Western Railroad Discussion > Well, that didn't take long ...

New Berkshire CEO: BNSF needs to improve its profitability - FreightWaves

I believe Buffett started saying that too just before he retired. I saw those recent numbers indicating BNSF traffic overall, especially intermodal,.is up, except for coal, but that doesn't seem to square with reports that its volumes on ex-GN over Stevens Pass, BNSF's main east-west line across Washington State, have been way down lately. Even with the lighter freight volume, it looks like they've been having trouble keeping the Empire Builder on time, even when it leaves Seattle and Spokane on time (schedule padding does often make up for that at the end points).

The Cult is so obsessed with OR, no matter what they tell the STB or the customers, that they are willing to kill the whole damn industry to get some “ Magical” quarter and Jim Cramer runs around like a lunatic telling everyone that RR stock X is $500 a share!

BUY! BUY! BUY!!!

This will not end well, and the worst part is that those responsible for the destruction of our nation will not be held accountable.

Regards

Posted from iPhone

> ex-GN over Stevens Pass, BNSF's main
> east-west line across Washington State

Not the point of the thread, but I'd argue that the Vancouver-Pasco-Spokane line (ex-SP&S, ex-NP) is truly the BNSF mainline across Washington. Train count there seems much higher.

Here' a proposal. On certain essential industries such as railroads we could establish a board comprised of three members. Approval from the board for acquisition of more than one percnet of the stock would have to be approved by the board comprised one member from stock holders, one member from labor and one member from customers. This would not help the BNSF ,but UP NS and CSX would be protected from the scourge of hedge funds. Railroads in the past were run by railroaders and not greedy hedge funds who end up destroying vital industries that our economic well being depend. Bill Webb

yorknl Wrote:
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> > ex-GN over Stevens Pass, BNSF's main
> > east-west line across Washington State
>
> Not the point of the thread, but I'd argue that
> the Vancouver-Pasco-Spokane line (ex-SP&S, ex-NP)
> is truly the BNSF mainline across Washington.
> Train count there seems much higher.

i cannot disagree, but routing trains from the Seattle metroplex, (South Seattle, Auburn and Tacoma,) south through Vancouver, Washington to go east, leaving Stampede and Stevens lightly used seems a little counter productive.

a737flyer Wrote:
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> yorknl Wrote:
> --------------------------------------------------
> -----
> > > ex-GN over Stevens Pass, BNSF's main
> > > east-west line across Washington State
> >
> > Not the point of the thread, but I'd argue that
> > the Vancouver-Pasco-Spokane line (ex-SP&S,
> ex-NP)
> > is truly the BNSF mainline across Washington.
> > Train count there seems much higher.
>
> i cannot disagree, but routing trains from the
> Seattle metroplex, (South Seattle, Auburn and
> Tacoma,) south through Vancouver, Washington to go
> east, leaving Stampede and Stevens lightly used
> seems a little counter productive.

Traditionally, the line over Stevens Pass has been limited to about 20 trains a day due to Cascade Tunnel ventilation.  This, combined with the 2.2% ruling grades, required some trains, such as unit coal and grain trains, to be run via Pasco.  Can we get an update on how things may have changed?   BSB

 It's worth noting that Stampede Pass has clearance issues; Plate C only.

spider1319 Wrote:
-------------------------------------------------------
> Here' a proposal. On certain essential industries
> such as railroads we could establish a board
> comprised of three members. Approval from the
> board for acquisition of more than one percnet of
> the stock would have to be approved by the board
> comprised one member from stock holders, one
> member from labor and one member from customers.
> This would not help the BNSF ,but UP NS and CSX
> would be protected from the scourge of hedge
> funds. Railroads in the past were run by
> railroaders and not greedy hedge funds who end up
> destroying vital industries that our economic well
> being depend. Bill Webb

In the old days, the Interstate Commerce Commission oversaw railroads and controlled things like takeovers, failure to deliver required services, rate complaints, and qualification of senior officers and directors. Events like the Rock Island or any mergers, abandonment of lines, even proposed sale of bonds or stock had to be cleared. "Control" and joint operation was always a subject of interest.

That was also true of telephone and telegraph companies, electric companies, etc.  The combination of Jimmy Carter's Alfred Kahn deregulation and Ronald Reagan's dismantling of regulatory process put an end to some of that.

Also in favor of the longer routing from the Seattle/Tacoma area east via the Columbia River Gorge is the absence of Stampede's and Stevens's mountain grades. And, for carload traffic, routing by way of the Pasco hump yard may have some advantages.

It's no accident that Stampede's only traffic nowadays is eastbound - that is, empty and lighter - grain, oil and coal trains.

There was another thread discussing this 2 days ago. No link provided, and shouldn't be provided. New thread gives me opportunity to ADD MORE SNARK. I'm sure y'all enjoy that.

Excerpt from the article:

Abel’s letter indicated that the core principles Buffett set remain intact – including letting the conglomerate’s companies have a large degree of autonomy.

Uh, huh. Ask Matt Rose if he was allowed autonomy. His "parting shot" cautioning against PSR 6-7 years ago says otherwise.

Railroad is NOT an energy company, nor an insurance company. Energy is a necessity (demand is ALWAYS there), but railroad is less so.Insurance companies can calculate risk, set premium based on risk, refuse customers who are too risky. No common carrier obligations like the railroads.

