Union Pacific (UNP) 21 Jul 222022 Q2 Earnings call transcript

Greetings. Welcome to the Union Pacific’s Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded and the slides for today’s presentation are available on Union Pacific’s website. pleasure your my Mr. now is to host, introduce It Union and Lance President for Pacific. Fritz, Chairman, CEO Thank you, Mr. Fritz.

You now may begin.

With Omaha Thank Financial our you, President Vice second call. President Pacific’s welcome of Officer. to today Rob, and Eric and good quarter morning. Marketing and of earnings Gehringer, Executive Operations; Kenny Chief Rocker, are And Sales; Union me Vice in Executive conference Hamann, Jennifer

April tough during second we our quarter As back expected the a shared earnings quarter in was quarter. and call, first

to solid initiatives car increased team that and the recognize Our get and fluidity restore loadings it we that making are is with before Cardwell into increased limited to actions the Those discussion, reduced Union working. operating But want happen. excess car network progress Pacific costs. velocity, reduced We inventory. made improving I

are our of truly the people long-term success. special and are they foundation Our

$X.XX quarter to of XXXX or Now of $X.X turning Pacific’s Union per $X.X to reporting or share. our morning, second net XXXX share. results income This $X.XX second quarter results. per This second billion quarter billion the compares

ratio quarter basis were and Our prices points high operating Network recovery second deteriorated efforts XX.X% versus record headwinds. fuel of XXXX. XXX

positive surcharge operating core gains fuel business to pricing However, pressures mix income and strong these a offset revenue, produce growth.

in be direction. in we and quarters. the be Those handle and were recovery right actions necessary The As moving better confidence the improve as actions the gives continue understood that financial third performance. me of we would the will fourth a since service during volumes we our customer we we made to discussed we fluidity are position done, mid-April more that to quarter, our took demand. grow to to There’s impact improve in speed to but improvements have the increase

over Kenny for Let business it me update on the turn an to environment.

and Lance, you, morning. good Thank

our Premium car active X% network a make our than To segments. by and in those in improve was industrial to all and compared efforts year Bulk a fluidity, on volume freight business of groups. offset our quarter a inventory was more three had down business our decline Second impact to we ago. Growth negative reductions

supply addition, down revenue higher In a pricing XX%, gains Freight continued up was fuel global was volume positive by disruptions. mix. driven surcharges, due chain to our strong intermodal and

and wins Let’s cycle take carloads a X% consumed higher solid and the car from each and grain for these gas XX% Volume food sulfur with two shipments quarter the pricing Grain driven shipments partially lastly, quarter, compared fuel in by car, that in shuttle inventory eliminate revenue were revenue year-over-year. by of closer year-over-year down started to volume increased increase per and year-over-year Coal continued to was up X% and renewable domestic products carloads look core of offset favorable driven supply. volume year, groups. business contracts longer Xst. grew grain potash. due at flat due refrigerated last a surcharges reduced efforts new as remained reduction to gains. And shipments on fewer Bulk, biofuels. X% reflecting XX% of down Fertilizer down average by natural X% was January times, was and Starting prices

demand overall to primarily new business year-over-year, X% challenges, to shipments. up car, quarter. XX% although Moving by down pricing and remain improvement due network. to markets, the in partially X% Industrial year-over-year, was chemicals winds improve plastics growth for increase specialized as driven surcharges average fuel was shipments construction in minerals core steady the primarily we products a the forest compared improvements took Volume to demand market. metals driven Energy were reduce up year, on within certainly to compared industrial plastics we products various and volume driven Metals to left and was increase last petroleum for car X% in and by Overall in development. volumes fewer although, year-over-year demand by on up, materials X% shipments was inventory were revenue offset table industrial, up and due service deliver and shipments for to and in XXXX, actions X% across by Volume frac forest driven and gains. to X% up per continue volume the the by sand business our higher quarter, growth. revenue

volume increased Average to aided finished quarter challenges was both core and down chain driven demand fewer Premium, truck volume on of XX%, capacity fuel offsetting XX%, vehicles the went quarter primarily a by by decrease up private parts, shipments. positive was service and versus per revenue, XX% a due XX% revenue car growth, and comparison. strong driven by was to increasing in up XX% higher X% shipments which driven up by by Domestic volume gains parcel mix software against Turning the traffic. asset X% and from revenue continued supply year. for Intermodal X% surcharge auto disruptions. volume last increased Automotive the tight in global weaker international pricing

will But rates our closely markets volume. to conversations inflation our with moving in rising our will to customers, on front how are I back opportunities that excited Now based interest impact At and overall us. XXXX. half a the watching about for the macro of we see am of be outlook level, our

commodity. with our Bulk Let’s start out

solid We development to expect market grow business due biofuel demand and wins. shipments to

For demand were our for to to demand that where opportunity dependent what improve. we comp is the captured cycle and we exports our our favorable have a last know expect our as continued quarter, the coal strong times so to-date, match year. resources service natural more to than better tough we outlook gas recovery, throughout grain on also prices we anticipate year. We But available fourth have there’s in

changed. Moving our outlook industrial, on to not has

And drive industrial chemicals domestic stronger truck current XXXX than commodity groups. and lastly development plastics to shipments the level. be do We rates industrial by petroleum of see we growth production for markets wins our expansions Customer closely our Premium, intermodal are monitoring We to not expect return demand in forecast. softness. and expect will to business

to international in We to and pandemic recovery shutdowns intermodal China. challenges the see the chain with improvements from supply expect

to team pent-up continue Difficulty] monitor supply half driven the will entire interest to increases, automotive fluidity by elevated the we we the expect warehouses. of year in fuel spite we maintain the However, second to of growth demand. be chips we environment and our that of [Technical our from in rate ports throughout chain and semiconductor prices working head improving and the thank In we about from supply will I third Eric optimistic our am see demand and the we levels. seeing hear positive product. to service together I quarter momentum for our Overall, service the are you into marketplace, to recover customers the as want operating in

that XXXX. it improve I am confident With growth our can will the to and that, the to I of continue more we over operational network, to in Eric turn As half review we back year capture into the performance.

