Charles Pierce II

Blasphemy: Burlington Northern Shouldn't Be Held

Regarding what Warren Buffet knows that we don't - actually, it's public information. The Panama Canal is undergoing a major expansion program. Today, only small container ships less than 4400 TEU's can transit the canal. As a result, almost 90% of goods imported from Asia (which is the bulk of what America imports) are brought into Los Angeles and Long Beach harbors, then unloaded. Containers are trucked cross country since Los Angeles long ago allowed its rail system to fall into disrepair. In five years (mid 2013), container vessels of 12,000 TEU capacity will flow through the enlarged canal and unload in New Orleans or East Coast ports. Combine oil at $150 to $200 a barrel in 2013 with easy access to railroads and you see a dramatic shift in how imported goods are distributed. To verify what I've said, go to pancanal.com and look at the 2007 expansion plans report. It's buried a few clicks down, but worth finding.

Blasphemy: Burlington Northern Shouldn't Be Held

With oil going to $200 per barrel, long distance truckers are toast. Railroads will ride high again, as the only cost-effective way to move containers from port vessels to destination cities. Even UPS and FedEx ground will soon be forced to make use rail transport, in lieu of their own cross-country fleets.