The fundamental objective of this paper is to aggregate and establish a set of practical principles, guidelines, and procedures to clarify and improve classification yard design and to enhance the efficiency of the design process. The paper primarily addresses theoretical and technical aspects of hump yard height and grade design, placement of the switches and the retarders. It attempts to compile and document yard design procedures, based on the Theory of Energy Head and Energy Loss. This procedures are applicable to the design of new yards, rehabilitation of the existing yards of different types and sizes including manually operated as well as highly automated classification yards.