United States include waybill, shortline railroad, class i railroad, class ii railroad, class iii railroad and switching.
What's included in this industry?
Products and services covered in Shortline Railroad Operation industry in the United States include Received services, Forwarded services and Bridged services.
What companies are included in this industry?
Companies covered in the Shortline Railroad Operation industry in the United States include Genesee & Wyoming Inc. and Watco Companies, L.L.C.
Performance
What's included in the Performance chapter?
The Performance chapter covers detailed analysis, datasets, detailed current performance, sources of volatility and an outlook with forecasts for the Shortline Railroad Operation industry in the United States.
Questions answered in this chapter include what's driving current industry performance, what influences industry volatility, how do successful businesses overcome volatility, what's driving the industry outlook. This analysis is supported with data and statistics on industry revenues, costs, profits, businesses and employees.
Products & Markets
What's included in the Products and Markets chapter?
The Products and Markets chapter covers detailed products and service segmentation and analysis of major markets for the for the Shortline Railroad Operation industry in the United States.
Questions answered in this chapter include how are the industry's products and services performing, what are innovations in industry products and services, what products or services do successful businesses offer and what's influencing demand from the industry's markets. This includes data and statistics on industry revenues by product and service segmentation and major markets.
Geographic Breakdown
What's included in the Geographic Breakdown chapter?
The Geographic Breakdown chapter covers detailed analysis and datasets on regional performance of the Shortline Railroad Operation industry in the United States.
Questions answered in this chapter include where are industry businesses located and how do businesses use location to their advantage. This includes data and statistics on industry revenues by location.
Competitive Forces
What's included in the Competitive Forces chapter?
The Competitive Forces chapter covers the concentration, barriers to entry and supplier and buyer profiles in the Shortline Railroad Operation industry in the United States. This includes data and statistics on industry market share concentration, barriers to entry, substitute products and buyer & supplier power.
Questions answered in this chapter include what impacts the industry's market share concentration, how do successful businesses handle concentration, what challenges do potential industry entrants face, how can potential entrants overcome barriers to entry, what are substitutes for industry services, how do successful businesses compete with substitutes and what power do buyers and suppliers have over the industry and how do successful businesses manage buyer & supplier power.
Companies
What's included in the Companies chapter?
The Companies chapter covers Key Takeaways, Market Share and Companies in the Shortline Railroad Operation industry in the United States. This includes data and analysis on companies operating in the industry that hold a market share greater than 5%.
Questions answered in this chapter include what companies have a meaningful market share and how each company is performing.
External Environment
What's included in the External Environment chapter?
The External Environment chapter covers Key Takeaways, External Drivers, Regulation & Policy and Assistance in the Shortline Railroad Operation industry in the United States. This includes data and statistics on factors impacting industry revenue such as economic indicators, regulation, policy and assistance programs.
Questions answered in this chapter include what demographic and macroeconomic factors impact the industry, what regulations impact the industry, what assistance is available to this industry.
Financial Benchmarks
What's included in the Financial Benchmarks chapter?
The Financial Benchmarks chapter covers Key Takeaways, Cost Structure, Financial Ratios, Valuation Multiples and Key Ratios in the Shortline Railroad Operation industry in the United States. This includes financial data and statistics on industry performance including key cost inputs, profitability, key financial ratios and enterprise value multiples.
Questions answered in this chapter include what trends impact industry costs and how financial ratios have changed overtime.
Industry Data
What's included in the Industry Data chapter?
The Industry Data chapter includes 10 years of historical data with 5 years of forecast data covering statistics like revenue, industry value add, establishments, enterprises, employment and wages in the Shortline Railroad Operation industry in the United States.
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Frequently Asked Questions
What is the market size of the Shortline Railroad Operation industry in the United States in 2026?
The market size of the Shortline Railroad Operation industry in the United States is $3.6bn in 2026.
How many businesses are there in the Shortline Railroad Operation industry in the United States in 2025?
There are 629 businesses in the Shortline Railroad Operation industry in the United States, which has grown at a CAGR of 1.8 % between 2020 and 2025.
How may import tariffs affect the Shortline Railroad Operation industry in the United States?
The Shortline Railroad Operation industry in the United States is unlikely to be materially impacted by import tariffs with imports accounting for a low share of industry revenue.
How may export tariffs affect the Shortline Railroad Operation industry in the United States?
The Shortline Railroad Operation industry in the United States is unlikely to be materially impacted by export tariffs with exports accounting for a low share of industry revenue.
Has the Shortline Railroad Operation industry in the United States grown or declined over the past 5 years?
The market size of the Shortline Railroad Operation industry in the United States has been growing at a CAGR of 7.1 % between 2020 and 2025.
What is the forecast growth of the Shortline Railroad Operation industry in the United States over the next 5 years?
Over the next five years, the Shortline Railroad Operation industry in the United States is expected to grow.
What are the biggest companies in the Shortline Railroad Operation industry in the United States?
The biggest companies operating in the Shortline Railroad Operation industry in the United States are Genesee & Wyoming Inc. and Watco Companies, L.L.C.
What does the Shortline Railroad Operation industry in the United States include?
Performing forwarding services using shortline railroads and Performing receiving services using shortline railroads are part of the Shortline Railroad Operation industry in the United States.
Which companies have the highest market share in the Shortline Railroad Operation industry in the United States?
The company holding the most market share in the Shortline Railroad Operation industry in the United States is Genesee & Wyoming Inc..
How competitive is the Shortline Railroad Operation industry in the United States?
The level of competition is moderate and steady in the Shortline Railroad Operation industry in the United States.
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