Back2TheFresh, Bill Koch, Burlington Northern Santa Fe, CSX, Forbes, Fortune, Fred Fournier, Henry Kissinger, Jay Rockefeller, John D. Rockefeller, Justis James, Koch Industries, M&G, Michael Ward, Norfolk Southern, railroad cartels, RailRoads, Union Pacific, Warren Buffets
BACK2THEFRESH (AP) There are 7 Class 1 railroads in the united states and out of those 7, only 4 of those really divide the country up.Those 4 are CSX, Norfolk Southern,Union Pacific, and Burlington Northern Santa Fe owned by “Warren Buffets” conglomerate “Berkshire Hathaway”. It’s said that Those four take in 90% of the profit in the railroad business. And lately shippers have been accusing the rail road companies of teaming up and inflating prices and saying that they just have too much power. “Fred Fournier”, the sales chief at M&G (shipping company that only has access to CSX ) had dinner with Michael Ward (CEO of CXS) in 2010 to talk about lowering prices, but turns out the only thing good at that dinner was the food. (Well at least it was in a mansion) Michael Ward told Fred Fournier that if he didn’t like the prices he mind as well use trucks point-blank period “vamos”.
I know what your thinking right now. Your probably thinking that was kind of rude. But shippers and railroads have been going at it like that forever. And the last time a situation like this popped up this size between railroads and shippers was in the 19th century, when farmers from the Pennsylvania railroad tried to go up against John D. Rockefeller. Now in the 21st century you have a billionaire by the name of Bill Koch of Koch Industries who’s no farmer.
He recently told Forbes that “They’re a bully to us. And if we don’t stand up to a bully, we’re going to be pushed all over the playground.” HUGE HUGE HUGE statement coming from one man. I respect his heart. But you see the fact is if, 4 companies control 90% of the railroad business in the united states, and “Jay Rockefeller“, John D Rockefeller’s great grandson is at the head of The Senate Commerce Committee, I don’t think that 90% grip will budge. Not saying that he has anything to do with it but he is on the exact same side that his great grand father was on. This is a never ending fight that will not stop. This my friends is what you call perpetual check.
When Fred Fournier (Sales chief at M&G “Shipping Company”) had dinner with Michael Ward (CEO of CXS Rail Road Company) about lowering the prices , things may have turned out quite differently had they had dinner meetings before that. As the Sales Chief of M&G ,Fred Fournier should have been established a closer bond with top executives at CXS and more importantly with Michael Ward.
I was reading somewhere in Fortune a few weeks ago and Henry Kissinger was talking about how “American business leaders tend to think of their activities as a series of episodes to be managed by legal processes and predictable norms. And The Chinese manage their internal affairs by relationships, not by legal processes“. This has been the reason for their success for so many years. Who knows, maybe the rail roads and the shipping companies should at least try a different approach. I personally think they should add Kissinger into the mix to limit the bullshit…
Sources: Forbes and Fortune