Railroads

[Junior R]

any reason why CP and CNR are down big today

[Marco Van Basten]

3 hours ago, Junior R said:

any reason why CP and CNR are down big today

Rumours of UNP bidding for CSX/NSC and then Berkshire bidding for the other one.  That will increase competition for CP/CNI.  

[Spekulatius]

5 hours ago, Marco Van Basten said:

Rumours of UNP bidding for CSX/NSC and then Berkshire bidding for the other one.  That will increase competition for CP/CNI.  

I thought we are done with RR mergers. Going from 4 to 2 would reduce competition substantially.

[Marco Van Basten]

1 hour ago, Spekulatius said:

I thought we are done with RR mergers. Going from 4 to 2 would reduce competition substantially.

I thought so too

[fareastwarriors]

Union Pacific Is Said to Near Deal for Norfolk Southern

[dealraker]

1 hour ago, fareastwarriors said:

Union Pacific Is Said to Near Deal for Norfolk Southern

Although the Norfolk Southern stock I own is that from my grandmother and thus has been "in the family" now for over 84  years (I inherited 1/27th of it in 1976) I have no nostalgia as to owning it.  The railroads need to do something to grow sales and volumes as these have stalled overall now for years.  I'm in favor of whatever makes the business better for shareholders and customers.

 

Two or so years ago my cousin Tom Smith, a fabulous and bright CPA, researched our holdings and said we'd gotten a 12% annual return since the original investment.

[dealraker]

I'd not be surprised if the merger was greatly affected by the president's input whether it be shipping rates or whatever, the number of ways this could go politically are many.  That would likely be discussed on the politics page, not here.  But this is a place I'd think lots of attention could be gained if desired.  

 

Personally I think having 2 US rails nationwide would be good/efficient for the country in the long term.

[sleepydragon]

Curious how brk is going to be affected by this? Will brk be a forced buyer of the remaining rail or be a bargain buyer of the forced seller? And seems this might take at least a year to close if any deal is announced? What if brk sit still? 

[Marco Van Basten]

3 hours ago, dealraker said:

I'd not be surprised if the merger was greatly affected by the president's input whether it be shipping rates or whatever, the number of ways this could go politically are many.  That would likely be discussed on the politics page, not here.  But this is a place I'd think lots of attention could be gained if desired.  

 

Personally I think having 2 US rails nationwide would be good/efficient for the country in the long term.

We need to discuss it here.  The politics section is unfortunately no longer relevant to investing.  Out of 100 posts, there is one that might have a bearing on investing, so it is easy to miss.  

[Marco Van Basten]

1 hour ago, sleepydragon said:

Curious how brk is going to be affected by this? Will brk be a forced buyer of the remaining rail or be a bargain buyer of the forced seller? And seems this might take at least a year to close if any deal is announced? What if brk sit still? 

I don't think that Berkshire will be allowed to buy shares of any railroad companies due to ownership of BNSX.  They might be allowed to buy CSX as  a whole, but at the time of purchase of CSX, I think it had to sell shareholdings in other railroads.

[Spekulatius]

4 hours ago, dealraker said:

I'd not be surprised if the merger was greatly affected by the president's input whether it be shipping rates or whatever, the number of ways this could go politically are many.  That would likely be discussed on the politics page, not here.  But this is a place I'd think lots of attention could be gained if desired.  

 

Personally I think having 2 US rails nationwide would be good/efficient for the country in the long term.

I think this is true but the efficiency gains don’t go to customers. The rails have been taking pricing quite aggressively for many years.

 

The best way to increase efficiency would be to spin the rail infrastructure  to a National rail REIT and have everyone compete with their own trains on the same terms on the same rail network. Then the rails would be more similar trucking.

[dealraker]

5 hours ago, Spekulatius said:

I think this is true but the efficiency gains don’t go to customers. The rails have been taking pricing quite aggressively for many years.

 

The best way to increase efficiency would be to spin the rail infrastructure  to a National rail REIT and have everyone compete with their own trains on the same terms on the same rail network. Then the rails would be more similar trucking.

Yes to the first paragraph.  The second one Ralf seems ideal but impossible to me.  

[KPO]

6 hours ago, Spekulatius said:.

The best way to increase efficiency would be to spin the rail infrastructure  to a National rail REIT and have everyone compete with their own trains on the same terms on the same rail network. Then the rails would be more similar trucking.

Rail is single threaded more times than not, unlike the government sponsored multi-lane interstate highway system, so this won’t work. This is coming from a guy that lives near single threaded railroad tracks that require us to take the long way 1 out of 5 times due to trains parked near our crossing. 

[Spekulatius]

There is a nice map of the RR system here and indeed it seems any given territory has only 2 Rr competing with each other and the eastern RT (NSC, CSX ) barely have any overlap with the western ones (BNSF, UNP). CSX/ NSC have way more overlap than BNSF/UNP.

 

So in away a merger between the eastern RR NSC and UNP makes sense but I think it will also force BNSF hand to do likewise with CSX

https://www.arcgis.com/apps/mapviewer/index.html?webmap=96ec03e4fc8546bd8a864e39a2c3fc41

 

 

[Spekulatius]

9 hours ago, KPO said:

Rail is single threaded more times than not, unlike the government sponsored multi-lane interstate highway system, so this won’t work. This is coming from a guy that lives near single threaded railroad tracks that require us to take the long way 1 out of 5 times due to trains parked near our crossing. 