in good nine The we our chart as recover slide with the Thanks, steady morning. quarter decisive fluidity. April on began the inventory have customers, of implemented of product state and to progress. measures discussed improvement. April, made operations. the and need service in better restore network current shows we To a on we and Kenny, serve our and reduce We since slide levels significant in trough nine, hit Beginning

results. challenges improvement experienced holidays and July to course Father’s the Xth reduced momentum been While straight the crew build and line, and not of We of we because has has positive generate incidents, for. a team continued availability isolated and the crew expected planned from as stayed the Day

We have, our prior to those from return however, and holiday recovered trajectory. improvement impacts

have in ability X,XXX the and new year. to hire in feel graduating training, third with We we hiring additional by an currently almost have of XXX employees To-date confident graduated benefits in continue end transportation our those the of quarter. approximately and our to employees XXX see XXX employees XXXX, this the initiatives of train and

yet efforts I from customers. be the and hard already not and marketing by am and most UP, to the within cooperation would to importantly, the all done, sales not acknowledge work Although, teams remiss the made. and improvement I is operating encouraged our

state is in today better combined of these Our efforts. because a network

for Now continued on measures trip starting however in trend key supply time. and from strengthen car Intermodal freight chain XXXX performance and as plan metrics lag compliance to continue for manifest resulting our quarter. trip the elevated through auto sequentially the We plan the as let’s performance second street to slide quarter to velocity, XX. as move The congestion we box due quarter earlier key chassis year well below did review dwell XXXX container increased in continues compliance results results.

increasing will on remains improve service intermodal performance. which car Our velocity, attention freight

chain supply persist. the with Although, the challenges associated likely will

our Turning beginning the added network quarter which productivity the with declining for XXXX. network Since lower recovery locomotive now when have for compared XX% locomotive of network, the actions. results we to the impacts metrics the of the coupled slide to illustrate the velocity to XX, train efficiency quarter, year, impact

overall the will as anticipate velocity. car fleet improve greater the productivity into growth utilization, loads with volume As a locomotive heading we of half second at better we year, more move

as year productivity down length employee remains while Second ago. slightly quarter, compared essentially to miles increased. X% workforce for levels one car the deteriorated flat were Train quarter flat

length to completion aided sequentially. sightings of leveraged utilization is However, in train XXXX. X% XX the length train to-date up The team improve by crew

improvement opportunities productivity quality we take safety to beginning we that as Wrapping class more we metric identify are slide high committed of provides achieving service programs remain build to a performance. world evidence The XX, up and for employee to hold. continue to product goal on We customers. incident the our resilient made enhancements safety our our in the

our implemented increase we rates derailment the expense. further network, crew decisive and reduce will April The to efforts. compared the support have ultimately sped these in workforce yet to swift up not an to and initiatives continue improved educate recovery and reduced variability XXXX, supply congestion in While

to Jennifer the turn forward to review on the to plan second build will momentum half to our I that, over second during With XXXX, financial gained the we it quarter. Looking of performance.

morning. Eric, Thanks, good and

our negatively impacted rising walk ratio look earnings points. $X.XX adding program of the Let to basis throughout me widening the ratio per share per XX.X% our Pacific’s on ratio per at basis quarterly refining of by the start increased lag Rapidly down share to spreads earnings XXX fuel worsened while prices share. points, our slide and quarterly operating a operating on surcharge with and our earnings by Union quarter XXX and operating quarter, fuel $X.XX second XX. $X.XX the

second more per operating topline line the recovery Our and efforts the Below impact real network negatively respectively, the close lower and of netted share, a of Nebraska the core sale of our ratio rates offset the to we Tollway were in half $X.XX State which that points quarter. growth. the corporate $X.XX rate as of May tax and and tax per We Authority, impacted benefit Illinois in estate changed XXX benefits announced state further basis than results EPS the a its reflect year-over-year land of sales share. with then

$X.X our totaled Looking on versus on Operating slide second now volume billion, statement increased quarter X% revenue $X.X up XX. year-over-year decline. XX% at billion. expense XX% Operating income a to XXXX

the of Excluding higher fuel were in quarter. the expenses impact prices up XX%

operating share the $X.X per contributing a quarter $X.XX. with earnings billion, due repurchases rate Nebraska increased Interest decrease versus increase increased XXXX, tax debt rate. reduction and mentioned levels. just I to income of Second reflecting year. $X.X when Net X% X% expense quarter second XXXX, was resulted to tax Income XX% to in versus up billion, which tax higher income share corporate X% effective compared last lower X% combined to

quarter. volumes at $XXX the Lower more XXXX. growth, rise XX% mix. prices. XX business quarter pricing up second the our contributed combined with revenue, XXX breakdown increased the Strong freight positive of gains billion, revenue to significant basis the fuel year-over-year points Fuel freight Looking XX.XX which slide mix revenue, in drove in of international positively was Total diesel surcharge points basis million surcharge intermodal the revenue $X.X XXX volume revenue freight decline in revenue revenue reduced versus reflecting totaled provides closely points.

dollars. strong limited mix we by only cars. price growth inflation Overall, upside muted usually the strength price short-haul environment if note, demand efforts important in move year-over-year to the both support movements. for impact actions to exceeding network the though, as yield was recovery continues count that that However, our and mix we price of industrial our It’s rock dollar

an quarter, a $X.XX June. paying prices surged a a saw up provides of primary average which second Moving the on through our driver the slide from rise record operating gallon to to We in prices. in the highs April quarter XX, where summary of XX% dramatic $X.XX an expense increased is XX% gallon was in of on per increase expenses fuel in per fuel,

compared partially mix. rate was fuel Our more efficient fuel to consumption by relatively business was negative productivity a XXXX, offset flat as

