Train Traffic: Up to 50 Trains a Day

Four factors could multiply the number and speed of freight trains on DM&E’s main line from Wall, S.D., to Minnesota City:

1. Replacement of the existing DM&E line will boost speeds. DM&E plans to install Class 3 track, which has a 40-mph speed limit for freight trains. With CP’s financial backing, work could begin in late 2008. To boost the track to Class 4 and a 60-mph speed limit for its coal project, all the railroad has to do is comply with more stringent standards for track structure, geometry and inspection frequency.
    
2. CP will route more trains from Owatonna to Winona. CP has said that two daily trains between Huron, S.D., and Chicago that now switch to DM&E’s subsidiary, the Iowa, Chicago & Eastern Railroad (IC&E), at Owatonna will continue east through Rochester to CP’s main line at Winona. Other increases could follow because CP will favor its own main line over IC&E’s delay-prone route into Chicago on the METRA commuter line. 
    
3. Multiple growth factors will add more trains. Faster delivery with higher speeds and being part of a single-system carrier with coast-to-coast reach will make DM&E a more attractive shipping option. Meanwhile, annual production of ethanol and biodiesel plants along DM&E and IC&E tracks will expand to 2 billion gallons in coming years. By the year 2010, DM&E and IC&E project hauling 36,728 cars of ethanol – six times their volume of all hazardous materials in 2005.
    
4. Construction of a Powder River Basin (PRB) extension could add up to 43 coal trains a day. CP says it has not decided whether to build, but it did agree to pay DM&E shareholders as much as $1.07 billion if construction begins and the line reaches annual coal volume of 125 million tons, the equivalent of 43 daily coal trains. DM&E is barred from transferring PRB coal shipments to IC&E. Since DM&E’s only viable interchange for PRB coal shipments is with CP, all DM&E coal trains would follow the main line all the way to Minnesota City, where it connects to the CP main line.