Several factors are responsible for the increased rate of railroad branchline abandonment in South Dakota in recent years. The construction of a statewide highway system paved the way for a trucking industry in South Dakota which today threatens the economic viability of the once-monopolistic rail industry. Some regulations and other factors inherent to South Dakota’s rail and truck industries are also responsible for increasing prominence of the trucking industry. The movement of unprocessed agricultural commodities by truck is not subject to rate or route regulation by the ICC. There are no institutional barriers to industry exit or entry. By contrast, railroad entry and exist is subject to regulation and large investment. Other factors which help explain the rate of branchline abandonment are drought, inflation, subsidization of competing transportation modes, and increased on-farm storage.
South Dakota State University
Alley, Michael J. and Lamberton, C.E., "Branchline Abandonment: A study of the Impact on Selected Communities in Rural South Dakota" (1980). Agricultural Experiment Station Technical Bulletins (1939-2011). 60.