Like many areas of the former Penn Central Railroad, the Delmarva Peninsula was not operating at Class One efficiency. In addition to the primary mainline between Wilmington, DE and Pocomoke, MD, there were several small branch lines that needed minimal rail service. Many of these lines roamed into some of the most rural areas on the shore, and were simply not fit for a larger carrier. With poor track in continually deteriorating condition, the branches were omitted from the Final System Plan, which created Conrail in 1976.
As was the case in many states, the lines were slated to be abandoned. However, politicians from the states of Maryland and Delaware contracted with Conrail to operate these struggling branches as a subsidized “designated operator” with ownership retained by Penn Central. After one year of operation the expense of subsidizing these lines at Conrail’s high cost led the state governments to seek a lower cost short line as a “designated operator”.
In August 1977, as the Conrail startup was still in full swing, The Maryland and Delaware Railroad Company (MDDE) was created. Soon after its organization, the firm was selected as the “designated operator” of three branches in its namesake states under contract with the Maryland Department of Transportation and authority of the Interstate Commerce Commission as defined by the Federal 4-R Act.
These branches made up the company's current Seaford, Chestertown- Centreville Lines, and the now abandoned route between Clayton, DE. and Easton, MD.The Seaford Line runs between the Conrail mainline in Seaford, DE. and Cambridge, MD.The Chestertown-Centreville Line runs between the Conrail interchange in Townsend, DE. and Massey, MD. where it splits into two other branches to Chestertown and Centreville.These two branches were purchased by the State of Maryland.
Another branch, operating between Frankford, DE. and Snow Hill, MD. was purchased by the Snow Hill Shippers Association in 1982, and operated by the Maryland and Delaware Railroad.In 2000, ownership of this line was transferred to the Maryland and Delaware Railroad.
In 1994, the MDDE took over two lines in the State of Delaware as contract operator of one branch between Ellendale and Milton, and a second branch between Georgetown and Lewes. However, in 1999 the MDDE decided not to renew the operating contract and operation of these two lines was returned to the previous operator, the Delaware Coast Line.
In 2008, MDDE continued the relationship with the State of Maryland by signing a 15-year extension on the operating agreement for the Seaford, Chestertown and Centreville Lines. The new agreement calls for MDDE to be designated operator of the lines through the year 2023.
Currently, the MDDE operates over 120 miles of track throughout the States of Maryland and Delaware. As was the case from its inception, the company is operated out of the restored station in Federalsburg, MD. bringing shortline quality service where larger carriers could not. Now, after over 32 years in operation, the company is looking ahead to a bright future for railroading on Delmarva.
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