The North American railroad network is projected to experience increasingly constrained capacity. Growth in long-term demand for freight transportation combined with higher speeds and greater frequency of passenger trains operating on the same trackage will increase congestion at many locations. To accommodate this demand and maintain traffic fluidity, investment in projects to increase the capacity of many lines will be necessary. Recent changes in commodity flows, particularly related to rail transport of energy sources such as petroleum, alcohol, and coal, have led to growth on lines with historically lower traffic density and infrequent passing sidings that are too short for modern unit trains. This study aimed to find the most effective capacity expansion strategy for these single-track lines with sparse sidings. Rail Traffic Controller software was used to conduct experiments simulating traffic operation on such lines under several expansion alternatives, and the performance in terms of train delay and reliability was evaluated. The results suggest that for a single-track line with sparse sidings, the best strategy is first to construct new sidings between existing sidings in the middle of the corridor. Then these investments should be extended toward the two end terminals by constructing new sidings in successive gaps until the maximum number of sidings is reached. The results are also used to develop a relationship between the total length of the second main track and average freight train delay for use in planning capacity expansion on these lines.