Why does it matter if the track is one way or two way? If the ownership structure changes the track still remains the same.

 

I agree it that putting all the track into under own ownership isn’t politically viable but it for sure would be more efficient and also stimulate competition, assuming a sensible fee structure  for usage.

Edited July 28, 2025 by Spekulatius

[KPO]

13 hours ago, Spekulatius said:

Why does it matter if the track is one way or two way? If the ownership structure changes the track still remains the same.

 

I agree it that putting all the track into under own ownership isn’t politically viable but it for sure would be more efficient and also stimulate competition, assuming a sensible fee structure  for usage.

I think it makes things more complicated as a practical matter. It’s very hard to optimize usage if you constantly have to offload trains at switching yards with few places to do it, but I suppose you could build more switching locations like the large east to west switching yards in Chicago and KC. 

[benbuffett]

Any of you knowledgable peeps familiar with Allegheny & Western Railway Co. (AWRY) or The Adrian & Blissfield Rail Road Company (ADBF). I own a few shares of AWRY pays nice divy. Google gemini says that ADBF trades on pink sheets but I dont see it. Website doesn't seem to show that it trades.

 

https://www.awrail.com/

https://abrailroad.com/railroads/adbf/

[gfp]

1 hour ago, benbuffett said:

Any of you knowledgable peeps familiar with Allegheny & Western Railway Co. (AWRY) or The Adrian & Blissfield Rail Road Company (ADBF). I own a few shares of AWRY pays nice divy. Google gemini says that ADBF trades on pink sheets but I dont see it. Website doesn't seem to show that it trades.

 

https://www.awrail.com/

https://abrailroad.com/railroads/adbf/

 

Adrian & Blissfield sold in 2021 to Chris Bagwell's Transportation Holdings llc and isn't traded anywhere that I know of

[benbuffett]

12 minutes ago, gfp said:

 

Adrian & Blissfield sold in 2021 to Chris Bagwell's Transportation Holdings llc and isn't traded anywhere that I know of

Thanks  gfp!

[dealraker]

This thread began with my "OR ain't gunna cut the mustard no more."  Slowly but surely the RR investing world is awakening.

 

https://www.trains.com/pro/freight/class-i/union-pacific-norfolk-southern-big-merger-same-old-problem-analysis/

[no_free_lunch]

Just wanted to pop in and say CN rail, CNR.TO, is dirt cheap.   Yes there are tarriffs and I dont know the immediate future but they are trading around 17x earnings and its a monopoly.  I wont try to finesse the details but I see it as severely undervalued which is very hard to find these days.   I feel it could move up 30-40 pct over the next year and would still be reasonably price.

 

I who know but speculating I could see it hitting 15-16x earnings the next year which would open a huge run way, not that we can expect it to play our right away.   Has been trading much higher, almost 40-50% earlier this year.   I do not see many opps like this tbh...

Edited September 22, 2025 by no_free_lunch

[hasilp89]

Apologies if it has already been mentioned somewhere but is there a railroad history book (similar to Yergin's The Prize) that anyone would recommend.

 

 

[MxMI17]

5 minutes ago, hasilp89 said:

Apologies if it has already been mentioned somewhere but is there a railroad history book (similar to Yergin's The Prize) that anyone would recommend.

 

 

It is probablly not you are looking for exactly, but If you have not read Railroader, Hunter Harrisons biography, I would higly recommended. He is a legend in the industry

https://www.amazon.com/dp/1989025048/?bestFormat=true&k=railroader&ref_=nb_sb_ss_w_scx-ent-pd-bk-d_k0_1_10_de&crid=8IREN37S2BQG&sprefix=railroader

[hasilp89]

2 minutes ago, MxMI17 said:

It is probablly not you are looking for exactly, but If you have not read Railroader, Hunter Harrisons biography, I would higly recommended. He is a legend in the industry

https://www.amazon.com/dp/1989025048/?bestFormat=true&k=railroader&ref_=nb_sb_ss_w_scx-ent-pd-bk-d_k0_1_10_de&crid=8IREN37S2BQG&sprefix=railroader

thank you!

[Marco Van Basten]

1 hour ago, no_free_lunch said:

Just wanted to pop in and say CN rail, CNR.TO, is dirt cheap.   Yes there are tarriffs and I dont know the immediate future but they are trading around 17x earnings and its a monopoly.  I wont try to finesse the details but I see it as severely undervalued which is very hard to find these days.   I feel it could move up 30-40 pct over the next year and would still be reasonably price.

 

I who know but speculating I could see it hitting 15-16x earnings the next year which would open a huge run way, not that we can expect it to play our right away.   Has been trading much higher, almost 40-50% earlier this year.   I do not see many opps like this tbh...

I agree with you that it is cheap, however earnings are overstated since maintenance cap ex vastly exceeds depreciation, and management is lousy, keeps over promising and under-delivering.  Why do you like this more than CP?  What impact do you think the merger of NSC/UNP will have on the company?  Thank you.