Railroads are still tremendously productive.

Reader comment on: Productivity and Profits

Submitted by Lyle (United States), Jul 17, 2012 16:55

They move as much in terms of tonnage as they did in the 1920s with 1/10 of the employees. For example where lines meet they used to have to have a tower operator to handle the switches, now it is done remotely. Or consider the replacement of the local freight agent with an 800 number. Basically today the rail industry is carload or trainload based and a long distance hauler. Also back then you needed 5 people to run a train engineer, fireman, conductor, and 2 brakemen, today it's 2. After all whatever you say about Buffett, his buying of BNSF does imply that he thinks the rails are a good deal. Today for example in a back to the future kind of image a lot of oil moves over the rails between North Dakota and the Gulf Coast, in what are called unit trains where the whole train is going from one place to one place. (as does coal)

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