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Dakota, Minnesota and Eastern Railroad

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Dakota, Minnesota & Eastern Railroad
Overview
HeadquartersSioux Falls, South Dakota
Reporting markDME
LocaleIowa, Minnesota, Nebraska, South Dakota and Wyoming
Dates of operation1986–present
DME 4006, City of Balaton, an EMD GP40.

Dakota, Minnesota and Eastern Railroad (DM&E) (reporting mark DME) is a Class II railroad operating across South Dakota and southern Minnesota in the northern plains of the United States. Portions of the railroad also extend into Wyoming, Nebraska and Iowa. DM&E and Iowa, Chicago and Eastern Railroad (IC&E) are both jointly managed by Cedar American Rail Holdings, making the combined system the largest Class II network in the US.[1] Although Cedar American Rail Holdings manages both railroads, in reality it is a subsidiary of Dakota Minnesota & Eastern Railroad Corporation, but Iowa, Chicago and Eastern Railroad is a subsidary of Cedar American Rail Holdings.

DM&E began operations on September 5 1986 over tracks that were spun off from Chicago and North Western Railway in South Dakota and Minnesota. Much of the negotiations were handled by the office of Senator Larry Pressler and his legal counsel Kevin V. Schieffer. After a successful decade of growth for DM&E, Schieffer succeeded J. C. McIntyre as president of the railroad on November 7 1996.

In 1997 DM&E announced plans to build into Wyoming's Powder River Basin to become the third railroad (after Burlington Northern and Santa Fe Railway and Union Pacific Railroad) to tap into the region's rich coal deposits. The Surface Transportation Board (STB) released the final Environmental Impact Statement (EIS) on November 19 2001; with the final EIS in place and approval from the STB, as of 2004 DM&E is pursuing financing to undertake the expansion as proposed. The construction is planned to be completed in 2007 and the addition of the revenues gained from hauling coal along the new line has the potential of elevating the combined DM&E/IC&E system from AAR's Class II to Class I.

DM&E purchased the assets of I&M Rail Link railroad in 2002, renaming it Iowa, Chicago and Eastern Railroad and combining its management and dispatching duties with those of DM&E under the holding company Cedar American Rail Holdings. Schieffer serves as president and CEO of Cedar as well as serving as president of DM&E. The combined system directly connects Chicago through Iowa to Kansas City, Minneapolis-St. Paul and continues as far west as Rapid City, South Dakota. Smaller branches extend into portions of Wisconsin, Wyoming and Nebraska.[2]

1986–1996: startup and initial expansion

In the early 1980s, Chicago and North Western Railway (CNW) announced plans to abandon a section of railroad through Minnesota and South Dakota that dates to 1859. Due to pressure from customers and Senator Larry Pressler from South Dakota, a deal was reached creating Dakota, Minnesota and Eastern Railroad out of sections of CNW from Winona, Minnesota, to Rapid City, South Dakota. This deal also included buildings, rolling stock and locomotives, mostly rebuilt EMD SD9s, from the CNW. DM&E began operations on this track on September 5 1986. The railroad was expanded in 1995 when it acquired additional former CNW branch lines from Rapid City, South Dakota, to Colony, Wyoming, and Crawford, Nebraska.[3]

From startup to the railroad's 10 year anniversary in 1996, DM&E hauled nearly 500,000 carloads of freight, which includes 700 million bushels (approx 19 million tonnes) of grain. DM&E celebrated the anniversary with picnics and employee appreciation events and excursions in Waseca, Minnesota, and Pierre, South Dakota.[4]

At the end of 1996, Kevin V. Schieffer, whom former United States President George H. W. Bush had appointed as US Attorney for South Dakota in 1991, became president of DM&E on November 7 1996. Schieffer was no newcomer to the railroad, however, as he had first become involved with DM&E in 1983 when he worked to prevent the abandonment of the former CNW lines that eventually formed the first sections of DM&E's mainline. Maintaining the status quo on DM&E was not the fate that he had in mind for the railroad as he took the reins.[5][6]

1997–2004: proposed expansion into the Powder River Basin

In 1997, DM&E announced plans to expand into the Powder River Basin (PRB) in Wyoming and start providing unit coal train service from that area. The railroad filed an application for the expansion to the Surface Transportation Board (STB) on February 20 1998. Burlington Northern Railroad built into this area in 1979, and Chicago and North Western Railway (CNW) built into the area by 1984 (a project that was completed by CNW's successor Union Pacific Railroad). DM&E would become the third railroad to tap into the coal deposits in the region.

