Perhaps you are aware that the Panama Canal is adding new locks which will allow it to take much bigger ships including ships with as many as 12,600 containers. Before they can only take large cargo ships with just under 4500 containers. So when the new locks open in the Panama Canal in 2014 it will change the flow of goods and products around the world. Some have said it will change the US rail industry quite substantially. Indeed I tend to agree with that, but I’d also like to shed some light on some other issues that need to also be considered.
Now then, there was a very interesting article in the Wall Street Journal on 11-11-11 which I suppose is an omen in itself, the article was titled “Ripples Likely from Wider Canal” by John Bussey. In this article he noted that Warren Buffett did buy Burlington Northern railway and that;
“Right now, about 70% of US imports from Asia arrived by ship on the West Coast, and much of that gets transferred to rail lines like Burlington Northern for transit to the rest of the country,” and, “the ship to rail routes can cost 10% to 25% more than if a ship were to take it and unloaded on the East Coast where its final destination might be.”