Falling flag
Fallen flag is the term used for US and occasionally Canadian railroad companies that have disappeared through bankruptcy or merger .
background
Since the 1950s, the number of US railroad companies began to decline rapidly due to economic difficulties. Many companies were bought up by larger companies or, as with the Santa Fe, merged with companies of the same size (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 made much easier for the railway companies to close or sell less profitable or parallel sections of the route. That is why, since the 1980s, many so-called shortline or class 3 railways (<$ 40 million in sales and less than 350 miles in length, according to the rules of the AAR ) have been founded.
As part of the further market positioning of the companies , such small companies were taken over by larger companies or went bankrupt due to a lack of transport . Thus the number of trap flags keeps increasing.
Nevertheless, locomotives and wagons of "falling flags" can regularly be observed on American railroad tracks, because the railway companies do not repaint the vehicle inventory taken over from the companies that have been swallowed up overnight. In some cases, vehicles are still on the road designed by companies that have not existed for several decades.
The number of so-called "Class 1" railroad companies (today railroad companies with an annual turnover of more than $ 272 million) has decreased from 193 in 1962 to seven in 2020.