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Dakota, Minnesota and Eastern Railroad: 1997

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Author Info

  • Paul R. Reed

    (Sam Houston State University)

  • Carol J. Cumber

    ()
    (Department of Economics, South Dakota State University)

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    Abstract

    Approximately twenty-five years ago, a majority of the railroads in the industry were either in or near bankruptcy. As a partial cure, a series of federal and state legislation was enacted which freed the industry from archaic laws passed in the days railroads enjoyed a virtual monopoly in U.S. transportation. One of the outcomes of this new legislation was the freedom granted major railroads to abandon or sell off excess trackage to entrepreneurs. The Dakota Minnesota & Eastern (DM&E) is a regional railroad that was spun off from the Chicago and North Western(C&NW) Railroad in 1986 and purchased by a group of entrepreneurs. The railroad’s mainline extends from the Mississippi River at Winona, Minnesota across southern Minnesota and central South Dakota to Rapid City. In 1996, the DM&E acquired more than 200 miles of track from Union Pacific Railroad, extending from Colony, Wyoming through Rapid City to Crawford, Nebraska. Grain currently accounts for more than 40 percent of the railroad’s 60,000 annual carloadings, which have increased more than 40 percent since 1987—DM&E’s first full year of operation. The DM&E began operations with 130 employees, 37 locomotives and no freight cars. The DM&E now employs 350 people, and owns or leases 70 locomotives and almost 30,000 freight cars. The case traces DM&E’s first eleven years of operations from its chaotic beginnings to its development as a profitable railroad, to its recent apparent unraveling. (Contact author for a copy of the complete report.)

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    File URL: http://repec-sda.sdstate.edu/repec/sda/pdf/DakotaMinnesotaEasternRailroad_abstract.pdf
    File Function: Final version, 1998
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    Bibliographic Info

    Paper provided by South Dakota State University, Department of Economics in its series Case Study Abstracts with number 199801.

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    Length: 1 page
    Date of creation: Jan 1998
    Date of revision:
    Handle: RePEc:sda:csabst:199801

    Contact details of provider:
    Postal: Box 504, Scobey Hall, Brookings, SD 57007-0895
    Phone: 605-688-4141
    Fax: 605-688-6386
    Web page: http://www.sdstate.edu/econ/
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    Related research

    Keywords: Strategic Mgmt; Regional Railroads;

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