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Buffett said ... that railroad operators cannot do well unless American businesses are producing goods and customers are buying them. "It’s an all-in wager on
by davi 17y ago
Buffett said ... that railroad operators cannot do well unless American businesses are producing goods and customers are buying them.
"It’s an all-in wager on the economic future of the United States," he said in a written statement. "I love these bets."
I wonder if it's also a long-term bet about the future cost effectiveness of rail vs. long-haul trucking for shipping goods to U.S. consumers.
- catzaa 17y agoLong distance trucking is sure to loose. If the economy recovers, the oil price is sure to "recover".
- hyperbovine 17y agoThank god trains don't run on oil.
- yardie 17y agoOne train can pull 20-30 cars. How many trailers can your Peterbilt pull?
- mahmud 17y agoHere is a good article on the fuel efficiency of trains: http://www.factcheck.org/askfactcheck/can_a_freight_train_really_move_a.html http://www.factcheck.org/askfactcheck/can_a_freight_train_re...
- tocomment 17y agoBut don't trains run on electricity in a lot of places? So doesn't that make a comparison to diesel truck efficiency bogus? It's like that 400 mpg plug in hybrid we heard about a while back.
- jrockway 17y agoThere are a few commuter lines in the US that are electrified, but I don't think there is any electrified freight service. The diesel that diesel engines burn is converted to electricity to power the traction motors, however.
- catzaa 17y ago> , but I don't think there is any electrified freight service. Are you sure. I live in a third world country and most freight tracks are electrified.
- coryrc 17y agoThe United States does not have electrified freight service. Yes, our trains are worse than many third world countries.
- jrockway 17y agoNot sure how diesel trains are "worse". When you have a 1000-mile line through the middle of nowhere, it's probably better to bring the power-plant with the train, instead of having 1000 miles of wire and electrical substations sitting idle most of the time. (Overhead wires also interfere with tall railcars, like double-stack container trains.) For commuter trains, though, I am not sure why we use diesel. Lower upfront cost is my guess, which is kind of a shame. (The US has big problems with buying proper infrastructure. Much better to spend $100 million over 10 years and provide mediocre service than to spend $50 million in one year and provide excellent service for 10 years. Funding anything other than roads is politically unpopular; trains are "noisy" and we don't want more of them. Yeah... some day I will move to Europe or Japan...)
- pyre 17y agoDepends on what you mean by 'worse.' Electricity isn't automatically good. An electric train could be vastly more inefficient than a diesel train, and the way that the electricity is generated is also called into play.
- modoc 17y agoAs far as TONS moved a MILE per GALLON trains beat trucks by a pretty large factor.
- thingie 17y agoWell, they do. Railways in almost every country relies on diesel engines. Even if most of their lines are electrified, there are diesel shunters and engines for branch lines and factory sidings. And these are vital for freight transport. (Even in Switzerland with almost 100% electrification of railways.)
- ableal 17y agoWell, there are submarines running on nukes instead of diesel, but doing that on land might raise a few eyebrows ... The real point is that cost of fuel is a lower percentage of total costs for railroads (a casual search hit on a 1997 guidebook said 7.1% vs. 13.5% for trucking).
- catzaa 17y agoA lot of trains are electrified (I do not know what that situation is in the US). Also, even diesel-electric trains are much more efficient than trucks.
- wglb 17y agoWell, it likely is, but keep in mind that rail has a limited number of destinations unlike trucks, so you really need both.
- Perceval 17y agoI think his decision may be related to his favorite economic indicator: freight transportation. In an interview with ABC, Buffet said that the Freight Transportation Service Index was one of his top indicators of how the economy was doing: http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=14408432&ch=4226716&src=news http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&... Here is the TSI-Freight and -Passenger: http://www.bts.gov/xml/tsi/src/index.xml http://www.bts.gov/xml/tsi/src/index.xml Watching the flow of raw materials and manufactures around the country is probably a better indicator of economic health than looking at the speculators pump up the Dow.