As the transportation industry braces its self for the start of a new year, the railroad industry seems to be in an excellent position to thrive quickly. Even though The Association of American Railroads stated that mid-December intermodal traffic continues to be down year-over-year, volumes seems to be stabilizing and even seeing a few increases. Intermodal container volume was up 3.6 percent year-over-year, but down 7.7 percent compared to 2007. Intermodal trailer volume decreased 24.5 percent year-over-year and is 35.2 percent less than 2007.

While the railroads usually experience the “middle child syndrome” by receiving very little attention from analysts or quickly glossed over by shippers, they received a huge boost of confidence when investor Warren Buffet’s investment company, Berkshire Hathaway, proposed to acquire Burlington Northern Santa Fe, the nation’s second largest railroad company. The proposal is set to be approved early in 2010 and there are no visible obstacles to the approval. Investments from Buffet rarely miss their mark and it is exciting to see promising news regardless of what mode it concerns after eighteen plus months of dismal news for the transportation industry. Many say that Buffet’s investment is a bet on the US economy but if you really start to examine the situation it’s really an investment on improving the US transportation situation / infrastructure. More goods moved via rail…less highway congestion. More good moved via rail with better fuel efficiency….less emissions. More goods moved via rail…greater need for trucks to deliver goods to their final destination.

Since the railroads transport goods for a wide variety of industries ranging from grain to refrigerators, they are in a position to rebound faster than other modes of transportation. It’s time that we bring back our childhood fascination with trains and keep an eye on activity in this industry.

Rachel Rutkoski is a Senior Indirect Services Category Manager for North America in Ariba’s Global Services Organization. Rachel is recognized by the Institute for Supply Management as a Certified Professional in Supply Management (C.P.S.M.) and has several years experience as a supply chain and transportation analyst in Fortune 500 companies.