Nov. 6, 2025

This piece is sponsored by Knife River South Dakota.

Sixty-six miles of railroad tracks might not seem like it would play a large role in the business model for Knife River, but thanks to the forward-thinking leadership at Ellis & Eastern Railroad, each of those 66 miles of track is helping both Eastern & Ellis and Knife River grow their services.

Running a railroad wasn’t part of Knife River’s business plan until 2018 when the company acquired Sweetman Construction, based in Sioux Falls. As part of the acquisition, Knife River also took over Ellis & Eastern and 66 miles of track stretching from the heart of Sioux Falls to Worthington, Minnesota.

Ellis & Eastern does a little bit of everything with that track, starting with hauling aggregates to Knife River’s plants in Sioux Falls and out to the Corson plant, which produces sand for ready-mix and asphalt plants. Hauling material by rail is safer, cheaper and more efficient. Four truckloads of sand or rock fit in each railcar, and Ellis & Eastern hauls a minimum of 20 railcars per day to distribution yards around the city, helping maximize production and minimize costs.

A large chunk of the track – 40 miles from Manley, Minnesota, to Worthington is used for railcar storage. Third-party customers pay Ellis & Eastern to store their rail cars on the lines.

Ryan Hunsaid, general manager at Ellis & Eastern, said railcar storage is very profitable and helps diversify the company’s services to additional customers.

Ellis & Eastern also teams up with Rail to Road – another Knife River subsidiary that came with the Sweetman acquisition – to transload railcars for customers.

“South Dakota is so vertically integrated,” Hunsaid said. “We make the materials in our quarry, we haul with our own railroad, we bring railcars with fly ash or cement powder around town, and then we transload at Rail to Road.”

With owning a railroad – no matter how long or short – comes needing to maintain the tracks. Ellis & Eastern’s latest venture is saving money on track maintenance while also helping grow the company and expand its service area.

The contracting arm at Ellis & Eastern helps customers with railroad upkeep, monthly walkthroughs and maintenance, and consulting.

For many years, Hunsaid and the crew at Ellis & Eastern hired out the railroad contracting – or maintenance – to GA Fossum. The family-run business included Dylan Fossum, dad Gary and a handful of employees dedicated to fixing railroad tracks, including the Ellis & Eastern tracks.

Hunsaid had been in touch with Fossum, and when his dad retired in spring 2024, Ellis & Eastern bought many of the GA Fossum assets, hired Fossum and used his contracting knowledge to start growing that piece of the business.

Jerry Hegstrom joined the team in spring 2025 to expand Ellis & Eastern’s list of services, and now the company has contracting projects in Iowa, Minnesota, North Dakota, South Dakota and Montana.

Through September, Ellis & Eastern had invoiced 115 contracting projects, up from 70 in 2024, and has 17 contracting employees – with more to come. Hunsaid looks for continued growth in the Midwest and beyond as the company continues to expand its services.

“Our short-term goal is to take care of local customers,” he said. “Our 10-year-plan is to serve customers across the U.S. The rail is so generalized: In California or New York, it’s all the same specs. It’s nice to have Knife River operations across the country, which allows us to utilize their expertise and relationships while growing our business as a whole.”

Ellis & Eastern recently rolled out a revamped website to better serve its contracting customers and detail all its services – click here to check it out!