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Chicago Central and Pacific Railroad: Operating IC's Iowa Division

Published: November 29, 2024

By: Adam Burns

Formed during the early years of the modern short line/regional movement, the Chicago Central and Pacific Railroad (CC&P) left a significant impact on the Midwest's rail network despite its relatively brief existence.

Founded in 1985, the Midwestern system was a product of its era, navigating the challenges of deregulation and the changing dynamics of American railroads.

The CC&P was one of Illinois Central Gulf's four major spinoffs during the 1980s (MidSouth Rail Corporation in 1986; Chicago, Central & Pacific in 1985; and Chicago, Missouri & Western in 1987) as the large Class I attempted to return in an effort to return to profitability.

The CC&P - operating all of IC's former Iowa Division consisting 733.1 miles between Chicago and Council Bluffs/Sioux City - was arguably the most successful.  It proved so successful the IC repurchased the property in 1996. This article seeks to trace its history, understand its operations, and reflect on its lasting legacy.

Chicago Central & Pacific GP10 #8002, still in ICG colors, leads westbound train #51 at East Dubuque, Illinois on September 12, 1993. Doug Kroll photo.

Founding

In the years leading up to the Chicago Central's formation, railroads had faced severe financial pressures, competition from other forms of transport, and a regulatory environment that many deemed stifling since the early 20th century.

By the 1970s many were either in bankruptcy or serious financial difficulty with thousands of miles of deferred maintenance.  This was especially true in the overbuilt Midwest where granger lines like the Rock Island, Milwaukee Road, and Chicago & North Western were struggling to maintain profitability.

The Staggers Rail Act of 1980 had deregulated the industry, providing rail companies greater freedom to set prices and streamline operations. This new landscape fostered opportunities for regional lines to emerge and thrive.

Enter Jack Haley, a visionary in the railroad industry who recognized the potential for a more focused regional service in the Midwest. In 1985, Haley spearheaded the purchase of approximately 733 miles of Illinois Central Gulf's Iowa Division.

The acquisition included most of its remaining lines between Chicago and Omaha, Nebraska, as well as branches into key agricultural areas in Iowa and northwestern Illinois; notably Albert Lea, Cedar Rapids, and Sioux City.

From the outset, the CC&P faced formidable challenges. The rail line had inherited stretches of track that were in disrepair and required significant investment. Additionally, competing with larger, established railroads necessitated a strategic focus on efficiency and customer service.

It also began with a ragtag collection of first-generation Geeps, mostly former ICG and Milwaukee Road GP7s and GP9s which had been rebuilt over the years.

Nonetheless, the founders saw an opportunity to carve out a niche market by emphasizing reliable service and tapping into the region’s rich agricultural and industrial output.  And successful they were.

Chicago Central & Pacific GP10 #1742 lays over at the small engine terminal in Freeport, Illinois with a former Milwaukee Road GP20m on August 25, 1991. Doug Kroll photo.

Operations and Growth

The CC&P centered its operations on serving the agricultural heartlands of the Midwest, hauling corn, soybeans, and fertilizers, as well as industrial products like steel and petrochemicals. Its strategic location facilitated connections to major rail gateways - notably the Chicago & North Western, Santa Fe, and Union Pacific - allowing access to broader national and international markets.

As a regional railroad, the CC&P prided itself on offering more personalized service to its customers, responding quickly to their needs, and maintaining a level of flexibility larger railroads often struggled to provide.

Over the years, continued investment in infrastructure improved the line’s capacity and reliability, which in turn attracted more business. The introduction of innovative technologies and management practices, such as precision scheduled railroading, allowed the railroad to optimize its operations further.

By the early 1990s, the CC&P had firmly established itself as a profitable and efficient carrier in the regional market.  In addition, the railroad had upgraded its main line to operate freight trains at speeds up to 40 mph.

Key Divisions

Illinois Central Takeover

Despite the success it enjoyed, the CC&P's independence was relatively short-lived. In 1996, the Illinois Central announced its intent to acquire the line. This move was part of IC's broader strategy to handle Midwestern grain to either ethanol plants, southern chicken farmers, or Gulf Coast ports.

For many in the rail industry, this acquisition marked both an end and a new beginning. In 1999 Illinois Central was acquired by the much larger Canadian National and the former Chicago Central lines were integrated into CN brought access to a vast, continent-spanning network, opening up new growth opportunities for businesses served by the former regional railroad. 

Chicago Central & Pacific GP38 #2002 - a former Monongahela unit - lays over at Council Bluffs, Iowa on June 29, 1991. Warren Calloway photo.

Legacy

The history of the Chicago Central and Pacific Railroad is emblematic of the broader trends in the railroad industry during the latter half of the 20th century. It underscores the tumultuous environment regional lines navigated—an environment shaped by deregulation, competition, and the relentless pursuit of efficiency and growth. For a brief period, the CC&P offered a compelling alternative to the larger carriers, proving that regional lines could not only survive but thrive in the right circumstances.

The ultimate legacy of the CC&P lies in its contribution to the vitality of the Midwest's economy during its operational years. By providing reliable and efficient transport solutions, it facilitated the movement of essential goods across the heartland, supporting local industries and communities. Even after its merger with CN, the routes and services initially developed by the CC&P continue to play a crucial role in the region's transportation landscape.

In retrospect, the Chicago Central and Pacific Railroad’s story is a testament to the resilience and adaptability of regional railroads, which have long been the backbone of America's transport networks.

As the industry continues to evolve in the face of new challenges and technological advancements, lessons from the CC&P's history remain relevant—reminding us of the enduring importance of agility, customer focus, and strategic vision in the world of rail.