‘All-in bet’ – Warren Buffett, one of the most successful investors in the world with a net worth of US$47 billion, obviously does not need a single dime for the rest of his life. But why is the Oracle of Omaha betting on the railroads? Fulfilling his childhood dream of having a train company – like the recent $34.5 billion BNSF acquisition? (Burlington Northern Santa Fe, BNSF is a railway company that operates one of the largest railroad systems in North America with approximately 32 000 route miles of track in 28 states and two Canadian provinces)

‘Railroad productivity, our priority’ – Two merchants were given 10 litres of fuel each to transport one ton of goods from point A to B. Merchant A decided to transport the goods by truck and realized that the 10 litres of fuel served only ‘one-shot’, however Merchant B who preferred to transport the goods by train got ‘three shots’ (10 litres fuel for three trips). Merchant B will definitely be more productive from freight train as compared to Merchant A.

With limited fuel supplies (making it worse from the ongoing Gulf of Mexico oil spill), inflating fuel cost (crude oil consistently trading north) and mother earth getting warmer, investment in railroad system deserves the priority focus. Barack Obama’s US$8 billion budget plan to reduce travel time and increase mobility, reduce congestion and boost productivity, reduce destructive carbon emission and improve environment affirms the need to invest a more efficient railroad system.

References: Berkshire Hathaway Inc, ‘RailwayAge’ by Simmons-Boardman Publishing Corp