DM&E's expansion would require the construction of 281 miles (452 km) of new track, upgrading 598 miles (962 km) of existing track (including all of the railroad's track in Minnesota), new interchange connections in Owatonna and Mankato, Minnesota, and three new rail yards. The STB approved the application on December 10 of that year pending completion of an Environmental Impact Statement (EIS), which was released by the STB on September 27 2000. This plan would be the largest new railroad construction in the United States since the completion of Milwaukee Road's Pacific extension to Seattle, Washington, in 1909.[7]

An analysis of the plan by Minnesota's Dakota, Minnesota and Eastern Railroad Working Group in 2001 showed support among customers and freight shippers, but DM&E's expansion plan led to complaints among residents in communities along the railroad's right-of-way.[8] While some communities welcomed the railroad's expansion plan as an opportunity for increased business within their own cities, other residents and businesses felt that roads in the area were not built with enough overpasses and underpasses to deal with the traffic flow problems that the longer and more frequent unit trains would produce at grade crossings. The objectors cited concerns of the general public in safely and quickly traversing their communities as well as the ability of emergency vehicles to cross the tracks to reach emergency scenes or hospitals. The city of Rochester, Minnesota, filed a lawsuit to force the railroad to build a bypass around the city; the bypass was estimated to cost around US$100 million.[9][10][11]

While a bypass would remove the trains from sometimes crowded city streets, it would require purchasing land outside of the city that was privately owned. One resident summed up the problem saying that if the railroad didn't go through the city, "it would just go through someone else's place" in the country. Schieffer presented the railroad's view on this issue in a public meeting in Rochester saying:

"I don't think we have to go out and tell someone else, `We want to take your land instead of developing our own property because somebody thinks there might be a problem in the city.' If there's a problem in the city, then there's an opportunity for you to build. But before we establish that there is a problem, it's pretty hard for me to walk up to somebody's door and say, `Hi. I'm from the railroad and we're going to take your land.' I've got to do that out West, and it's not fun."[12]

After a period of public comment that lasted until March 16 2001, and further review by the STB, the final EIS was issued on November 19 2001. In this final approval, the STB agreed with DM&E that no new bypasses around cities would be required even though the cities of Rochester, Minnesota, Brookings and Pierre, South Dakota, had requested them. In 2003, a ruling by the 8th US Circuit Court of Appeals ordered the STB to re-examine potential environmental issues around Rochester. The STB's preliminary report, released in early 2005, noted that no additional steps were needed by the railroad to alleviate noise and vibration caused by the projected increase in train traffic.[13][14]

In April 2004, DM&E was awarded the power of eminent domain in South Dakota by the 8th US Circuit Court of Appeals in Pierre, South Dakota. The ruling overturned part of South Dakota legislation passed in 1999 (two years after the railroad first announced its intentions to expand) that would have impaired railroad operations and construction in the state. This decision restores the legal process by which the railroad can effectively force landowners along the proposed new route to sell their land to the railroad.[15]

With the final EIS in place and approval from the STB, as of 2004 DM&E is undertaking the expansion as proposed. Construction is expected to be completed in 2007. This expansion has the potential of upgrading DM&E's status from AAR's Class II to Class I.

2002–present: consolidation with IC&E

DM&E hauled nearly 60,000 carloads of various freight shipments in fiscal year 2002, serving approximately 130 customers along the railroad's mainline. Of these shipments, 53% were grains or grain products, 24% were bentonite and kaolin clay, 7% were cement and 5% were wood and lumber products; the remaining 11% were split among all other types of freight.[16]

DM&E and IC&E combined route map as of 2002.

On February 21 2002 DM&E announced that it would purchase the railroad assets of 1700-mile I&M Rail Link (IMRL) from its then current owners Washington Companies and Canadian Pacific Railway. DM&E renamed the IMRL property to Iowa, Chicago and Eastern Railroad (IC&E). Although a purchase price wasn't stated in the original announcement, an article in the May 2002 Trains Magazine suggests that several industry sources believed the total to be around $150 million.[17]

DM&E and IC&E combined management under the holding company Cedar American Rail Holdings. Locomotives of both railroads were given a unified paint scheme (see below) and interchanges were streamlined between the two railroads. The administration of both railroads is handled by Cedar, further streamlining processes between the two railroads. As a result, the combined DM&E/IC&E system makes up the largest Class II railroad (by route-miles) in the United States; it is also the eighth largest system of all American railroads and the only system with direct rail connections with all Class I railroads in North America.

Rolling stock

DME 49328, a covered hopper.

