What Warren Buffett’s Bnsf Purchase Tells Us About Transportation

When Warren Buffett, arguably the world's wisest investor decided to purchase Burlington North Santa Fe (BNSF), a lot of people would have wondered what his magical, crystal ball was telling us about the economy. After all, railways are a lot like dinosaurs; the rest of world has evolved and found better ways to move product from point A to point B.

With that in mind, however, the underlying message is quite clear and Buffett's large investment tells us two stories. The first is that when the economy starts to turn around and recover, most gains will be seen and felt in the transportation industry. This only makes sense. As people become employed and/or confident in their income stability, they will start buying more goods. For the most part, these goods will be manufactured elsewhere (if not in our own State or Country, then abroad). And it will be the transportation industry that will be responsible for moving that product from the port to the stores.

The second part of Buffett's message is that costs might make mass transportation less economical for the manufacturers so the railway system will need to step in and help move this product from point A to point B (with your smaller transport trucks moving them from point B to point C).

See, Buffett probably sees that like everything else, oil prices will eventually return to historic highs. With higher oil comes higher prices on the shelf so that people like you and I must pay more for the goods from our suppliers. Some of these costs will also be borne by the supplier, but to limit their share of these increased prices, suppliers may look at railways as a more affordable alternative to traditional transport trucks.

The problem is that most railways do not roll up beside a Wal-Mart or convenience store (where we happen to do much of our shopping). So you will always need transport trucks, only in the future these will probably be smaller trucks taking smaller loads. Instead of making a cross-country trip, they will be shorter trips.

The message here is that the trend appears to be that urban sprawl will slow down. People will become more regional and prefer the convenience of living close to their amenities. As a result, rail transport will help move products cross country. But to service the these smaller communities, you will still need trucks, but not the same size. People with Class B CDL licenses will be in much greater demand. Rail engineers will have less trouble finding work. Oh, and the cost for gasoline will probably touch news highs, too.

Learn More About the Class-B CDL License at class-b-cdl-jobs.com. Chris Blanchet has more than 16 years of experience in the Financial Services industry. He maintains an investment-focussed website at Online Trader Today dot com.

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