By the time the first RS-3's rolled off the assembly line in 1950, Alco had refined its road switcher concept to create "a truly universal locomotive which could do anything and go almost anywhere," in the words of author J.W. Swanson in New Haven Power. In contrast with its predecessor, the 1000 hp RS-1, the 1600 hp RS-3 had all the power of a road diesel of its time and could boil along at up to 80 mph.

For awhile in the early 1950's, ALCO looked like a true contender in the burgeoning road switcher market. RS-3's could be found on a majority of class one railroads doing everything from switching and transfer duties to mainline freight and even passenger and commuter service.

Ultimately, however, the RS-3 took a distant second place to Electro-Motive's GP7 and GP9 in sales volume. Perhaps what doomed Alco was EMD's already-commanding lead in the road diesel market - in part because EMD's FT was the only road diesel allowed to be produced during World War II, when diesels began their takeover of American railroads. Other builders were relegated to producing diesel switchers until the conflict ended.

There was also talk that Alcos were less dependable. In hindsight, however, that seems to have been a result of EMD's sales lead. Perhaps shop crews were simply less familiar with Alco's model 244 prime mover and how to service it. In fact, roads with primarily Alco fleets, such as the New Haven, found Alco products to be very reliable when maintained properly. With their power and flexibility, RS-3's proved their worth so successfully that many railroads kept them on active duty after other first-generation diesels had been retired. They survived on class 1 railroads until the Delaware & Hudson retired its last RS-3 in 1986 and remained active in shortline and industrial service for years afterward.

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