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Rising Trucking Rates Drive U.S. Companies Back to the Railroad
High fuel prices and rising truck rates are leading shippers to opt for slower, cheaper intermodal transit

American retailers and manufacturers are learning to love trains again.

Companies abandoned the rails in recent years because trucking was a faster, more secure way of moving furniture, food and electronics across the country.

Now that trucking rates are climbing toward their highest levels in four years, some businesses are deciding a slower, cheaper route across the country suits them fine.

“Everybody’s exploring intermodal,” said Milton Magos, vice president of Mexico operations at freight brokerage Traffix. “They want to know how they can make their supply chain more reliable.”
https://www.wsj.com/logistics-report/rising-trucki...

I know it’s easy to say “why don’t they fix this”, but given the huge disparity between the freight capabilities of a single trainload and 30 or 40 18-wheelers, it seems that the differential should be so big that it would never go away, except in a few “super-time-critical” cases.

But, as people have said to me, “what do you know?”, and sometimes I have to agree with them.

I recall a quote from Warren Buffett during the purchase of BNSF that a ton of freight could be moved by rail from San Francisco to Los Angeles by a gallon of diesel. (~$2.50 to $3.50 at today’s WTI spot price)
This is confirmed by An AI inquiry…

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“Because a single gallon can move a ton of freight 470 miles, you could absolutely transport that ton all the way from San Francisco to Los Angeles on a single gallon of diesel—with nearly 100 miles worth of fuel to spare. 
Buffett loved this metric because it perfectly illustrated a massive economic "moat" and a win-win for society:
Cost Efficiency: It is roughly three to four times more fuel-efficient than moving freight by truck. 
Environmental Impact: If just 10% of the freight currently moving on crowded U.S. highways were diverted to rails, it would save over 1 billion gallons of fuel a year. 
It's one of those classic Buffett insights where a single, simple data point completely reframes how you look at a giant, traditional industry.”

ciao

There are a bunch of very good writings in the railroad journals of late, all go far-far-far beyond the old thinking, multiple clear problems as to what has derailed the rails. You simply won't get there thinking Hunter Harrison, that's dead-in-the-water out of date thinking. It is going to take some upheavals and new energy to get things to stick to the rails and not go right back to trucking. Cut-cut-cut to make a quarterly OR? That's called failure.

It's one of those classic Buffett insights where a single, simple data point completely reframes how you look at a giant, traditional industry.

Charlie Munger talked about the need to have a very (very) large store of general knowledge, so as to be able to occasionally connect seemingly unrelated points from different disciplines. Mental models, he called them.

A couple of weeks ago Jim/mungofitch described an approach that reminded me, again, of the albatross energy budget (1): make it look easy by harvesting a little bit from each updraft, avoid the downdrafts, and before you know it you're never needing to land again.

That, plus knowing enough history to where now and then you can't help but hear the rhyming in real time, plus simply anticipating where other peoples' incentives will necessarily lead them -- seems to work. Mostly.

-- sutton

(1) https://www.shrewdm.com/MB?pid=768093605

Water logistics (bulk ore/oil/container ships) is similarly more efficient than rail. Wonder if BRK will ever consider becoming sea shipping magnates?

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