What is the Class 1 Railroad?
A class 1 railroad is a freight railroad class used to haul products through long distances with minimum stoppages. The minimum yearly operating revenue for a class 1 railroad should be more than $1 million, which is approximately ₱5,51,35,000 or ฿3,46,93,000 in the Philippines and Thailand, respectively. A class 1 railroad is primarily used to reduce transit time.
Significance of Class 1 Railroad in an E-commerce Shipping and Delivery
Class 1 railroads are categorized based on the operating revenue in different countries. These railroads provide minimum transit time and maximum reach.
- More coverage: A class 1 railroad spans across an entire country due to its whopping operating revenue. Therefore, sellers can enjoy maximum coverage in terms of shipping, as zones in a specific country are serviceable and densely connected.
- Minimum transit time: Rail transit is considered the fastest road transportation mode. However, there are seven classes of railroads that offer different transit times. A class 1 railroad, compared to its immediate siblings, has the least number of stops during a journey, meaning a lower transit time.
Prerequisites of Class 1 Railroad and How It Works
Class 1 railroads are required to surpass a said minimum budget. The cap requirement varies from one country to another. The minimum spend requirement for some countries have been listed below.
- Philippines: A yearly minimum operating revenue of ₱5,51,35,000 is required.
- Thailand: A minimum annual operating revenue of ฿3,46,93,000 is needed.
- Australia: The yearly operating revenue should exceed AUD $14, 98,228.
The globally accepted minimum operating revenue is USD $ 1 million. One can convert the mentioned amount into any country’s currencies as required.
Use Case with Class 1 Railroad
Seller A and seller B in Phuket received an order each to ship jeans and a t-shirt, respectively. The same seller in Bangkok fulfilled both orders. However, seller A opted for a class 1 railroad for the middle mile, while B chose a class 2 railroad for the same. As a result, the buyer received the jeans from seller A a day before the t-shirt from seller B arrived.
