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- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 21
almost missed this...
a sign of things to come?
"The introduction of new, coast-to-coast, direct domestic intermodal services between Southern California and Charlotte, North Carolina and Jacksonville, Florida.
In addition, a new service will also be launched between Phoenix, Arizona, and Atlanta, Georgia, aiming to convert over-the-road (OTR) freight to rail through a seamless product between the two railroads.
The introduction of new direct international intermodal services between the Port of New York and New Jersey, and Norfolk, Virginia, and Kansas City.
Between Phoenix and Flagstaff, two new 10,000-foot sidings will further support this growing market by enabling more efficient meet/pass operations on the route connecting to BNSF’s Southern Transcon.
“This collaboration between BNSF and CSX demonstrates the power of partnership, delivering greater flexibility, efficiency and value for our customers,” said BNSF Group Vice President of Consumer Products Jon Gabriel. “We are looking forward to these offerings providing immediate, streamlined service to the supply chain across key markets nationwide.”
https://finance.yahoo.com/news/csx-bnsf-announce-i...
No. of Recommendations: 4
This kind of partnership is fantastic. More of the benefits of merger but without the costs and headaches.
No. of Recommendations: 18
This kind of partnership is fantastic. More of the benefits of merger but without the costs and headaches.
Maybe true, but I can’t help but wonder if it’s such a great idea, why didn’t it happen long ago, and why was it (seemingly) prompted by the merger of rivals with the intention of doing the exact same thing (cost to coast seamless shipping)?
And since I know little about how that sort of thing works, can it be true that for 100 years they have shipped to a terminal somewhere in the middle of the country, dumped cars onto sidings or switching yards, and then waited for some other company to come along and hook them up and carry on?
Both companies now say that these sorts of combos will save “at least” a day in transcontinental shipping. So apparently yes, to my question above. I would think saving 24-48 hours would have been a great benefit for producers and importers; why wasn’t this done long ago? Customer benefits generally result in better outcomes; where was BNSF all this time? (The other guys too, actually.)
No. of Recommendations: 3
Maybe true, but I can’t help but wonder if it’s such a great idea, why didn’t it happen long ago
A possible reason perhaps is that company A and B had discussions but could not agree on how to share the benefits between A, B, and the customer. And, because other companies were not doing it, there was no pressure to reach an agreement.
Aussi
No. of Recommendations: 4
<<<Maybe true, but I can’t help but wonder if it’s such a great idea, why didn’t it happen long ago
A possible reason perhaps is that company A and B had discussions but could not agree on how to share the benefits between A, B, and the customer. And, because other companies were not doing it, there was no pressure to reach an agreement.>>>
Other explanations for timing of this cooperation,
1) The seamless container handoff was rather unlikely to have been a secret in the rail industry. What likely prompted UP to respond.
2)BNSF was preoccupied with building out the SoCal to Chicago network. The success of the cooperation depended on completion of that buildout.
3) Regulatory inertia until Nov 2024. Deregulatory tailwind since then.
From listening to BNSF related questions and answers at the annual meeting, the chosen path taken by management appears to be “customer first” versus “shareholder first” by UP and other competitors. Look forward to seeing which chosen path wins out in the coming decades. Especially in light of 3) above. Berkshire is uniquely positioned to make such Make-rather-than-buy decisions. The difference is captive versus borrowed capital. We’re kinda swimming in it.
No. of Recommendations: 7
can it be true that for 100 years they have shipped to a terminal somewhere in the middle of the country, dumped cars onto sidings or switching yards, and then waited for some other company to come along and hook them up and carry on?
I'm not an expert either, but as I understand it it's uncommon for an intact train to go coast to coast. What happens is that train with cars ABCDEFGHIJKLMN leaves the east coast, then in Omaha is broken up into a second train with cars ACDFJLM (plus cars OPQRS from some other train from, say, Minneapolis)) and sent on to Seattle, and cars BEGHIKN (plus TUVWXYZ) are sent off on a new train to LA.
There's a fun observation tower where you can watch all this stuff in the Omaha switching yard that makes for a good Tourist Nerd Stop next time you're traveling I-80
How they did this with any approach to efficiency in the days of hand-operated switches and paper ledgers is beyond me. I have visions of fifty tons of Florida oranges accidentally being sent off to Denver instead of Chicago
--sutton
No. of Recommendations: 2
Just a thought offered with utmost humility and respect. Timing…Reg Environment maybe…
Railroad Co partnerships didn't happen on a wider scale long ago due to Govt regulatory and historical hurdles to mergers, which a partnership can bypass.
Beyond Regulatory, seems like competitive pressures too, can accelerate innovation and collaboration in any industry.
Heck, I dunno.
Grateful Always,
PaulnKC
No. of Recommendations: 3
100 years ago, shipping patterns looked very different from what they look like today. In 1925, the Panama canal had just celebrated its 11 year anniversary, and (unlike today) all ships could physically fit in the canal. Goods would arrive on whichever US coast was closer to their final destination, and would be shipped by rail if needed. So having a system of rail transport on each side of the country, and transfer stations in the middle (if needed) made lots of sense.
Laws were in place to prevent any individual company owning too much of the railroad distribution network because railroads were your only viable option for shipping. It would be another 30 years before the US funded a highway system, with the Federal Aid Highway Act in 1956. Over the last 70 years, we've been seeing more and more shipping happening by On-road trucks, with subsidized infrastructure. Buffett acknowledged the competition that these on-road truck with "subsidized infrastructure" i.e. tax-payer funded highways. I think we need *something* to allow better competition with highway-using trucks. Personally I feel that something should be highway fees for trucks, but if it's reduced red tape for railroads maybe that's OK.
No. of Recommendations: 1
Hello ValuorGohome,
Am probably off so please expand your thinkin and help me out.
I thought rail is significantly less expensive for long distance shipping while truck, though more expensive per ton/mile, is more flexible for shorter distances, smaller loads.
Respectfully,
PaulnKC
No. of Recommendations: 3
I think to ton-mile is a metric where rail shines. It’s good for moving really heavy things really far. Trucks aren’t good at shipping something like coal, it’s too heavy for its volume. But they’re great at assorted consumer goods. What I see being built today is city-to-city warehouses where proximity to highways is the main concern and trucking is the means of transport. The distances are on the order of a day trip out and back. But these facilities are largely built without consideration to proximity to rail.
What I believe Buffett would love to see in rail is the ability for it to suck up capital at good rates. But we’ve lost the ability to build new connecting railroads between cities even though we do have the ability to build new roads. We can use imminent domain to get new highways where new rails would be impossible.
