Europe

Relatively short trackage between destinations and high traffic volumes in Europe favoured electrification to replace steam. Many lines are electrified, though some low volume secondary lines and switching service remain unelectrified. Most countries used diesels as an interim solution during postwar reconstruction and electrification. Some countries, most notably Switzerland, have electrified their whole network. The most powerful electric locomotives in western Europe pull Swedish ore trains.

In Britain the Great Western Railway introduced diesel railcars in the 1930s and the first British mainline diesel locomotive was built by the London, Midland and Scottish Railway in 1947 but, unlike elsewhere in the developed world, the transition away from steam was delayed during the early postwar years. The delay was driven by two economic considerations: the lower initial cost of steam locomotives for immediate replacement of the large number of locomotives worn out from wartime service, and a projected rise in the cost of petroleum relative to coal, a plentiful domestic resource. Nationalisation of the railways took place in 1948; diesel locomotives were first introduced on a wide scale following the Modernisation Plan of 1955. Poor reliability among the first diesel locomotives used in the Modernisation Plan caused it to be implemented at a slower pace while the problems with the locomotives were worked out during the second half of the 1950s.^[5]

The last steam locomotive for British Railways was built in 1960 and named "Evening Star" (number 92220). Steam traction was withdrawn on British Railways in 1968 and largely replaced with diesel traction (with electrification on a minority of lines). Steam was finally eliminated on Northern Ireland Railways in 1970 and entirely replaced with diesel.

Steam continued on the London Underground until 1971, as London Transport considered steam to be cheaper than diesel shunters. After 1971, diesel hydraulics and battery electrics took over shunting duties on the LU. Steam continued on many industrial railways in the UK mainly with the National Coal Board And British Steel Corporation until the 1980s.

Ireland chose dieselisation over electrification and as of 2015, the railways in Ireland (with the exception of the electrified Dublin Area Rapid Transit) remain entirely diesel operated.

North America

The small initial market for diesels was created by the State of New York's Kaufman Act of 1923, which prohibited operating steam locomotives in New York City and adjacent towns. Mainline passenger railroads in New York had already been electrified, or their electrification had been planned regardless of the Kaufman Act. Electrification of numerous freight yards was uneconomical, and railroads turned to diesels. The first ALCO boxcab switcher was put in operation in 1925 by Central Railroad of New Jersey at its 138th Street^[6] waterfront terminal in The Bronx.^[7] The second was delivered in the same year to Baltimore and Ohio Railroad's yards on Manhattan. Both worked into the late 1950s and survive in museums to date.^[8] The advantages of diesel-electric switch engines gained them a widespread market during the 1930s.

Dieselization got a boost from three developments of the early 1930s: the development by General Motors and its Winton Engine Corporation subsidiary of diesel engines with vastly improved power-to-weight ratios and output flexibility; the desire of railways to find more cost-efficient locomotion for passenger service at the height of the Great Depression; and design innovations in rail equipment that reduced weight, making the contemporary diesel engines, which were low-powered by today's standards, viable for mainline passenger service. The mid-1930s saw the introduction of lightweight diesel-powered streamlined trainsets such as the Burlington Route's Zephyrs and Union Pacific's M-1000x "City" trains. During the second half of the decade, diesel locomotives with sufficient power for full-size passenger trains were developed and put into regular production. Improved GM diesel engines in 1938 increased power and reliability. GM's sales contracts included training, financing, and maintenance from GM to lower the hurdles in converting from steam to diesel. Dieselization of passenger service gained momentum as the decade drew to a close and the first model of mainline diesel freight locomotive was on the market in 1940. Dieselization was especially attractive to western railroads, for whom the watering requirements of steam locomotives were a problem in vast stretches of the western interior. Coal-country railroads were generally reluctant to embrace diesel, a competitor to one of their main hauling markets, well into the 1940s.

Competition from diesel spurred a round of development in steam locomotive technology. High style, high speed "steamliners" produced during the second half of the 1930s became the speed kings of passenger service. Duplex and articulated steam locomotives built in the early 1940s exceeded the power of any diesel ever built, although their power was edged by gas turbine-electric locomotives during the 1950s. Mechanical coal stokers, in use since the 1920s,^[9] and use of bunker oil as an alternative fuel, facilitated the practical use of steam for the highest power requirements. But the limits of steam technology were rapidly being reached. The new locomotives were mechanically complex and extremely specialized. Locomotive size became an issue, as steam engines became so big in the 1940s that the cylinder and boiler dimensions were pushing the limits that the loading gauge would allow. The fuel and water requirements of high-powered steam locomotives became an issue. Steam turbine-electric locomotive power was developed in 1938 by General Electric. GE abandoned the project in 1943 after unsatisfactory results during trials with three railroads and subsequent efforts by Baldwin Locomotive Works with steam turbine-electric locomotion during the late 1940s and early 1950s were similarly unsuccessful.