Looking benefits further X% at expense the expense lines, XXXX. versus up compensation was and

increased mechanical workforce quarter workforces engineering X%. X%. grew Second levels Management and

While X%, train year-over-year increases primarily and reflecting engine in were training up pipeline. crews our

Eric, growth. X%, the result from, efforts heard borrow increased and Cost overtime position quarter our network recruit, to to out relating that and future network you strong costs As inflation support a come graduations recovery elevated for as continued and higher of prepare employee costs. us wage per in third form of inefficiencies

maintain, up inflation lower to driven associated to larger third For fleet year-over-year both with and loop volume-related expect balance of a transportation from and quarters. expense XX%, second services was the our the purchase be fourth and increases higher Purchase locomotive sequentially by the in the subsidiary. cost quarter year, active we materials expense

increased driven associated an with XX% had favorable higher Other and in income also $XX versus and rents comparison quarter the quarter, XXXX, adjustments increased called unfavorable to grew and in to lower travel. $XX expenses expense expense where car the other item. million by one-time a by We adverse out Equipment network increase older related in TTX equity casualty a XX%, we congestion. grew claims driven business million

now For low-single XXXX. the we other digits full to year be up versus expect expense

margins. clearly added performance Although, XX% of fuel higher detrimental the adjusted quarterly from in the was our service costs, fuel expense resulted driver

Cash flows. Turning to to decreased cash half under X%. slightly our down in billion operations first the $X.X and XXXX from of XX slide just

investment finished grade payout for impact Our cash discussed increase Capital This, in year’s we dividends. as capital increase increase Wrapping and free $XXX million. XX, rate flow but of year. difficult of on third cash dividend maintain $XXX debt-to-EBITDA cash higher a flow times, XX% conversion $X.X of in the to the million declined as and spending quarter, course, continue billion was $XXX of includes a of this slide over million share repurchases. announced second have Year-to-date, an spending more returned and XX% This we increased versus includes XXXX. billion and a through spend trajectory reflects year-to-date budget to which a we shareholders both morning, $X with up X.X such is quarter XXXX, normalized capital the in the position rating. for a we the success second credit a And May, XX% little adjusted in an ratio necessary up strong half ourselves was to it second time. dividends

evidenced describe Importantly, indications as our despite we for by network are of Kenny economic solid still greater metrics that the softening. services, demonstrating you and for is demand fluidity just some there

to be production of backdrop, back XXXX production track but For to full forecasted of still half weaker. example, is exceed growth year year expect we half X%. industrial estimates and XXXX the carload nearly second full X%, Against that at back X% produce are industrial on to in

year-over-year half first the ratio, operating our performance improvement to makes relates it unlikely. As achievement of

and XX%. our won’t full However, in ratio year view expect results XXXX our ratio. year, improvement goal the achieving Well, to operating our remain a the into XXXX year-over-year committed operating XX% around coming of a do of half second we we ultimately match

year. are also half expect the XX% for guidance our back for of around we margins, We be revising incremental now which to the

margins. mid-to-upper Beyond longer guidance XXXX, our term achieve incremental expect of we XX% still to

within and on plans below billion to our and payout with XX% remain dividend at the par allocation year, $X.X revenue committed capital long-term Our we long-term industry for of share unchanged, of our remain spending XXXX. repurchases with the capital ratio leading well guidance

team visit, Every am ahead. at I work from great have a Thanks Pacific. Union future to energized team, to the time company. such fortunate our of a future field return feel railroaders I the about of I we a fantastic with Finally, bright

I So, with will it turn that, Lance. back to

Jennifer. you, Thank

I remarks, a on closing topics. briefly my Before couple touch to want of

locomotives. biodiesel our have in increase First, great diesel the and our of we progress efforts, related to sustainability made renewable to use

our over reduction our for usage currently are XX% and emission by target We a our XXXX. achieve goal fuel greenhouse to This of initiative blend a achieve interim is XXXX to gas blended us on targets. critical X% in

Second proceedings agreement. is and Washington labor the status quick a week, update a D.C. Board this Biden are President Board’s for All anxious this coming begin parties the of Presidential Earlier negotiations. a in Sunday our appointed on Emergency reasonable

wage for Our long a overdue employees increase. are

are We the ready resolution to behind and put us to in uncertainty future. look the a near forward

of in am safety the Now by performance task our wrapping the first year. Having short up, as have you ahead. we heard see is that of on said and of building strides within from safety our I that, goal our made momentum encouraged the that programs. world we I positive are half class Eric,

second both more financially great yet years records. the still operationally reflects best not Pacific, financial Our we have and and of efficient PSR company the to work did done resilient, in quarter the profitable. This quarterly through Union several performance our make achieved reflect we adoption last

success Our volumes, is to our again let’s record. of six service build I efforts ability track our open of critical to will questions. in up With grow, and our and while win to to our long-term back the core we demonstrate and the levels. successfully grow the half are that, improving your for These beyond, confident months line focus strategy over next sustaining serve, that am together. XXXX

Justin comes Please Thank [Operator Stephens. you. our And proceed first with from Thank the with you. Instructions] question of question. line Long today your

Back we made ask another early morning. wanted OR today. good getting and you an to adjustment I about in Thanks guidance. are June, and the adjustment

And both? thinking you back half? relative XQ about OR changed this Thanks. Is provide quarterly on just plays Is then the economy any there the what of out color can you are the in XQ? to it how service of related? bit month? a cadence Is curious just the little the last So maybe in thinking

Yeah. and Well, up. you let start, me finish maybe us Jennifer, then

as Justin, third we came the that expected. to either as quarter, the clearly, would we and there’s and quarter progressed continued So, the exited few or didn’t headwinds as debate quarter a

a pace is, on driver and getting as improved recovering network, improving network really we really the coming financials are in the had the more back we the the being is ratio of little one and sooner importantly, anticipated the volume while volume anticipated primary So, up operating and total. we our had shoring quicker,

hoped kind added of had behave addition, but are inflationary it those and other didn’t that say In it, I’d first to big there some like pressures that what points. the we fuel were points would

