Fallen flag

Fallen flag is the term for U.S., sometimes for Canadian railway companies that have disappeared through bankruptcy or merger.

Background

Since the 1950s, the number of U.S. railroad companies began to decline rapidly due to economic difficulties. Many companies have been bought out by larger companies or, as in the Santa Fe with companies of the same size combined ( in this case with the Burlington Northern Railroad to the BNSF ) Another number was liquidated because of the decline in transport volumes. Due to the " Staggers Act " of 1980, it was much easier the railway company to close or sell less profitable or parallel sections. Therefore it since the 80's saw the establishment of many so-called Short Line or Class 3 railroads (< $ 40 million in sales and less than 350 miles of track length, according to the rules of the AAR).

As part of further market positioning of the company, such small companies were taken over again by larger companies or went missing due to transport volumes bankruptcy. Thus, the number of traps Flags increases more and more.

The number of so-called "Class 1" railroads (now the railway companies with an annual turnover of more than 272 $ one million ) has been reduced from 193 in 1962 to 7 in 2004.