In 1968 the company was reorganized as the Delaware and Hudson Railway, and was bought by Dereco, a holding company owned by Norfolk and Western Railway which also owned the Erie Lackawanna Railway. Following the bankruptcy of numerous northeastern U.S. railroads in the 1970s, including D&H and E-L, N&W lost control of Dereco stock. E-L petitioned for and was included in the formation of the federal government's nascent Consolidated Rail Corporation (Conrail), while D&H was again made an independent railroad. In 1980 Conrail sold the former DL&W Mainline from Binghamton to Scranton to the D&H; Being a flatter more direct route to Scranton, this allowed the D&H to abandon their famed Penn Division between Carbondale, PA and the connection with the ex Erie/EL at Jefferson Junction. The reason the D&H was left out of Conrail was to maintain a semblance of competition in the northeast. While the success of this move has often been discredited since the D&H was simply too small to ever compete with all of the markets served by Conrail, the railroad was able to double in size by being granted trackage rights over Conrail reaching Newark, Philadelphia, Buffalo, and Washington, D.C. The remainder of the Penn Division from Lanesboro, PA to Nineveh, NY was later abandoned after the Belden Hill tunnel was enlarged in 1986.
In 1984, Guilford Rail System purchased the D&H as part of a plan to operate a larger regional railroad from Maine and New Brunswick in the east, to New York and the Midwest in the west, Montreal in the north, and the Philadelphia/Washington, D.C. area in the south. For only $500,000, Guilford purchased the entire railroad, lock, stock and barrel. The price tag reflected the horrid financial shape and the condition of the physical plant. At the time of the purchase, the D&H had little freight traffic, relying on Federal and State money to keep operating. Guilford's plans for expanded service did not come to fruition, and after two intense labor strikes, Guilford declared the D&H bankrupt in 1988, abandoning its operation. Lackawanna County, Pennsylvania, purchased the line south of Carbondale to Scranton and serves a growing number of industries in the valley under the auspices of designated-operator Delaware-Lackawanna Railroad.
With the D&H in limbo, the federal government ordered the New York, Susquehanna and Western Railway to operate the D&H under subsidy until such time as a buyer could be found. Guilford claimed that the D&H had assets of $70M at the time of the bankruptcy. In 1991, the Canadian Pacific Railway purchased the D&H for $25M to give the transcontinental system a connection between Montreal and the New York City metropolitan area.
Under CPR, the condition of the D&H trackage was upgraded significantly (much excess track was removed), although for a time the D&H was again in limbo and in 1996 CPR placed it and other money-losing trackage in the eastern U.S. and Canada into a separate operating company named St. Lawrence and Hudson Railway. In 2000, the St.L&H was merged back into CPR. The D&H is, and has been, a difficult money-making venture for some time. Originally constructed as a coal hauling route and when that business declined it proved difficult to turn a profit. It operates in some of the most rural areas of New York State, and very few industrial customers between Binghamton and Rouses Point remain. The railroad's current prognosis is arguably better than it has been in a long time. Along with the NYC connection, haulage agreements with other railroads are greatly increasing traffic. Recently, CP has started using their new high power AC traction locomotives on the line, instead of their aging SD40-2 models. This is an indication of the increasing importance of reliable service. There are also major signal and track projects underway to modernize the D&H.
Nicknamed "The Bridge Line to New England and Canada," or just "The Bridge Line," the D&H has several unique spots in North American railroading history.
As of 2012, various trackage and haulage rights have been given to Norfolk Southern Railway over the D&H between Sunbury, PA and Mechanicville, NY. NS has incorporated the D&H route into their "Patriot Corridor" and currently the majority of the traffic on the D&H is that of the NS.
Major changes are in the works for the D&H, as upper level management at the Canadian Pacific has changed and are attempting to improve all aspects of the company.
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