Burlington Northern Santa Fe Corp (BNI)

hey4ndr3w (98.24) Submitted: 11/06/07 9:15 AM

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What would be a correct valuation, then?

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oreo2007 (< 20) Submitted: 1/09/08 4:06 PM

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Escalating rates might motivate more rail shippers to switch modes

Progressive Railroading

By Jeff Stagl

January 9, 2008

Bank of America Securities' fourth-quarter survey of 1,400 rail shippers revealed a growing trend that should concern railroads. More shippers are considering diversions to other modes.

Conducted in November, the survey showed 67 percent of the respondents were "actively" seeking to divert traffic compared with 44 percent in the second-quarter survey.

A majority of the polltakers said railroads' service had improved modestly, so performance isn't the motivating factor. Pricing is. A majority of the respondents anticipated rail rate increases exceeding 4.6 percent in the next six to 12 months.

"We believe pulling too hard on the pricing lever runs the risk of gradually eroding primary demand over the intermediate to longer run," according to the Bank of America Securities survey summary.

Anonymous comments reveal shippers' irritation with escalating rates: "Railroad's focus is short term in nature to achieve quarterly dividends for the investment community & not on the customer's long-term needs." And: "Railroads have enjoyed increased pricing power but are now trashing the opportunity of retaining that business at attractive pricing levels because they're trying to get even more price increases in the context of a marketplace that absolutely cannot support it."

Shippers have spoken. Now, it's up to railroads to listen. Raise rates? Sure. Some shippers have had "sweet deals" for years, railroads say. And, for the most part, railroads are providing a good service that commands a good rate of return. But rate hikes well above 4 percent might be too much for shippers to bear. If they want to continue eating away at trucks' market share, railroads can't afford to alienate the customers they already have.

As one shipper put it: "Railroads need to pay attention to what's going on out there. They are losing significant volumes to other modes."

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oreo2007 (< 20) Submitted: 1/15/08 3:22 PM

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Getting closer to 52 week low week after week. I think it will set a new 52 week low before the end of the month. I guess Mr. B will just keep buying more. I am waiting until February to possibly get back in.

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oreo2007 (< 20) Submitted: 1/18/08 1:33 PM

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Beige Book reports weak transportation demand
By CCJ Staff

Reports from the 12 Federal Reserve districts suggest continuing weak demand for transportation services, according to the latest Beige Book published by the Federal Reserve.

Demand for transportation services was generally weak, led by lower demand from the housing sector. Reports indicated that freight volume continued to weaken in the Atlanta and Cleveland districts and was slow overall in the Dallas district. Intermodal transportation volumes also were said to be lower in the Atlanta and Dallas districts, although Dallas noted that rail shipments were up, led by strong agricultural shipments.

According to most reports, businesses continued to face rising costs for food, petrochemicals, metals and energy-related inputs. Several districts noted that transportation costs for most products increased.

The latest Beige Book, released Wednesday, Jan. 16, was prepared at the Federal Reserve Bank of Atlanta and based on information collected before Jan. 7. The document summarizes comments received from businesses and other contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials.

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