US entry into World War II interrupted dieselization. The US Navy gained priority for diesel engines, curtailing their availability for railway use. No production of passenger locomotives was permitted by the War Production Board between September 1942 and February 1945. The petroleum crisis of 1942–43 made coal-fired steam more attractive, especially near the east coast. After the peak of the petroleum crisis and as wartime production of diesel engines hit its stride, increasing production of freight diesel locomotives was permitted. By the war's end, pent-up demand to replace dated and worn-out railway equipment was overwhelming.

The market share of steam locomotives dropped from 30% in 1945 to 2% in 1948.^[10] The drop was most precipitous in passenger service, where modernization of equipment was imperative for image and cost reasons as railroads faced increasingly stiff competition from airplanes and the automobile. Norfolk and Western continued to champion steam, running steam passenger locomotives until 1959 and acquiring the last American steam locomotives built, a piston locomotive built in their own shop in 1953 and a steam turbine-electric locomotive built by Baldwin Locomotive Works in 1954.^[11]

Due to the advantages of diesel locomotives, railroads in North America had retired 90% of their steam locomotives by the mid-1950s.^[12][13][14] Also, major cities and their railyards became unhappy neighbors in post-war America. People were no longer content to endure the large amounts of soot and smoke that coal burning steam engines produced. Early diesels, while dirty by today's standards, were a gigantic improvement in air pollution over steam.

Steam engines lasted well into the late 1950s on major American railroads, and in isolated cases into the middle 1960s on small common carrier roads. The last steam locomotive fleet in everyday use (i.e. not a restored fleet) was retired in the late 1970s. Now they are only found in historical and sightseeing roles, where the steam engine is once again the star of the show. Retired steam engines, many of which were quite new when made obsolete, often found a second life in developing nations due to their cheap labor for maintenance and crewing, ready supplies of coal, and lack of environmental concern.

Soviet Union – Russia

Soviet leadership in the 1920s and 1930s had originally envisioned railway electrification as a key component of their industrialization, but by World War II only a small portion of their rail lines were electrified. Their project faced many challenges, including the high initial costs of electrification relative to traffic volume on long rail lines, high resource costs of early Soviet electrical power generation, and the urgent need to repair wartime damage to rail and power systems throughout eastern Europe. In the mid-1950s the Soviet Union embarked upon a hybrid dieselization/electrification program, with electrification concentrated on shorter lines. Both dieselization and electrification proceeded slowly; the last steam locomotives retired in 1975. At that time about 48% of freight tonnage was hauled by diesel locomotives. In 1990, about 30% of passenger traffic and 37% of freight tonnage was hauled by diesel. Post-Soviet electrification was slowed by the economic collapse of the 1990s. Electrification was completed on the Trans-Siberian Railway in 2002 and on the Kirov Railway to Murmansk in 2005. Since 2008, diesel-hauled freight tonnage has been less than 15% of the total freight tonnage.

Asia

Philippines

The first trains assembled in the Philippines, the MC class of 1932 pioneered the use of gasoline and diesel fuel in the country.

The state-owned Manila Railroad Company (MRR) began its experimentation with gasoline and diesel fuel in the 1930s. The first to be installed with diesel power were the MC class railcars that entered service in 1932. These streamlined railmotors were fitted with 96-horsepower Cummins engines. A set managed to survive with the Philippine National Railways until the 1980s.^[16]

By 1954, MRR general manager Salvador Villa ordered the dieselisation of the MRR network. General Electric provided diesel-electric locomotives while a Japanese consortium led by Daiichi Bussan Kaisha provided the JMC class diesel multiple units. The JMC class entered service in 1955 while the GE-built diesel locomotives entered service in 1956. On August 15, 1956, the MRR's steam locomotives ended their last regular services in Luzon.^[17] Contemporary efforts towards electrification has started in the 1990s, with the North–South Commuter Railway being its latest incarnation.

While steam power largely left passenger service by the late 1950s, several plantations in Luzon and Visayas continued to operate steam locomotives. As of 2020, at least one sugar mill in Negros Island still operates a steam locomotive fleet.^[18][19]