In practice, the economics of narrow gauge dictate a gauge of approximately three feet or less. The one-meter gauge, or in the US three-foot gauge, are most common, although many other widths are seen. In India there is 3,794 km (2300 mi) of track with widths of only 610 mm (24 in) and 762 mm (30 in).
Narrow-gauge railroads cost less to build because they are lighter in construction, using smaller cars and locomotives as well as smaller bridges, smaller tunnels and tighter curves. Narrow gauge is thus often used for mountain railways. Likewise, the lighter construction suits narrow gauge to timber and other temporary work where roads must be moved after the work is done. Some narrow-gauge timber lines were built almost entirely on trestles through the woods with virtually no roadbed.
In many countries, due to their lower construction costs, narrow-gauge railroads were built as "feeder" or "Branch" lines to feed traffic to more important standard-gauge railroads.
In some countries, especially countries with a lot of hilly or mountainous terrain, extensive systems of narrow-gauge railroads were built, especially in remote areas of limited economic development, where there would not be enough traffic to justify the cost of building full standard-gauge railroads.
The disadvantages of narrow-gauge railroads is that the initial savings, while possibly large, are possibly outweighed by ongoing costs.
The most fundamental problem is that most narrow-gauge railroads are 'islands' - they cannot interchange equipment with the standard gauge railroads they link with. Therefore, a narrow gauge common carrier in such a situation has a built-in and inevitable cost when it comes to receiving traffic, whether people or more importantly freight, from outside of its own system, and sending to destinations outside its own system. The cost of transshipment is a substantial drain on the finances of a small railroad, and transshipment is almost always a task involving much expensive and time-consuming manual labor. For certain bulk commodities transshipment can be mechanised, such as for coal, ore, gravel and the like.
The problem of interchangeability is less serious when a large system of narrow-gauge lines exist which carry considerable amounts of internally self-contained traffic, such as in northern Spain and in South Africa. But most narrow-gauge lines were constructed as stand alone "feeders" entirely dependant upon transshipment to a larger main-line network.
When there was no competitor to the narrow gauge railroad this was less of a problem, but it made narrow gauge lines very vulnerable to truck competition. The railroads' trump card has always been economy of scale and distance, and the transshipment requirement removed that. Trucks had no worse a transshipment problem and were more flexible to boot.
Other problems with narrow gauge railroads came down to that they lacked room to grow - their cheap construction was bought at the price of only being engineered for their initial traffic demands. While a standard-gauge railroad could much more easily be upgraded to handle heavier, faster traffic, most narrow-gauge railroads were impossible to improve. Speeds could not increase, loads could not increase, and traffic density could not increase very much.
One can build a narrow-gauge railroad to be able to handle such increased speed and loading, but at the price of removing most of the narrow gauge's cost advantage over standard gauge.
Another disadvantage of narrow-gauge trains is that due to lower stability, the trains are restricted to lower speeds than on standard gauge. Metre-gauge express trains in countries such as Japan and South Africa reach speeds of up to 115 km/h (70 mph), but this is about the upper limit thanks to the narrower gauge's reduced stability. Narrower gauge lines such as 2 feet (60cm) railroads are restricted to even lower speeds.
Famous narrow-gauge railways include the Ffestiniog railway in Wales and the Romney, Hythe and Dymchurch railway in Kent, England. There are many narrow gauge railways in Switzerland. The French National Railways used to run a considerable number of meter-gauge lines, a few of which still operate, as does the Southern Railway of India.
In Spain there is an extensive system of metre gauge railroads, in the north-west of the country, run by FEVE, at the centre of this system, is a metre-gauge line which runs for 650 km (400 miles) along the entire length of Spain's north coast. Many African and Asian nations have narrow-gauge lines, as do many island nations. Notable is South Africa where the entire railway system is metre gauge.
In the 1990s, India concluded that cities on the metre gauge network have a second-rate train service, and is now converting most of the metre gauge network to broad gauge. In other words, the advantages of uniformity and interoperability overshadow supposed benefits of non-uniform gauges. In still other words, a gauge differential from standard gauge of only metre gauge is not worth the difference. Only gauges as narrow as 762mm (30 in) or 610mm (24 in) are worth the difference.
The Yucatan region of Mexico has a network of narrow gauge lines, established before the region was linked by rail to the rest of Mexico in the 1950s. Only the main line connecting Merida to central Mexico has been widened to standard gauge.
In the United States a major narrow-gauge railway system was built in the mountains of Colorado by the Denver and Rio Grande Railroad. Small remnants of that system remain as tourist attractions which run in the summer, including the Toltec and Cumbres railway which runs from Antonito, Colorado in the San Luis Valley to Chama, New Mexico; and the train which runs in the San Juan Mountains between Durango and Silverton.
The last surviving commercial common carrier narrow-gauge railroad in America was the White Pass and Yukon Route in Alaska; this closed down in 1982 when the metal ore market collapsed, though it has since reopened as a purely tourist railway. There is but one narrow gauge railroad still in commercial operation in the United States, which is the US Gypsum operation in Plaster City, California which uses a number of locomotives obtained from the White Pass after its 1982 closure.
There were extensive two-foot gauge (610 mm) lines in the Maine forests early in the 20th century. Although essentially for transport of timber, the Maine lines even had passenger service. Some cars and trains from these lines are now on display at the Maine Narrow Gauge Railroad and Museum in Portland, Maine after having spent years on the Edaville Railroad on Cape Cod in Massachusetts.