Rumors are Swirling around that a Major OTR firm is looking to aquire a Class 1 RR to lower their Transportation costs in the USA. The company in Question has been sitting on hordes of Cash to the tune on Billions for Years and recently decided to buy a RR to lower their East Coast Transport Cost. The rumors going around is that NS is about to be bought by Schiender Transport for 15 Billion in cash. When completed all Schiender trucks east of KC will go Intermodal to the closest major city and then be haul from there except for the tanker trailers.
BTW Gotcha Again April Fools. Also Schiender would be able to do this they have the cash on hand to do this and more. They just paid cash to Freightliner for 9000 Trucks at 120K each for a total of 1.08 Billion plus all applicable taxes and fees.
Some locos of another railroad already are orange ! Oh, but wait - that one was bought by Warren Buffett just a couple years ago, and I doubt if he’s interested in selling out this soon.
Good one, Ed ! [swg] Suppose that 10 years ago - on April 1, 2002 - somone had posted that in the next 10 years’ time Buffett would buy BNSF, and Bill Gates would own - what, 15+% ? - of CN ? Would we have believed it, or just laughed ? “They locked him up as a madman, of course.” (From the Epilogue of The Third World War by British Major Gen. (ret.) Sir John Hackett - see: http://kelvin12.livejournal.com/46098.html )
See the Pumpkin fleet no one KNOWS how much cash they are sitting on why they are privatly held company and about the only thing that I could verify is that was that they paid cash for 9000 trucks to be delivered this year. That would be like say BNSF going to GE and ordering 620 GEVOs and plunking the cash down on the barrelhead. That is what Schiender did for 9000 trucks and they want them all delievered by the end of the year.
Schneider, as a closely held company, has management in the postion of not having to answer to shareholders who want a piece of that cash that it appears to be sitting on. I would guess that they may not want to jump through the hoops being held by the STB and Department of Justice if they make an offer for another major transportation company, be it rail or truck.
OK, I’ll bite! [}:)] How does Schneider being “closely held” (AKA private) make any difference in how the STB or DOJ view or treat a proposed merger between Schneider and another major transportation company? As far as I understand the situation, the same merger or antitrust laws and regulations apply to any company, public or private. Certainly private companies don’t have to go through as rigorous reporting process to their shareholders, but what does that have to do with mergers?
I’d think, that any kind of merger talks with STB and DOJ would require them to make a lot of their financial books public. Not to say there is anything there out of the ordinary, only that tightly held, private companies tend to like to like keeping their financial books tightly held and private.
If I remember correctly, the PRR as well as several other railroads attempted to get into the trucking business many moons ago. However, they were told by the feds, I believe, that allowing the railroads to enter into the long haul trucking business would be anti-competitive.
I’m fascinated with railroads. I always have been and I always will be until the day that I cease to breathe. But what is of particular interest to me is the decades when the advent of motor transport caused a sea change in transportation. The role of the railroad was drastically changed by the advent of motor transport. (I seek and read books about that time. I’ve never really been a modeler before, but I’m now building a model of that time. I’ve got a USRA light mike and a freighthouse under construction. Plus a bunch o’ 1920s container cars. I did write a MS thesis focused on the subject at Northwestern.)
When motor transport became economical major railroads, such as the Pennsylvania, didn’t see it as a threat. They saw it as an opportunity. A truck does certain transportation functions more efficiently than a train. The railroad managers understood that and sought to use each mode in its most efficient manner. They even had a significant intermodal container system going. This nascent container system dropped the cost of moving freight by around 75% and most of that cost savings was being passed on to the consumer. Intermodal began in the early 1920s.&nbs
Greyhounds: If it’s possible to put it in a nutshell, what did the regulators THINK they were doing? I can readily believe they were wrongheaded, even stupid – but not deliberately perverse. What did they have against competition? Were they afraid trucking as an independent mode would be suffocated in its little cradle?
By 1940 the railroads were told they could not own an over the road trucking or bus operations because of their competitiveness with themselves. It was a regulatory action prompted by the oil-tire-motor vehicle-highway lobby. WWII stalled it somewhat but by 1950 it was clear: what is on tracks stays on tracks, what is on concrete stays on concrete, especially ownerships.
Government regulation of business and commerce is specifically allowed (not required) by the Constitution. That being said, the degree of such regulation is usually based on the political climate and the degree of perceived misbehavior by the businesses in question. Also remember that the regulations are written and enforced in accordance with Acts of Congress.
Well, a recent historical precedent would be when UP owned Roadway, one of the biggest LTL motor carriers. Uncle Pete sold the trucking outfit to Federal Express and it’s now part of FedEx Ground.
It would seem in the modern era Wall Street favors firms that focus on their core businesses but ,as you mentioned, some of the big truckers are privately owned. I suspect that there may be a competitive advantage into being able the make the Class ones compete for intermodal business rather than being locked into a single railroad, if even you own it…
I wonder (in a very off topic way) why some of the big Truckload carriers don’t try to buy LCL companies and vice versa? It seems like Con-Way is the only big trucking company with significant marketshare in both LTL and truckload…
Actually Carnej UP owned Overnite and they were sold to UPS and became UPS Frieght. Roadway merged into Yellow and became YRF systems and they are tettering on Bankrupcy for years they got to big to fast and the buying of USF systems Holland New Penn was the final straw. The Teamsters had to give up 50% of their Pensions thousands of Jobs and alot more to keep the doors open there in the combined company. Things got so bad the Nasdaq Delisted YRC from the system. Actually before the UP owning Overnite NS had owned NorthAmerican Van Lines for Years. All they did was sold off the Name to the Agents they kept the DOT number when they started Triple Crown systems actually. How they get around the owning a trucking company is simple every Driver is an O/O and has his own truck if he does not like the load he does not have to pull it. They are 1099 Employees that all they do is use TCS number for Permits beyond that they are their Own Boss.
I don’t think so. As big and as successful as Schneider is, I doubt they have the wherewithal to buy a company like NS. Sure they’re privately held, but truckload is truckload, and their financials are probably very similar to their large publicly traded competitors. I would think it more likely that NS would buy a large trucking carrier…that would make more sense.
Now might be a good time for a railroad to go shopping for a trucking carrier. High fuel prices, the never ending driver merry-go-round, and CSA are putting the squeeze on alot of carriers. Others, like YRC, are in bad shape and might be had for a good price. A company like NS might be able to reinvigorate YRC…it may also be a good fit as they are union too… and NS would get a foothold in the LCL business in return.
I am just saying this in 1999 just 2 years after buying 16000 tractors for cash for a little over 2.5 Billion dollars and replacing IIRC 20K trailers for another 600 million they decided that they were going to REPLACE all of the new trucks with Conventials. Now that was another order of 16K trucks for another 2.5 Billion dollars and they never had to take any loans out on any of them at all. When Schiender did this they also bought out 3 Companies DTI Builders and IIRC one out of Des Monies that escapes me at the moment and always paid Cash for them all.
You want to see how strong some companies are run look at Heartland Express The have never had to issue any debt never been in Debt and they have been in business for 80 Years.