All aboard: Revenue growth will continue as industrial production continues to rise

The Shortline Railroad Operation industry's ties to the general economy were highlighted over the past five years, as the industry's fortunes rose along with major downstream markets. However, this does not mean that the industry has not undergone hardships. With the recent collapse of crude oil prices, and consequently diesel fuel prices, revenue from surcharges has fallen and weak signals from the industrial production index have only compounded these losses. Over the next five years, the industry will benefit from a continued rise in industrial production and international trade volumes. Moreover, the industry is projected to achieve slightly higher profitability, as capital expenditures made over the past five years bear fruit...read more.

Industry Statistics & Market Size
Revenue
$3bn
Annual Growth 11-16
2.8%
Forecast Growth 16-21
Profit
Employment
11,972
Businesses
577
Market Share of Companies
What Our Customers Say

Industry Threats & Opportunities

  • The industry will benefit from a continued rise in industrial production and international trade volumes
  • Federal tax credits allowed operators to maintain, upgrade and expand their rail networks
  • Industry profitability is expected to increase as capital upgrades increase productivity
  • Industry Report - Industry Key Buyers Chapter

    The Shortline Railroad Operation industry is moderately concentrated. The top three companies in the industry combine to make up about 58.1% of the total market. The industry regularly engages in merger and acquisition activity as seen with the merger of Genesee & Wyoming and RailAmerica. Likewise, concentration has increased over the past five years, with enterprises growing at a meager 0.1%. The high capital costs of establishing new railroads and the need for extensive operations to be proximate to a large number of consumer markets has limited the entry of new players into the market.Concentration is expected to increase over the next five years as well. The number of industry enterprises is expected to increase at an annualized rate of 1.1% to reach 542 by 2021. Mos...purchase to read more.

    Additional Insights for the Shortline Railroad Operation Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Shortline Railroad Operation Industry are

  • Automation reduces costs, particularly those associated with labor
  • Ability to effectively manage risk
  • Production of premium goods/services
  • IBISWorld analysts also discuss how external factors such as Demand from rail transportation and Industrial production index in the Shortline Railroad Operation industry impact industry performance..

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    What is the Shortline Railroad Operation Industry?

    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 & 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.

    Industry Products
  • Received services
  • Forwarded services
  • Bridged services
  • Local line-haul services
  • Industry Activities
  • Performing forwarding services using shortline railroads
  • Performing receiving services using shortline railroads
  • Performing local line-haul services using shortline railroads
  • Undertaking Rule 11 arrangements
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Demand from rail transportation
  • Industrial production index
  • External competition
  • Price of diesel
  • Total trade value

  • Current Performance
  • Saturated market
  • Industrial demand
  • Chart: Revenue Growth

  • Industry Outlook
  • Moving forward
  • Potential roadblocks to growth
  • Table: Shortline Railroad Operation Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Shortline Railroad Operation Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Agriculture, Forestry, Fishing and Hunting
  • Mining
  • Coal Mining
  • Manufacturing
  • Petrochemical Manufacturing
  • Car & Automobile Manufacturing
  • Rail Transportation
  • Coal & Natural Gas Power

  • Key Selling Industries
  • Petroleum Refining
  • Rail Maintenance Services
  • Train, Subway & Transit Car Manufacturing

  • Products & Services
  • Received services
  • Forwarded services
  • Bridged services
  • Local line-haul services
  • Chart: Shortline Railroad Operation Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Class I rail operators
  • Food, consumer goods and agricultural market
  • Industrial goods market
  • Coal market
  • Other
  • Chart: Major Market Segmentation for the Shortline Railroad Operation Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitWagesPurchasesRent and utilitiesDepreciationOther costs
  • Chart: Cost Structure Benchmarking – Sector vs Shortline Railroad Operation

  • Basis of Competition
  • Internal Competition
  • External Competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Shortline Railroad Operation Industry

  • Industry Globalization
    Genesee & WyomingWatco Companies LLC
  • Table: Genesee & Wyoming - financial performance
  • Table: Watco Companies LLC - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Shortline Railroad Operation Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Shortline Railroad Operation Industry
    Includes:
  • Industry Revenue (2007-2021)
  • Industry Gross Product (2007-2021)
  • Establishments (2007-2021)
  • Businesses (2007-2021)
  • Employment (2007-2021)
  • Wages (2007-2021)
  • Industrial production index (2007-2021)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Class I Railroad
  • Carriers with annual carrier operating revenue of $452.7 million or more.
  • Class Ii Railroad
  • Carriers with annual carrier operating revenue of less than $452.7 million but more than $34.7 million.
  • Class Iii Railroad
  • Carriers with annual carrier operating revenue of $34.7 million or less. These are the formal definition of shortline railroads.
  • Shortline Railroad
  • Carriers with annual carrier operating revenue of less than $34.7 million, also called terminal or switching railroads.
  • Switching
  • The process of moving rolling stock from one track to another.
  • Waybill
  • A receipt issued that shows the customer that the goods have been received and have been passed on for freight by railway.
  • Why buy this report?

    IBISWorld’s Industry Market Report on Shortline Railroad Operation is a comprehensive guide to market size and growth prospects. Ensure due diligence in your research with our strategic analysis of the factors influencing companies, including new product developments; economic, lifestyle and demographic influences; distribution and supply chain factors; and pricing issues.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Shortline Railroad Operation:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Shortline Railroad Operation market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Shortline Railroad Operation, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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