Warren Buffett Dismisses BNSF-CSX Merger Speculation Amid New Intermodal Services

BNSF Railway and CSX are introducing two coast-to-coast intermodal rail services as they cozy up amid a pending Union Pacific-Norfolk Southern merger. Warren Buffett, CEO and chair of BNSF parent Berkshire Hathaway, has quashed merger rumors, stating he is not in the market to buy another railroad. The railroads will debut new direct domestic and international intermodal services, providing immediate, streamlined service to the supply chain across key markets.

BNSF Railway and CSX are introducing two coast-to-coast intermodal rail services as they cozy up amid a pending Union Pacific-Norfolk Southern merger. Warren Buffett, CEO and chair of BNSF parent Berkshire Hathaway, has quashed merger rumors, stating he is not in the market to buy another railroad. The railroads will debut new direct domestic and international intermodal services, providing immediate, streamlined service to the supply chain across key markets.

The new services will include direct domestic routes between Southern California and two southeastern cities: Charlotte, N.C. and Jacksonville, Fla. Additionally, a new service will be launched between Phoenix and Atlanta, aiming to convert over-the-road (OTR) freight to rail. The railroads will also debut new direct international intermodal services between the Port of New York and New Jersey and Norfolk, Va., and Kansas City, Mo.

According to Drew Johnson, vice president of intermodal sales and marketing at CSX, "Together, we’re opening access to key markets and strengthening options for our mutual customers." Jon Gabriel, group vice president of consumer products at BNSF, echoed this sentiment, stating that the offerings will provide "immediate, streamlined service to the supply chain" across these markets.

The cooperation between BNSF and CSX has been seen as a response to the recent Union Pacific-Norfolk Southern merger, which would create a 46 percent market share for intermodal container traffic transported by rail. The pending deal still needs approval from the Surface Transportation Board (STB), but would create a 46 percent market share for intermodal container traffic transported by rail, according to data from the regulator.

Buffett had already denied previous reports that BNSF had spoken with Goldman Sachs to facilitate a deal as merger chatter began heating up. The cooperation between BNSF and CSX is seen as a way to strengthen their positions in the market without undergoing a merger. However, some analysts suggest that the new partnership does not preclude a future merger between the two railroads.

For CSX, the railroad still faces pressure from activist investor Ancora Holdings, which wants the company to engage in merger discussions with both BNSF and Canadian Pacific Kansas City (CPKC). If neither option is considered, Ancora has threatened to push for the ousting of CSX CEO Joseph Hinrichs.

The new services from BNSF and CSX are expected to be a significant boost to the intermodal market, providing more options for shippers and potentially increasing market share for both railroads. However, the future of the railroads remains uncertain as they navigate the potential merger of Union Pacific and Norfolk Southern and the ongoing pressure from activist investors.

References:
[1] https://sourcingjournal.com/topics/logistics/warren-buffett-bnsf-csx-merger-coast-to-coast-railroad-intermodal-rail-union-pacific-norfolk-southern-1234762409/
[2] https://news.futunn.com/en/post/61114085/warren-buffett-denies-rumors-of-acquiring-csx-corp-csxus-there
[3] https://finance.yahoo.com/news/warren-buffett-quashes-bnsf-csx-175425399.html