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Aswitching and terminal railroad is a freightrailroad company whose primary purpose is to perform local switching services or to own and operate aterminal facility.
Switching is a type of operation done within the limits of ayard. It generally consists of making up and breaking up trains, storing and classifying cars, serving industries within yard limits, and other related purposes. Those movements are made at slow speed under special yard rules.[1]
A terminal facility may include aunionfreight station,train ferry,car float, orbridge. Its purpose is to connect larger carriers toother modes of transport or other carriers.[1]
Those companies may bejointly owned by several major carriers, as are theKansas City Terminal Railway,Belt Railway of Chicago,Terminal Railroad Association of St. Louis,Galveston Railroad, andConrail Shared Assets Operations.
TheInternal Revenue Service providestax incentives for this type of company,[2] which may also be created when a larger railroad abandons an unprofitable line, and ashortline railroad later takes over operations to connect shippers to the larger company.