BRK 's core business is insurance, now led by MidAmerican Energy CEO. Greg Abel was so lucky he was allowed more autonomy than Matt Rose, and I dare say that energy is easier money than railroading.

The article cites numbers that show BNSF is healthy in terms of revenue, profit, and volume. If BNSF doesn't do anything stupid and sustain this through economic cycles, that's a good thing.

BNSF’s 2025 operating ratio of 65.5% was 5.7 points behind the 59.8% performance of western rival and industry leader Union Pacific.

I'm sincerely hoping he said this tongue-in-cheek. Otherwise, who wants to race to the bottom? Greg Abel will need to stalk the President for a public brown-nosing session (like UP), if he's serious about "racing" for the best ratio. LAME!

In Japan where railroading is a healthy industry, Operating Ratio is a tool for measurement, not an end goal, for example identify segments of the railroad that has operational issues, like congestion, reasons for high cost. You know, OPERATING ratio? Depending on severity of OR, a railroad can justify subsidizing a segment's cost using profitability of other segments, so the railroad network is kept intact. If the OR is too high, and can't help the rest of the network, that segment can be abandoned.

I can go on, but it's too complicated for non-railroader like Greg Abel. I'm sure he's a quite capable CEO otherwise.

This is one of the best threads I've seen in a long time. I too would argue that the ex-SP&S is the real BNSF mainline to the Northwest. A tonnage map would certainly support that view.  And I'd say Carter was by far the worst President the U.S. ever had in terms of transportation. Tragically, his disgraceful deregulation-stained legacy (and Reagan's deepening of it) is still crippling American transportation all these years later. And I still don't think any railroad operating ratio should be under 70. Actually, even that's probably too low to run a railroad properly.

NPRocky Wrote:
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> And I still don't think any railroad operating ratio
> should be under 70. Actually, even that's probably
> too low to run a railroad properly.

By arguing OR ("shouldn't be under 70"), your argument is trapped. Entire railroad's operative effectiveness can not be measured with a dumb math like OR. Railroad simply has to be profitable enough to cover costs, pay salaries, maintain the physical plant, and so forth. Profits beyond that can fund infrastructure improvements, invest for operational growth (instead of buybacks to manipulate stock price growth), pay bonuses, pay dividends (Wall St. idiots, haha), and so forth.

Berkshire Hathaway don't pay dividends to their shareholders, so they don't have that burden UP do. Anyway, quarterly and annual reports didn't make OR an obnoxious headline before. How did railroads survive?  Wall St. idiots now blindly cling to OR. Can you say brainwash? Don't join them.

Just a single example, but BNSF runs several trains between SoCal and Atlanta area per day, with run through agreements. UP has just one pair, the ZAILA/ZLAAI, and currently, a short train. Even if UP might have better OR than BNSF, BNSF has the volume, and hence more business. Pretty obvious who runs the better business. OR (70 or not) is irrelevant.

cchan006 Wrote:
> Just a single example, but BNSF runs several
> trains between SoCal and Atlanta area per day,
> with run through agreements. UP has just one pair,
> the ZAILA/ZLAAI, and currently, a short train.
> Even if UP might have better OR than BNSF, BNSF
> has the volume, and hence more business. Pretty
> obvious who runs the better business. OR (70 or
> not) is irrelevant.

The Atlanta Z's are often "short" in early week.   Mid to late week they often get a mid train dpu set.  They just recently picked up some traffic from Estes, probably away from BN.  Also I believe some of the LA-Atlanta traffic has to be carried on the Memphis Z's to NS there because of siding restrictions on the speedway and due to a uninating war between Creel and Vena.  

Interesting point about OR. By the way, east-west railroad operations in the Northwest really haven't changed much over the years.  Traditionally, Centralia was the NP dividing line for traffic going east. Eastbound traffic originating north of there went via Stampede. Traffic originating south of there went through Vancouver, WA, then east on the SP&S. There were exceptions, but generally, that was it. Tri-level auto racks on the NP had to go via Vancouver in all cases because of the clearance problems on Stampede. After the BN merger, they could go over Stevens Pass, as it didn't have clearance issues. Mr. Eden also said parts of the BNSF could be for sale. Wouldn't it be nice to get the NP or GN back!

yorknl Wrote:
-------------------------------------------------------
> Also in favor of the longer routing from the
> Seattle/Tacoma area east via the Columbia River
> Gorge is the absence of Stampede's and Stevens's
> mountain grades. And, for carload traffic,
> routing by way of the Pasco hump yard may have
> some advantages.
>
> It's no accident that Stampede's only traffic
> nowadays is eastbound - that is, empty and lighter
> - grain, oil and coal trains.


Stevens Pass (GN): Both directions: Seattle-Chicago Z-trains and Q-trains. Westbound: marine stack and Q-trains, one wb vehicle train. Eastbound: Empty coal and oil trains, few stack trains.
Stampede Pass (NP): All eastbound empty grain and oil trains.
Columbia River Gorge (SP&S): Both directions: Portland-Chicago Z-trains and Q-trains, vehicle trains, all PNW carload freight trains.  Eastbound: some empty grain trains.  Westbound: All PNW loaded unit trains (grain, oil, and coal).

The Columbia River gorge is constrained for capacity as it's a single track railroad and virtually impossible to add double track and/or sidings due to topography and conservation area restrictions.



Edited 1 time(s). Last edit at 03/05/26 14:40 by Ticeska.