I operations, to also help Yeah. the And we we out see me growth XXXX. things volumes us But in the that we our we back as thinking that in casualty the swing would a back metrics that sequential the confidence improve year reference half then, improvement, as have change. going adjustments are big you some of that, say, those and million that operations, you quarter, as of close that’s is make us like half heard obviously, financial seeing stronger That, improvements $XX well our factor. pretty those gives how produce in the about of are as sequentially to quarterly

that’s think about to way I an Justin. So important think it,

back implies XQ guess, it on you expect be a to Okay. XQ? to pretty a half, even the the go second. that Do cadence to from first the OR something around half XX guidance in XX And in you in the basically the I

to to factors you into tend obviously, expect sequentially, see can you the mentioned, in quarter, are lighter get we improve, you and maybe as There’s get fourth both. different going weather. to some Certainly, volume I

plays improvement. But that see will out. we focused sequential is exactly what on are we So, how

you bit the improvement, probably the to certainly You quarter. quarter, don’t year-over-year quarter. I that’s year-over-year from actually third in think improvement we when know will at fourth the the second in little to then We improvement a are in you But a that second of see see half. will stretch. Certainly, quarter third the altogether, get looking

Thank helpful. you. That’s it. Got

bet. You

Justin. you, Thank

line with Poliniak your The Allison proceed comes Please question. from the of next Wells question with Fargo.

morning. Good Hi.

was along with of the like Justin’s that contributor. in line sounded terms Just following volume commentary, piece the of it bigger in incremental,

and just incremental improvement, to there need volume So half. I get see in what of between trying am back kind to the service that you margin to understand

Just any more color there?

Yeah.

or I what need to What So green so the we will in and that earlier shuttles, is private exactly that our loads and improvement loads world, outlined system morning assets more or product, spool will we bring well start, for this more generate as which can on assets in both that can loads like like up continued us, attractive very see as service more sets is get cars. cars we existing Allison. green coal

exit we inventory seeing locomotive improve, to need are pay what is, what asset. really and utilization assets we to need we continue have we generate network basically of our are attention overall because excess bottomline car are to So, the seeing velocity to seeing that and will is, we improve, utilization our

more Yeah. carloads Which to against leverage is asset. that

Correct. Yeah.

in just that that impact, volume that’s back Any then so what obviously, And to line volume, it. you half? there that come second from were with quantify way -- in a can was, Got I assuming of numbers said, any of impact thought online sort Kenny the going know, metering.

would you we Allison, the the of think into at we about at it, were Yeah. call it a first if run up, have sort it quarter, second X%. We were expected look the quarter. in is, that going look we rate where and way

to So frame should frame if you it in that had you light. it,

Thank Great. you.

you. Thank

line question. The next Wadewitz UBS. with from Tom of is question with the your Please proceed

I Yeah. I and visibility services purchase would think, pretty if type costs have to improving seem were good wanted kind one-off morning. wonder transitional about, in costs, costs, is, ask that of second would you there elevated to of there half. Good I

network think operating you. we look Thank second half? some about -- efficiency in affecting Just kind maybe costs how at we of that on approving, thoughts how and

Sure. Yeah.

it good did elevated. services, are In remember a was is, One you to we $XX million purchase thing terms of right, last have guide the year.

that to as we larger there’s locomotives year-over-year So are But bringing that’s cost certainly of maintain fleet. of part a on, that that, comparison. more

of that, are business opportunity you really the in a purchase which is showed, through their when You automotive then an also, the that so loop subsidiary transportation costs, services saw and Eric numbers And second line. the think purchase see our That’s you part is transportation that business. we where particularly half. seeing is in big some come purchase productivity of on, back that flow about locomotive

want Eric, in in heard come because existed costs how and I quarter. quarter they quarter to, the Tom’s question maybe you second that the third out in fourth and

Absolutely. Yeah.

So picking we quarter. in they up customer focus locomotive side. off, The on where the opportunity gaining left to demonstrated right is that immediate Jennifer relate we now, all most in second the that the and the have future see velocity the

If you adding about look in locomotives. in had quarter XXX our back first report, we earnings reported

two to We half We start the last into have able weeks status, can those just but be adjust that make the working taking sure reverse want that out. so second put be for that forecast. to growth to very meet and been get our thoughtful to add also about variability, ready to in we that continue

So Lance. that’s a opportunity big for us,

you. Thank Great. Okay.

Tom. you, Thank Yeah.

from The next proceed Scott question you line of is Please are Wolfe question. your Research. the Group with

ask a picture Hey. Thanks. I guys. want bigger Good to morning, question. just

back? need to or would from pre-PSR a years? some are sustainability XX we to OR is XQ, you OR thinking supposed overtime? that pre-PSR now to to And way that PSR. for those this means a OR you those the XX%, what down get think be But people in there that XXs in about closer low-to-mid to your for were some the year I want about do headcount couple Is just to you the the back guess, X%? think, XX%, this I the questioning success -- on service potential volume I is look numbers Are if wrong the lower of down to of get levels headcount maybe a understand our

the Scott, that the at work of all me pre-transformation maintaining run But when which -- fewer network. quarter. we let people is We locomotives. one-third change cause emphatically problems the to out one-third our look and you the in because first is start PSR one-third also the our took and trains, of the second running by of saying today, fewer headcount that Yes. locomotives not fewer require trains

work network needed cars to had we touching took the we running we to out than and So there, we more unit network. be trains didn’t special were commodity too of that around because need many the

hundreds in in got can some significant crew for the impact do We normal path shape, on events, were of continuing crews available to more running see labor in our our availability, XXXX without got mean. a had transformed But we to have That them front of what sports Boards get tight lot run don’t pretty coming us recover grew that. ran inventory We recognize with them were network and measures fix of out you we second to to of trouble thousands things It’s more back. we just our be not we We got to other and we COVID all on some a growth or have fine the us, we forward. weather were and It’s of stack you when that tight, to we did employees into did less railroad we opportunity quickly. and need we different ways. do and unique you got while. order quarter. with to and for our going We different unions and working in take to here’s were that we risks harder. the at we the and done. in XXXX. tight When into than to And took that productive run that same So network creative in not look were up different. make the I got clear trouble, where

