Buffett buying Railroad

[Kuyuk]

Interesting.

While I think railroads are an important mode of transportation, I still think they're becoming outdated as we're not upgrading our rail system in par with other nations (EU/Japan/Asia).

But, as the majority of Burlingtons business is with freight, I'm not sure how the upgrades would affect it.

I find it interesting though.

http://www.msnbc.msn.com/id/33599744/ns/business-us_business/

[Cephalopod]

I'm pretty sure he's just playing the game 'Monopoly' on a very large scale.

[TheEschaton]

LOL, now that he owns all the board, he might as well snatch up the railroads and utilities for some pocket change?

[Kuyuk]

haha, that was pretty good ;p

[bluesmith]

IMHO, rail is an extremely efficient way to transport freight...what do the adds say? A gallon of diesel can move a ton of freight 400+miles...it seems inevitable that freight will continue to be viable, esp vs. trucking as fuel costs slowly creeps up (alongside world-wide demand).

[pabstblueribbon]

While I think railroads are an important mode of transportation, I still think they're becoming outdated as we're not upgrading our rail system in par with other nations (EU/Japan/Asia).

But, as the majority of Burlingtons business is with freight, I'm not sure how the upgrades would affect it.

I work in the rail industry. Rail transportation is the MOST fuel efficient way to transport goods. Period. Alot of the money being injected will go towards positive train control. In fact half of the railroad that I'm currently working fors capital expenditures will be set aside for it since it is an FRA mandate that all tier 1 railroads comply with it by 2015. Basically its an update to the 'wayside' system. The problem with the wayside system is that it relies on a box set off the train to transmit this data and with this system you get 'dark zones' that simply don't have the waysides.

The new system keeps track of the trains vital statistics, brake pressure, location, whether its been thrown into emergency, etcetera. It then bypasses any wayside system because its 'train to train' sorta like peer to peer. If a train goes into emergency or has a fault, or is stopped for any reason, it will transmit its data to any trains nearby which will then determine if it needs to stop without human intervention.

There are ALOT of upgrades going on with the rail industry. Not only this, we also do alot of EPA mandated upgrades that reduce fuel consumption. Trains do NOT have anti-freeze in them and during the winter they run 24/7 to keep the water from freezing. New systems we are installing automatically start or stop the engine based on several parameters. There are also auxillary power units that are little engines/generators that shut down the main and do all the charging/heating which greatly reduce fuel consumption.

Quite a few of the old timers are really scared about the PTC systems because they think they are going to reduce their crew size from conductor/engineer to just the engineer (or worse, totally automate them). I think its unfounded because right now its an FRA law that there has to be two people on the train.

Trains always are slow growth but steady and will be around forever. With the reduced freight we've seen last year they are putting a lot of capital into making them more efficient and Buffet knows this.

Also, the trucking industry right now is operating at a loss just to keep buisiness. The trucking industry is the one thats seen the most drastic decline in revenue.

[NocturnalRob]

it really has nothing to do with efficiency. it is more in line with what Kuyuk said. the infrastructure of the US rail system is shit. It doesn't matter that it's efficient if it's not taking the freight where it needs to go.

Maybe Buffett's plan is to introduce the monorail freight system. Monorail? Monorail.

[pabstblueribbon]

Yeah, because you guys work in the rail industry. It is about efficiency. BNSF has nothing to do with passengers or monorails whatsoever. His gamble is that with all the government money being injected into the railroads and if they get their efficiency up and can operate and turn a nice profit while traffic is down then imagine what the profits will look like when freight levels return to normal.

[NocturnalRob]

OMG, it's like...because we don't play professional baseball, we don't know anything about it!! OMGZ.

i'm not arguing with you, man. I'm just saying that Buffett's investments these days have been assbackwards.

He's a fucking genius though, so I'm not going to put too much thought into it.

MONORAIL!

[Tisket]

It doesn't matter that it's efficient if it's not taking the freight where it needs to go.

How do you mean? There are railroad tracks literally everywhere.

[pabstblueribbon]

OMG, it's like...because we don't play professional baseball, we don't know anything about it!! OMGZ.

i'm not arguing with you, man. I'm just saying that Buffett's investments these days have been assbackwards.

He's a fucking genius though, so I'm not going to put too much thought into it.

MONORAIL!

You obviously don't know shit about the rail industry.

[NocturnalRob]

How do you mean? There are railroad tracks literally everywhere.
tracks for human transport do not always equal freight transport.

arguing with PBR is like arguing with a guy who gets fucking apeshit when a girl he's known for a week doesn't return his calls after a day...

[Tisket]

arguing with PBR is like arguing with a guy who gets fucking apeshit when a girl he's known for a week doesn't return his calls after a day...

lol

[pabstblueribbon]

tracks for human transport do not always equal freight transport.

arguing with PBR is like arguing with a guy who gets fucking apeshit when a girl he's known for a week doesn't return his calls after a day...

Damn you. I didn't go apeshit!

But let me reiterate this for you, Buffet doesn't give two shits about the human transport rail infrastructure. No money in it.