Reason #45,453 Why I Love To Blog -- October 8, 2015

One of the first equity investments I ever made -- decades ago -- was buying shares of Burlington Northern (BNI). I vaguely remember buying shares in five different publicly traded companies; BNI was one of them.

I had a lot of fun following BNI over the years. I have a clipping somewhere of a front page story in The Wall Street Journal -- this was before it was available on-line -- about the race between BNI and Union Pacific to have the first dual track rail from Chicago to Los Angeles. Wow, that must have been back in the late 1980's, maybe 1990's; I forget. But it was quite a race to see which railroad would be first.

Then two years ago I ran into a BNSF honcho while attending a swimming meet. I mentioned that story, and congratulated him on his company being the first, winning the race, beating Union Pacific. He said BNSF wasn't quite there. I was somewhat dumbfounded. Two decades and they still weren't there. I wasn't sure if he was accurate in his response.

Yesterday, a reader sent me a link to a Crain's/Chicago Business story: 

After this year, BNSF Railway Co. will be more than 99 percent finished with a second, parallel line to its 2,200-mile (3,500-kilometer) Los Angeles-to-Chicago route. Doubling up will create a rail superhighway speeding deliveries of toys, electronics, autos and other goods, because trains won't have to yield to each other on sidings as they do on single tracks.

Snatching consumer products and other freight from big rigs is more crucial than ever. Coal, once a pillar of U.S. rail traffic, is fading as utilities burn cheaper and cleaner natural gas. Average weekly carloads are down 20 percent from five years earlier, according to data compiled by Bloomberg.

The Los Angeles-to-Chicago route links the busiest U.S. container port to the biggest mid-continent rail hub, giving BNSF a leg up in the race to find alternatives to those dwindling coal cars. And there's room to grow: consultant FTR Transportation Intelligence estimates that trains now move only about 19 percent of the 71 million trailer loads that travel 550 miles or more, a rough threshold for where rail becomes an viable option.

“We have significant opportunities to convert” truck cargo to rail, said Katie Farmer, chief of BNSF's consumer group. “We've really narrowed the gap now between what was traditionally rail service and over-the-road trucking.”

That's where the dual tracks come in. More and longer trains can be run on two tracks than on a single line. Once the double-tracked section in Oklahoma is completed at the end of October, BNSF will have just seven more miles of line to build — involving three costly bridges — and will be able to run 78 trains a day in that region, up from 62 now.

With no need to pull over, they can also go faster. A BNSF train laden with truck trailers now can make the Los Angeles- Chicago run in 64 hours, said consultant Jindel. Completing the twin-tracking will shave off as much as three hours, he said.

XPO Logistics Inc., an arranger of shipments for customers such as Costco Wholesale Corp., figures that about a third of the long-haul freight that it now sends by truck is a candidate to switch to train, Chief Strategy Officer Scott Malat said. If that rule of thumb were applied across the industry, there could be more than $100 billion of business up for grabs by railroads, he said.

Much more at the link.

Now that BNSF has been bought by Warren Buffett it's harder to get updates on BNSF. A big thanks to the reader for sending me this link.