When it comes to the long-distance transportation of goods in the
Perceptions aside, there are several reasons why the railroad business is evolving for the better. First, with the consolidation of the players over the past quarter century, the competitive dynamics within the industry have been gradually improving. Second, the industry has embraced the use of technology to improve customer service, operating efficiency and shareholder returns. From a broader value chain perspective, the railroad industry operates as a high fixed cost, low variable cost provider while the trucking industry generally functions in an environment that involves lower fixed costs and higher variable costs. In our view, these basic structural differences that allow the rails to move goods at less cost while consuming less energy are likely to advantage the rails in periods of inflation and rising variable costs.
Shares of Berkshire Hathaway have recently treaded water as the investment community has seemed preoccupied with the task of interpreting some “hidden message” in the timing and/or structure of the