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.
