Rail terminals can be categorized by the passenger and freight markets they service with the function of shunting accounting for an intermediary form. Passenger and freight terminals can also be differentiated by their locational setting:
- Passengers terminals. The intercity rail terminal, often taking the form of a central station, is the standard passenger terminal and a distinctive urban landmark since many have been present for decades and have helped defined urban centrality. Commuter rail covers metropolitan areas with stations of a simpler design and function since waiting time is of short duration. Urban transit systems are also serviced by rail, namely subway and light rail, and depending on density levels are shaping urban dynamics through their network structure. There is a whole hierarchy of rail stations depending on their size and the passenger traffic they handle, ranging from simple quay along a commuter line to large central stations that the hub for intercity, commuter and urban transit rail systems. A much more recent type of rail terminal involves high speed rail stations which has either required the adaptation of existing central stations to provide spurs connected to the high speed rail network or the construction of new dedicated terminals in suburban areas that can act as new poles of urban development. The growth of air transportation has conferred new opportunities for rail, with the airport becoming a hub for intercity, commuter and urban transit. In some instances, a high speed rail station is part of the airport terminal complex.
- Freight terminals. For bulk, rail freight terminals tend to be commodity specific with dedicated facilities for either loading or unloading (both activities rarely take place at the same terminal). Roll-on / roll-off terminals are even simpler since a simple ramp is required to load or unload the equipment, but a large amount of parking space is needed. Break-bulk rail terminals concern a wide variety of activities where the loading and unloading often take place at small privately owned facilities serviced by rail spurs. It is the intermodal terminal that has seen the most development with the setting of facilities handling international and domestic containers. The locational setting of rail freight terminals is usually centered along port terminals, fluvial terminals (less common) or inland locations providing accessibility to markets or resources.
- Shunting (switching) terminals. While shunting yards are not necessarily a terminal since they do not handle passengers or cargo, they are a fundamental element of rail operations. The shunting of passenger rail cars is important but less frequent and often takes place at maintenance yards or at yards near central stations (also known as coach yards). For freight, particularly non-intermodal cars, shunting is an important function to assemble, sort and breakdown train units based upon a variety of cargoes, origins and destinations.