that believe the service, mean But off margin targets. as the other volumes have the we your as does our to opportunity table? incremental on, XX not. of Absolutely OR have well We restore as question about absolutely the to the XX part we that is bring back

us So change for XXX%. Scott not that does

deal labor Do done months comments to And helpful. Okay. helpful. going the healthier? a were just, Very in couple your be next you a getting is of Lance, think

to a that, half on a be can or really, two which going to and conflict important all really table it What’s takes about help off deals us. get property, then are of raise is hasn’t a three and seen we about force we anxiety and that in that years. And labor a to on Scott, the Yeah. put you bed care that busy the

you, guys. Thank

is Bank. Amit question. Mehrotra line your from Deutsche with with question proceed next The the of Please

guidance revised want the just Thanks, to days, Operator. the Jennifer, time know, full now this I outlook. are is Hi, we that I full back days everybody. what’s year the the guidance, or revising understand don’t year XX half second because XX embedded in, in

I at so just the biggest good look done back have is a bounce it addressing issues Kenny seen think inflection we there, to and we a have would understand, half of implied team service Eric’s early guidance, helpful because in the how And quarter the and much big job if service. on be kind

and if are further address just is, car half that to is helpful? as miles this stay want improve we or embedded that a improvement would in back And what so, to service get understand to guidance off be if things you that can like level, that, we that, enough I where and the in

Sure.

rebound are middle April today. you we So, we where seen absolutely it, mean, of to I two we good were, very where of call from have the terms things, are right, a in

network. but crew achieve to in locomotives, a better, to the our of that, continue quarter entering about think these than more to effectively, means good more heard of the volume that we us health for have be and much base entered quarter when heard think getting statement, benefits, from think That directly on purchase need are to talk those out to then using posture us, I continue utilization about the and targets, using flow top need improve we the do that. the feel the improve, services, fluidity a third better leverage assets the need our you you income But to that. Eric, you about about we to of we we second So you and able

are at. looking we are those so And that things the

sit improve week, to second that we hit get progress. But us those from from will half track markers do targets. where You to the need to so you be every able today we

putting final a Jennifer point… Yeah.

Okay.

…Amit.

the what year, with car in start we with about to X other half that, talked that -- is, direction. we most of you see think and STB metrics move type a the right others, back XXX I the velocity will the of the with the number see in have need and

that or guys I have available looking are you team XXX on if that, decades that just to velocity in that basis progress Those PSR have short-term somebody consultancy are in given some made it on have cycle not something to car be day. just you et already to experience at of implemented plus basis. people Is service get There that per out a seem on how or seen PSR to bring to Lance, many to Eric’s considering upcycle and levels. doing? accelerate a is that few scope don’t has already know a there’s cetera. the the made, but down of related there that mile important a an

in the with did the we demonstrated quarter, we are Yeah. right? through And movement anything they have through aggressively helpful, second is of movement The new, necessarily plan, all our learn the don’t which we conversation remain the but up. implementing that keeping and that issue Actually, really, Amit, recovery journey. PSR created contacts we

got approach that So, the yeah, fundamentally, change and can happen. the doesn’t that team make have we

Sure.

it. much. you Appreciate Okay. very Very good. Thank you. Thank

You are welcome.

line question of Please proceed is the Our Bascome your from Susquehanna. with with next question. Majors

so to uncertainty wage are increases than accrued uncertainty UP when up that has how different ultimately managed in prospectively? Lance, as and Union actual share come us going your Can expectations, from like some Jennifer, what and be. And if do far? wages XXXX to were the those actual people that there’s communicate to with maybe, you it to you true retroactively obviously

me and start increases then Jennifer, about wage let kind you what by of… and talking could we can see,

Yeah.

accrued, have et we cetera. talk how … about

probably approach in markets is it had come our package to probably listen near to what and XXXX, XXXX accelerated, And be wage back and that PEB XXXX. and going a to dropping XXXX, going for XXXX, was sides is zero. growth wages, down. relatively they wages. tough in right? going to XXXX include I’d in Recall XXXX were expect XXXX, And the Bascome, before XXXX think in XXXX both accelerating it’s with and is up XXXX, the then to reasonable So, strong

beat got have on good a we So that.

We and have at knowledgeable arbitrators. think skilled as got talking reasonable a be the I proposal will be to PEB is and they to that and we PEB reflects appear that the that

that comfortable place will we are to get with. a We

reflects backward time, numbers in there’s that what recognize and know Yeah. we terms Bascome, an need to once we different if is immediately will are, that anything piece the anything of looking those agreement we recognize. there so there

accruing, are we what the paying look as to make and markets, keeping with those are we attention negotiations In to accrual. are terms that obviously of pace we the we

true-up, agreement. So if needed, we time will at of the the

anticipating XXXX, that. it you you sounds the accruals that XXXX, least from is Thank to double reflect directionally in that, your for environment one in just Lance, would here, like higher and maybe at Sure. a anticipating reasonable to after XXXX both are a rails of that? check think a some proposal normalization lower inflation

It’s reasonable that, reflects in proposal our for of PEB to front think sure.

Thank you both.

