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April 12, 2008


Josh Strupp

I don't think that I would put too much stock (stock, get it) into Mr. Buffet's interest in commercial rail companies. Although i'm sure that Buffett knows what he's doing, rail freight, as it exists today, is a terribly inefficient method of transporting freight from point A to B. Put something on a train today and watch your cargo sit on a rail siding for weeks on end until the rail company gets around to it. Good luck telling your customer that his cargo will get there, "whenever Canadian Pacific get around to it". In this day and age of "just in time delivery" commercial rail is the stagecoach. If your are looking for a more fuel efficient method of transportation, fine. But I would find it a bit of a stretch to use Buffett's interest in commercial freight companies as an example of a shift in transportation methods.

John Michlig

Josh, I would be interested to know the basis for your "terribly inefficient method" theory. That may be true in AMERICA, but look at railroad (for people and products) in almost any other developed country where the oil lobby doesn't set policy.

I hope you aren't looking at this the way Milwaukee looks at bus service: We strangled it, so now it's unworthy of improvement.

Zach W.

I'm torn on this, because while I have to acknowledge Warren Buffett's genius when it comes to investing, American rail has typically lagged behind its counterparts in other parts of the world - Europe, for instance - and I'm just not sure if I buy what Warren Buffett's selling.

Oh my Gosh

Not knowing Josh's own (first person?) experience it's hard to question it.

As a regular customer of rail service my experience has been quite the opposite. There may be some stickiness at times but it is usually coming out of Long Beach and has more to do with port logisitics and capacity.

Rail is certainly positioned to make a major comeback for long hauls and companies with a multimodal capability should do very nicely.

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