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Rail shipper sees investor monopoly within Class I railroads

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Rail shipper sees investor monopoly within Class I railroads
Posted by MarknLisa on Friday, February 17, 2023 11:23 AM
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Posted by BaltACD on Friday, February 17, 2023 12:01 PM

"VERY interesting" to quote 'Laugh In'.

Never too old to have a happy childhood!

              

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Posted by jeffhergert on Friday, February 17, 2023 2:55 PM

Blackrock used to be the largest UP investor and they may say there passive, but they pushed UP further down the PSR route.  They sold off some of their holdings and I knew Vanguard had become top dog.

Does this really surprise anyone?  I bet all the major public corporations have similar "monopoly" investor groups.  Probably many of the same names on the railroad lists.

Jeff

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Posted by Ulrich on Friday, February 17, 2023 3:16 PM

Maybe the solution is for the shippers themselves to pool their resources to buy large blocks of railroad shares. Surely if the likes of Pershing Square, Vanguard, and Blackrock can purchase enough stock to sway management direction then  so can Exxon, Dupont, GM, Goodyear, Georgia Pacific etc.. If reliable and cost effective transportation is critical to their businesses then they should get themselves to where they have  somewhat of a controlling interest. 

 

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Posted by Backshop on Friday, February 17, 2023 5:10 PM

I was surprised not to see Fidelity listed until I did a little digging and the FMR LLC listed under CSX is them.

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Posted by PNWRMNM on Friday, February 17, 2023 6:03 PM

What an artful pile of irrelevancies.

The author of the piece never tells what it is about, which is that rail shippers think their rates are too high.

Good luck going to Wall Street with that complaint.

How many decades will NS have to haul Vinyl Chloride for the poor, poor chemical industry to cover the cost or their recent derailment?

Mac McCulloch

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Posted by BaltACD on Friday, February 17, 2023 9:05 PM

PNWRMNM
What an artful pile of irrelevancies.

The author of the piece never tells what it is about, which is that rail shippers think their rates are too high.

Good luck going to Wall Street with that complaint.

How many decades will NS have to haul Vinyl Chloride for the poor, poor chemical industry to cover the cost or their recent derailment?

Mac McCulloch

How many of us DON'T have products that aren't some result of the industrial uses of Vinyl Chloride?  I won't hold my breath.

Never too old to have a happy childhood!

              

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Posted by MidlandMike on Friday, February 17, 2023 9:18 PM

When investors are passive, that tells me that they agree with what the company is doing.  Active investors usually seem to just want the company to enrich the investors.  I don't see how any of this is likely to make rail investors want to give a break to shippers.

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Posted by Erik_Mag on Friday, February 17, 2023 10:13 PM

MidlandMike

Active investors usually seem to just want the company to enrich the investors.

Active investors can come in at least two different flavors: one is the investor in for the long haul; another is one that wants to milk as much short term gain as possible and walk away (often referred to as activist investors).

I often wondered if it was time to put a limit on limited liablity for investors - if an investor is large enough to get a seat or seats on the board, they are part of the management and thus should share liability.

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Posted by CSSHEGEWISCH on Saturday, February 18, 2023 10:07 AM

You seem to be suggesting that corporations should be changed to partnerships with unlimited liability for the partners, same as an accounting firm or medical practice.

The daily commute is part of everyday life but I get two rides a day out of it. Paul
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Posted by Erik_Mag on Saturday, February 18, 2023 11:27 PM

My (ahem) train of thought is more along the lines of the limits of liability for a stockholder in a corporation is that small shareholders will not have much of an influence on the decision making of management (passive investor) and thus should not be liable for any amount larger than their investment. A large investor can have significant influence on the decision making of management and that, at leaat in my mind, weakens the case for the limited liability - especially if they were demanding changes in operation that decrease safety.

There is a form of limits on shareholder actions when it comes to buying large blocks of stock. Small non-employee shareholders of a company are not considered to be insiders as far as trading goes, but once past a certain percentage of shares owned, that shareholder is then required to follow the trading rules for insiders. If a shareholder owns enough shares to be considered to be an insider, then that shareholder should start being treated as part of management.

One of the reasons why I am souring on the limited liability for large shareholders was hearing the comments by TCIF during their attempted takeover of CSX.

 

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Posted by jeffhergert on Sunday, February 19, 2023 7:18 AM

You would have to prove the investor told them do this or that. I doubt that few investors would actually know enough to force a company to do something specific. 

Just saying they want more and quicker returns really isn't telling the company to cut this or that.  Even an investor remarking about the level of maintenance spending might be a hard sell for culpability. 

Jeff 

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Posted by MidlandMike on Sunday, February 19, 2023 7:44 PM

Active investors with large holdings surely have great influence, however, the actual Board and company executives are still the ones who have to make the decisions, which gives them ultimate responsibility.

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Posted by kgbw49 on Sunday, February 19, 2023 8:20 PM

This is the former Pennsylvania mainline which is the prime route for NS freight between the Northeast and Chicago.

Pouring these chemicals into a trench and lighting it up was the fastest way to reopen the line. Hard to believe it was the safest way to deal with the materials in the derailed cars. I don't know how these chemicals are handled but this sure seemed to be a fast decision.

It sure seems like NS was most concerned with opening the line so they would only have to reroute as few trains as possible.

The Federal Government seems to be stiffing these poor folks and the State Goverment is not stepping up either.

It is hard to watch the Governor of Ohio seem to throw his hands up and shrugging his shoulders. He should be working day and night to expend whatever it takes to take care of these folks.

Simultaneously he should direct the State Attorney General starting to work on legal action to recoup from NS every dime the State spends to help these people recover their normal lives, livelihoods, and lost asset values.

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Posted by tree68 on Sunday, February 19, 2023 8:48 PM

"If you want to keep your seat on the board, find a way to cut expenses and increase revenue over and above current levels..."  

May not be stated in so many words, but I'd suggest it's suggested during, say, golf dates...

LarryWhistling
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Posted by Flintlock76 on Monday, February 20, 2023 12:45 PM

tree68
May not be stated in so many words, but I'd suggest it's suggested during, say, golf dates...

Uh huh.  It's been said that if Martha Stewart played golf she'd have stayed out of jail!  Wink

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