Yeah.

with is line next Please with Citi. the proceed question. The Chris your of from Wetherbee question

I Hey. Great. picking up of as back cadence we thinking the of Thanks. sort the Good volume in half are morning. year. about of the guess

seen here. service you are are where have can improvement maybe go in related necessarily I that So, if result the because volume, weekly through segments yeah, has you sure that am service some some maybe, not see I changes service. think we direct the in Kenny, to carloads. been the you improving offering, product of the from obviously, incremental we good it’s there But, a to visibility have can commensurate

some to kind just we want a product specific serve opportunity better need get bit points a of of maybe be here, feel there’s able little to market? an sense yes, to Just the where you coming like,

Chris. Thanks, Yeah.

through Let’s just here. all you the markets walk

about at look talked business, you grain business. we our Bulk our If

side have We clearly is demand had a the grain couple and good of there a on years side. on lot export the

is last there crop lot we So year there is confidence. also, us demand tough that know has of given the which comparison in quarter, the the fourth a but and versus

are you in year, going of side, natural coal all throughout the of be terms well, the those see sure, for same metrics the this that On gas see probably, to strong, I rest prices, in XXXX.

on and On the Eric and food fertilizer the a and closely second add working in one is adding industrial recently then, of of lot more few a cars. are go been of side, I I do there’s to demand fertilizer cars still of to in the quarter, refrigerator, And leave we side. the together export few things part system a have and here our July, a more

we look And places at have you so win. as where metals, like

some an look is and industrial but and there new you chemicals lot on that area that at out media plastics, mixed I coming supply we If with lumber will have that strong, pretty demand still of know there’s business the even there, is too. a be car

days. low. lot side, And supply better domestic still It where automotive that you demand been they XX are strong. there’s and asset have and a a the lot going a of at and we customers got have a area, intermodal And railroad still still on dealer again, expect our talking we we look will chips on semiconductor stronger there. stable transition of over to pent-up private is then get inventory of you that at then will to new Premium So our to be our and

very So I being am the look being win commercial able team at demand the new to on. there business I our and to about bring optimistic it way it,

running can much And Eric, possible. all that as about we it’s as network capture the so

right. tied about you together. are exactly you about think when service, That’s car they Yeah. and And velocity think

front growing sitting we crew right really have impactful it’s And and fourth We us, most tailwinds, of gotten holiday right? so when we think the about got year. some through the have about and of availability in our biggest opportunity third

that and is confidence third recruit And crews saw to during and quarter. will us, Now are in behind currently month-after-month then of a comments we got Father’s me tremendous use. Day for that hiring we that that sequential by XXX a quarter Xth available have rate us the of our of the the entire my course, training additional in especially our July of improvement bring that the I be the XXX covered prepared of because amount end generates

able our tailwinds customers product deliver to all and So growing the service to increase be expect. that velocity

of very having inventory the are appreciate the intermodal customers warehouses Maybe in picking your on I creating on issues creating sort about of something that’s is dock that a some its international hear dwell outside that. up wrong there? of that is of LA, going logjam terms just is or that we one quick in in of the whether terms publicly of something else the clarification, sort Beach port, control at Long

Sure.

and look supply on So let’s the back entire chain up at that.

want to quarter, was year. we clear, fluid, be you and we have total to besides to What If don’t outside count, terminals high, focused to you Chicago, an started West are than this as the point looking the ports we excessive West at current ports just terminals. the We inland remain where about got for Well, you want entire if it trains is again, those box that their not year. is are can on right, thinking last last higher make Chicago. clearly you holding get it’s do inland And that. of had of ensure the haven’t number sure

have lack into entirely to remained keep increase is generate fluid. We turns that driving chassis be to able to the to time, Chicago. fluid in What’s the to back system the which chassis be West able of a Coast,

continued intermodal network we supply add our something? to need factors for correctly So as the get terminal want Kenny, to now, of better. entire and external prioritizing are may at look the our to we so customers driving inside fluidity chain improvement you right keep on I But,

Yeah.

can what you are over your don’t control. chassis. have and team job controlling great We you Just of control doing international a their

get customers possible. working make chassis And to they that are can beat as with efficiency we from own our as sure much their so

Okay. Thanks very it. Appreciate much.

Yeah. Thanks, Chris.

The next your of the with Spracklin Please Walter question with proceed is from RBC. line question.

morning, everyone. Yeah. Thanks very much. Good

if and impacted you that than BNSF, last your quantified some structural new peer I very at to and to next on chain dislocation well. the And am yesterday kind -- customer embargoing I closest you I relative back as will here year shear know, of obviously, know competition a the guess I Eastern of and -- change your is, resort kind when peer all, a that I there’s things that So whether your focus traffic going And measure on you nature. and metering supply to things are peers more in whether of similar can from to on bite to the experience. my and back is, potential as loss extreme structural here What issues. they occurrence come to moderate, perhaps question, is being moderate, bring assess of for are the once characterize going trying CPKC want

in ahead recovery? whether So your relative that better any that to terms peers you return of to and on coming color of feel where stand a lagging your are your those you peers that your matching of service you peers is that or

Yeah.

can So, yourself. see for data the Walter, you

Our US in recovery since April West. lead Railroads, certainly, group, has the its the the led peer

all we working would with are of recover and and we not that statistics at tell our hard sure to this recovering pace are peers point. our dissatisfied are I you well our So as am

reasonable inbound when use use we use In terms we peer if particular that embargo. a That’s we embargoes, got you for And in receiver to that very destination more -- of the their the than we volumes. of and STB, embargoes way they our how hand, that railroads them do. is yard we not time. use is period controlling evident, in handle it’s targeted then more way at we look both And our can have a serving when receiver inventory on indicates route

not it’s a we use sure very am more they effective that why purpose. do. it I don’t. But So peers for tool our than Kenny?

to customers right Eric, us thought unilateral or be East job -- head, for the approach some getting together, work meter a in the I the the at to got I our they the and conversations, start inventory they line. I should how by in that team someone is off And with first are we for Those want thank mean, saying I doing really want it we of don’t there good your were not West. of through Lance. to what traffic. process them customers weren’t with the it, we you we quantifiable working just hit Yeah. out looking our during you to did on customers, of where downplay providing data were and they decisions excess about so make us difficult.

think the I tail-tail results. us for are the

We won coming have business. incremental we RFPs, had strong have where some bids, really of bid, competitive wins out

to positives So and we of had the we have when that customers same incremental turned have at look we difficult it those with, that these into way, conversations some bind.

