A class II carrier for PRB coal?

Railway Age, May, 1997

In the times when Burlington Northern and a Chicago & North Western subsidiary were the origin carriers for Powder River Basin coal, the CEO of one of the companies--denying charges of rate-gouging--referred to the operation as "a badly-managed duopoly." Now, PRB coal leaves the mines via Burlington Northern and Santa Fe or Union Pacific, but one railroad analyst thinks a third railroad may try to muscle in: Class II Dakota, Minnesota & Eastern, which last year acquired UP's 200-mile "Colony" line in South Dakota but still remains 100 miles short of PRB mines.

Bridging the gap would require state and federal approval, no doubt against strong opposition from BNSF and UP. It would also require extensive upgrading of DM&E's existing lines. On the plus side, James J. Valentine, the railroad analyst at Salomon Brothers, points out that DM&E enjoys lower labor costs than BNSF and UP, and that it has a connection with Canadian Pacific, along with a potential link with Illinois Central, over which PRB coal could move to mid-continent gateways such as Chicago, St. Louis, and Memphis.