DM&E originally purchased used first-generation locomotives from a variety of railroads, in the early years it was more common to see a locomotive with a Milwaukee Road or Chicago and North Western Railway paint scheme than a DM&E paint scheme. Over the years, the locomotives were repainted, and many of them are now in DM&E's paint scheme (which is closely mirrored by that of sister Iowa, Chicago and Eastern Railroad) of blue with a yellow stripe along its length.

DM&E eventually assigns names to all of its locomotives when they are repainted, usually after locations along its right-of-way, but a few exceptions have been named for people (like road number 550, named after Senator Larry Pressler). All of the first-generation diesel locomotives purchased from Chicago and North Western and Milwaukee Road have since been replaced with more recent locomotives, although the newer locomotives were also bought used.

Company officers

DM&E has so far had two men serve as president of the railroad:

  • J. C. McIntyre (1986–1996) began his railroad career in 1953, eventually working for Chicago and North Western in the early 1980s. When DM&E was formed in 1986, McIntyre became the new railroad's first president.[18]
  • Kevin V. Schieffer (1996–present) served as counsel for Senator Larry Pressler starting in 1982. Schieffer began working with DM&E business in 1983 when he worked to prevent the abandonment of C&NW branch lines that would eventually form the beginnings of DM&E. He initiated the negotiations in 1985 that led to DM&E's creation. He was promoted to Chief of Staff for Senator Pressler in 1987, a position he held until 1991 when United States President George H. W. Bush appointed Schieffer to be US Attorney for South Dakota. In 1993, Schieffer left his US Attorney post and became the legal counsel for DM&E; as legal counsel for the railroad, he oversaw the railroad's recapitalization in 1994 and the acquisition of C&NW's Colony line. He held this position until he was unanimously elected president of the railroad on November 7 1996.[19]

External links

References

  1. ^ Cedar American Rail Holdings, Inc. (2004), Serving the Heartland of America (PDF). Retrieved January 5 2005.
  2. ^ Machalaba, Daniel; Wall Street Journal (February 21 2002), [20] (PDF), "Wall Street Journal", New York, New York
  3. ^ City of Mankato, DM&E Railroad Proposal. Retrieved January 5 2005.
  4. ^ Dakota, Minnesota and Eastern Railroad (September 13 1996), DM&E Marks 10th Anniversary. Retrieved January 5 2005.
  5. ^ Dakota, Minnesota and Eastern Railroad, DM&E/PRB/IC&E Overview. Retrieved (April 3 2005).
  6. ^ Dakota, Minnesota and Eastern Railroad (November 11 1996), Schieffer named president and CEO of DM&E Railroad. Retrieved April 2 2005.
  7. ^ Dakota, Minnesota and Eastern Railroad Working Group; Minnesota Department of Transportation and Minnesota Planning (April 2001), DM&E Expansion in Minnesota (PDF). Retrieved January 5 2005.
  8. ^ Duff, Diane C., Alliance for Rail Competition (November 13 1998), Letter of Support for DM&E. Retrieved January 5 2005.
  9. ^ Galbally, Erin, Minnesota Public Radio (March 11 2002), DM&E - Towns on the line. Retrieved April 15 2005.
  10. ^ Glischinski, Steve (February 2002), Coming: A third Powder River Basin player, Trains Magazine, p. 10-11.
  11. ^ Glischinski, Steve (May 2002), DM&E begomes "a significant national player", Trains Magazine, p. 14.
  12. ^ Hetland, Cara; Minnesota Public Radio (June 11 2003), DM&E builds railroad empire while it awaits court approval. Retrieved January 5 2005.
  13. ^ Hildebrand, John (November 2001), The Appraisal - Dakota, Minnesota, and Eastern Railroad and Rochester, Minnesota, debate bypass route, Harper's Magazine. Retrieved April 15 2005.
  14. ^ Kafka, Joe; Associated Press (April 15 2004), Ruling moves railroad's plans forward (PDF), Argus Leader, Sioux Falls, South Dakota, p. 3B. Retrieved January 20 2005.
  15. ^ Mayo Clinic (July 15 1998), DM&E Proposal. Retrieved January 5 2005.
  16. ^ Office of Freight, Railroads & Waterways; Minnesota Department of Transportation (2005), DM&E. Retrieved January 5 2005.
  17. ^ Surface Transportation Board (2005), Dakota, Minnesota & Eastern Railroad Corporation construction into the Powder River Basin. Retrieved June 10, 2005.
  18. ^ (July 2005), "STB says no further conditions needed on DM&E expansion", Trains Magazine, p. 20.


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