tells customers. that So we you our deliberate with and approach that, again, a focused really have

color. encouraging. Very Appreciate that you. Okay. Thank

Walter. you, Thank Yeah.

question Please with Ossenbeck JPMorgan. your comes line proceed next question. of Brian from The the with

question. taking morning. the Hey. for Thanks Good

mentioned more hiring up, the you about hear bit to Eric, trends little So, retention. a that are wanted

just getting couple or the new of East, pay the there from up contractors announcements qualified. seen that recently new have conductors guess, for, a are bumping I there We

in more that if thing you control? that up the just port’s similarly for, to And if implemented? is So IMC the supply in way, whether something and you at more not that some getting partners you of impact things and doing. on going of one ABX do or or that’s chains bucket end sort have affects your looking talk any that Can about then Kenny, maybe can broadly can’t does

will Thanks question. for Brian, I Yeah. start. that

transportation employees, in way you are or I our you outs? really As Both increased of seeing issues are as historical in prepared we and comments, that. our performance. in X,XXX our on be rates total do to on your our Specific to my retention to said, know, are year bring well not. with We wash was comment around, goal this would line

ensure the the employees in a at them hired we exactly program, At are to to around and even the historically it, with of two have we some year of time, go new quality just to may that’s training the was we things parts we look the and locations that’s want that’s we last hiring they Now, that not and actually may actually changes different program we in beginning a our up program have. training see have engaging what work offered when some providing weeks, that needed. they to hires, back the that for extended our flexibility went cases other helped was of been made ensure if on new our same were have otherwise case that to done you number the of of the the that in

operating incentivize system. plus stay to new So between ourselves workforce that that got hires we employees continue them to our We entire resources to to XX and be challenge team our with year the group the across us. have we want

Yeah.

talking thing. on ABX, that now, number they some say little just mean, and your operators, are be. impact a it’s there, of you are soon and same of to too And a will about a it’s just them of it’s too what soon see been impact. I little seeing and the unclear bit the question have but So IMCs right these owner to I’d on contractors, have few unclear on, a right we our out

Okay, it. guys. time. the Appreciate Thanks for

Brian. Thank you, Yeah.

the from line coming of is proceed Evercore your question ISI. Jon with next Chappell The with Please question.

Schneider year, tight at next market, year, adding adding the on of lot of morning. a was intermodal Kenny, the Good there chain, Swift, supply you. et think, side, truck cetera. I beginning Thank this optimism improved

macro with some Schneider intermodal you appropriately are term? or you plan? two to targets were resourced service in by of you on-boarding combining issues and your of the the do expecting that growth the Do medium to the recovery As some given think be these you we supportive feel and that should year you scale about the some that to spoken on-boarding next have and expectations about that huge need back meet of customers dynamics

a really mean off by that capital start job team saying the No. I management to our done great about I deliberate want of here has expenditures. being

say with will do help going that to all talked the $XXX And sidings have We this facilities. us help of about want network. with to intermodal our million additional I that’s commercial rail

strong have. that Schneider So, got look we but excited we at stable when and yes, have coming a Hub, Knight-Swift IMCs we the on, and you of about are XPO, some

just All a entire benefit customers. network grow ability feel new and and process, are our it. onboard making I really about rigorous have actually that will the we investments the of teams Eric planning existing customers the we to them, process we are from and the those got with and good and

confidence. echo will exact I Yeah. same the

well, you that’s Knight-Swift, think our and gone what As about the the department continued six doing the operating which months Schneider. playbook department marketing sales with are has together, last of exceptionally

We and to on how every investment. plays echo applying Kenny’s comment one the I Kenny, sure about Schneider. we about think those that we are infrastructure. will hit of making also them take you

doing doesn’t the benefit also on technology are all customers. just it We a It Schneider. and our side of lot benefits

to driver’s things we from that that our It’s back drivers intermodal month, our on as comments about to Go app, our can ramps they Those you now ideas experience think a ensure well. customers. in getting improve, think our of we If the all really comments are UP ramps. work continue are that efficient just are range last we the making that through for XX,XXX feedback about type possible we from of going to as are from

I confident. very am very So excited,

Eric. Thank Thanks, Okay. you, Kenny.

Yeah.

with Hoexter line Please proceed The with Ken America. of next your of question. the Bank question from is

X% especially Good kind like are in part that first inflationary of I where Lance, bag? talking for with month And X% one the seen around trend X% would the we guess, hasn’t rapid growth single about morning. But momentum X% get could rail haven’t year, about we some quarter. years. So, to just seat, should backdrop ramp? are nearly quarter through just volumes to the of you Maybe the spot was your that a Kenny, upper one-third to Jen, of you talked and of that mean, it the given even to that XX that to-date quarter the and half of ramp through the also latter in drop almost from have the in see it to in you I terms perspective managing bit Great. maybe, seems quickly your like of Hey. about, up to you some us growth, Maybe trucking. the seems about Kenny, in you here, average something digits, quarter think with how do in for maybe and rates How the of walk revisit adjust? been then, mentioned in the us

Yeah.

of a off, puts July Xth Eric out a about talked First little of in or holiday certainly and us bit ramp-up a this ramp-up coming capacity scenario.

other The is in that go and rates the is, we lot more given are mentioned is those the a reasons and we I of to be a the of still a that, contracted so And system the in down and number more got a network there and that We have our There’s part more spot of hire that’s adding need that then and of we that’s to truckers we of there. lot have if mentioned and there’s meaning adding in that thousands. rates resources, are rates spot confidence differentiate to versus tens cars this lot still see us you these seen contracted rates. firmness a onto looming.

