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Wow, did this thread ever get wild overnight?! As usual, most of you who defend BNSF's actions have missed the point. What BNSF is doing is taking money made from captive US shippers (where revenues can be as high as 200+% of variable costs), and using those monopoly profits to invest in the import intermodal business (where revenues are usually as low as 106% of variable costs). The STB defines revenue adaquacy as revenues that are 180% of variable costs. No, jeaton, BNSF is not reinvesting it's monopoly profits back into it's monopoly business sector. Normally, a business will reinvest profits into it's highest revenue income streams to further maximize the net income there. One has to wonder why BNSF is using it's profits from the high revenue business and throwing it away on the low revenue business. The railroads will never approach revenue adequacy in the import intermodal business, yet it seems all their capacity improvement projects are predicated on that very thing. Conversely, the railroad is doing nothing to increase capacity on the high revenue bulk export side of the business. It does not make business sense. BNSF is not investing in it's high revenue business, it is investing in it's low revenue business. And there is no chance import intermodal will ever be a high revenue business, because there is optimal competition availed at every import port, and as Gabe pointed out some time ago, competition is bad for railroads because they do not approach revenue adequacy when there is competition. So BNSF's investment will not benefit the stockholders, unless those stockholders are Asian manufacturers with other financial concerns beyond their BNSF dividend. Lotus, it should also be pointed out that although the average wage stateside is higher than that of the Asian countries, our labor productivity is the best in the world, so the high productivity justifies the higher relative wages. Unless you include those suicidal pension liabilities that will kill some US companies, labor costs are not the cause of overseas flight of US manufacturing. Rather, it is (in order of impact) high energy costs, high environmental compliance costs, and high domestic transportation costs due to rail captivity. As long as our minority party leaders threaten to filibuster every attempt to explore and drill OUR domestic sources of oil and natural gas, there's not much we can do about energy costs. As long as our minority party leaders threaten to filibuster every attempt to rationalize environmental laws, there's not much we can do about the high cost of environmental compliance. But one thing we can do is to get rid of the monopolistic practices of the Class I's, that is something that is doable from the political perspective.
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