Friday, May 30, 2008

Future Looks Good! How About the Present?

Matt Rose, Grand Pharoah of the BNSF Railway, was quoted today in an interesting Associated Press article that ran pretty much nationwide concerning the future of railroads. Long story short, he predicts major gridlock in the not-so distant future. This is news, because there are still many who cannot get their arms around the fact that the Railroad Industry is a growth industry today, unlike the paradigm of the 1950's thru the 1980's. These people are not as enlightened as Warren Buffett and Jim Cramer, who do understand exactly what Mr. Rose is discussing here.

"It's getting busy out here!"

Question is, does Railroad Management understand what such growth means? Moreover, do the bankers and major investors understand as well? How will all of them grasp the interface of the intense Capital Expenditure required to simply maintain the railroad with the major Capital for expansion that will be needed?

Frankly, I don't think the message is understood by these folks. If it was, properties like Matt Rose's BNSF would not have cut Capital Expenditures for '08. Now that Mr. Rose is spearheading the case for the money needed to increase rail capacity so that rail gridlock can be avoided, let's see if he can be as effective in convincing the beancounters to spend some money now rather than tomorrow. I can guarantee that the total expenditure is going to be less.

Thursday, May 22, 2008

The Last Spike

This month marks the 139th Anniversary of the driving of the "Last Spike" at Promontory Summit, Utah. Many people today easily acknowledge the significance of the occasion so many years ago, but have not updated their perception of railroad track construction as performed today.

In order to correct that, I offer two photos that demonstrate the hugh difference between "then" and "now".

As it once was:

And, as it is now
(courtesy Harsco Track):

If required, please update your paradigms accordingly!