Precision Scheduled Railroading

Overview

Precision Scheduled Railroading (PSR) is an operational concept in the freight railroad industry invented by Hunter Harrison. It focuses on running trains on fixed schedules rather than waiting for them to be full, thereby increasing asset utilization and efficiency.

2019 Relevance

During the 2019 Meeting, Buffett and Munger discussed PSR as competitors to BNSF (such as CSX and Union Pacific) had adopted the model to boost margins. Buffett stated that BNSF is "not above copying anything that is successful," but noted they would carefully observe the impact on customer satisfaction before fully committing to the change, emphasizing long-term franchise value over short-term margin expansion.

🔗 Connections

• Entities: BNSF
• Sources: 2019 Meeting