Welcome to Episode 33 of the Preferred Shares Podcast.
In this episode, we talk in depth about North American’s Class 1 Railroads and the pending merger between Union Pacific and Norfolk Southern. Joining the conversation is Matt Reustle, a former analyst with Goldman Sachs covering the transportation sector. More recently, Matt has been the long-time host of the great Business Breakdowns podcast.
In This Episode
Defining Class 1 Rails
Key dynamics of the industry
The formation of the ICC and historic regulation, including the Staggers Act
E. Hunter Harrison and the rise of Precision Scheduled Railroading (PSR)
The ICC’s last big decision: the BN and SF merger
Key industry metrics and historical performance
Exploring the potential likelihood and impact of the proposed UNP NSC merger
Charts and Images
The overlap between the Union Pacific and Norfolk Southern and what the financials might look like pro-forma for the pending merger:
Revenues and operating ratios for the Burlington Northern Santa Fe, wholly owned by Berkshire Hathaway (a lower operating ratio means the railroad is more profitable):
Additional Reading & Listening
Union Pacific: Long Train Runnin’ — Business Breakdowns, Ep. 69
Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:
Douglas Ott (Andvari Associates and @yesandnotyes)
Lawrence Hamtil (Fortune Financial and @lhamtil)
Devin LaSarre (Invariant and @DevinLaSarre)
Enjoy this episode? Share it with someone who loves business history as much as you do!
You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.
Disclaimer
All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.
Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. At the time of publishing, clients of Andvari owned shares of Norfolk Southern. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.