chassis increase. seen have dwell We

seen have container We increase. dwell

we be are the is we to especially there. are tightness improvement, all going So are tightness right that service as there’s still our pricing and service seeing. pricing we for now in that during improving, And

fundamentally, quarter and into we the will. right, and Ken, need you do to volumes we are third accelerate

happening confident is and that be will are starting. that We

seeing down before. and you range. It’s of efficiency. right, CPI that and up being In are are doing terms unique -- chart probably that deal have Notwithstanding our environment, start that, What org the inflation, just would and costs a hasn’t that management all time a you long when adding X% relentless what we is necessary Wave about was been the of experienced and to use a the experiencing we in on of process more our relentless necessary team seen productivity we purchased out network. us of what saw with And quarter, second there’s quickly recover supply dealing long, the improvement since get through. of also just most things the is in with overarching process correct, and to that’s otherwise. plus directly But it’s the one chain recovery which to resources technology goes the the and team that productivity inflation helping we than

to where our of I negotiate and right cost can last the suppliers total Wave cumulative us benchmark looking We suppliers want years, with or handful are and primary analysis a with cost saved say, on now we we cost basically deconstruct our then for dollars new and look analysis -- that and that take XX should spend chunk reduction, it us of and of as find help of hundreds And of that’s forward. hundreds millions ownership. over our

away to environment, to soon. And like you anytime going it right? unique yeah, So, go look have and do do different it’s a doesn’t things Ken, it’s

I just call. one I from It’s Eastern is guess, perspective, about I we if heard just not guess, employees thing, this just, a Lance, still UP through Rail. this clarify an could last you not as about hearing night I as from this point guess that from Is operational adding a of and just headcount. I control, of improvement lot that right? it’s guess, it see Eric’s I -- view, not am about you

get hearing availability, is crew to hiring completely Ken, do the and to get fluid. have spot back Yeah. right. being to are about hiring you mostly right think, in it we Primarily, I which

important an that’s So element.

metrics, can darn are that, operating network of are dwell see the and to addition is Terminal good well. good there’s, pretty generally shape. terminals In in though, portions in pretty our that you

that availability, are get over-the-road things other help and like to that there got that We that reduce that. effectively have with variability continuing built to more are starts events things into derailments, can but crew like

Thanks time. for the Appreciate the time.

Yeah. Thank you, Ken.

Seidl question. question with line from Cowen. the of next Jason with your The is Please proceed

Thanks, and good I on domestic to the bit Operator. talk Lance side. intermodal team, more wanted morning. little a

keeping domestic intermodal. truckload we as year yields might in the sort have on How at the rates are the think you that, the should think of close half I about Kenny, declining the it eye maybe a on mentioned, spot impacts You we of look model? back and

as But, going It’s taken, but volume increases we domestic and intermodal. are XX% RFP so Again, very on supply Well, few our things again, between terms are spot that on volume there’s more there and a disconnect like it, volume We watch there we and chassis improved rates. a not a showing that’s out prices yeah, loosen now we in side chain. to are still with still the out the you contractual the the those dwell the up season contracted tight have through reflect would container see are we the in going to to just seeing dwell the it’s up right side. to that’s there. that and and the capture us see of of help what

rapid I Kenny, than see reflective just changes fact of we in chase different you mean, And price in the that, that’s our pricing truck. contracted the world,

will. truck starting up if the in back down, are of phase, you now still are catch-up and rates to drop that kind while spot we flew the So

probably we on. supply for or lot different And we accessorial XQ, in general? we chain, comparisons was worry year side last the should that about XQ to think year-over-year that adding as height a we charges lot this the rail or How trucking yield on of look was as at of that carriers the were height look there the of the about the XQ, sure

Jason, mean, well. we and improve year, year, of you the beginning I half right. the assuming We I this in see back supply of there’s as Yeah. elevation as still seen of we the improves had the And chain of because at for would in some kind ancillary today are those talked revenue items supply some of opportunities that the to chain. say

to mention improvement back should would also to of something more the the a and pick relative to international here of back are expecting see hasn’t consider. watching group, half, the bit half business in are it intermodal else loadings up say half, we the impact relative we much, for in those that, rest changed but we little of a So negative some the so in some I mix first I to yields back in as look would domestic the half.

of in. embedded that’s all And

back Oh! that’s out year January. how with saw kind relative in And we mix Yeah. of even Absolutely. playing consistent to the

Okay. the color you time. for Appreciate everyone. the Thank

you, Thank Jason. Yeah.

is your Please proceed next Stifel. the question. Ben from with of Our question line with Nolan

Yeah. Thanks.

the of you year, So, are then, you certainly incremental in I about when carload that growth Kenny, the in also think, back talk said half the but growth you expecting XXXX.

side, play macroeconomic that if curious really on the to into Just the of how are -- catch growth just you up decline is were what broader bit it that macroeconomic a assumptions of environment little carload be? sensitive sort broader and kind takes able would even to account or

on Yeah. is for able a I catch mean on will lot mean inventories that finished they the development XXXX. these probably are again, is this volume. natural wins. business in up gas replenish of with vehicles to we pretty some expect the layered of some mixed of we same side. I commodities like strong and all prices, The but true low to being remain fundamentals are coal parts, really not the with But, auto

wins can over-the-road, and true new on point that again, on finished vehicles our is are And then, plastics wins that business on. were business development metals business. same wins These are over-the-road. development auto with our coming business business were that So to I parts

when looking and for production I how I whole about to where and that’s a So it there industrial think am as what’s stand capture. we at us out

A that clouded that they look right and place a down kind is outlook hasn’t Yeah. that a Their dramatically. I in U.S. across and to regarding overall about big by now pretty they Europe of happen those happened fact of been China are Ben, think multinationals the have global. a slowing recession. definitely markets what is in markets different the customers is bad talking and States in catch-up United our the the they could lot and might if as ship, bullwhip occur, supply as would we in just were because chain not you stocking in strong destocking occurs. in issues. still there’s in a destruction, are effect, this impact it to their on there’s occur, that a the in recession, And not markets, to because downturn demand where be that yet. otherwise commodities, trying commodities recessions be to get our lot there’s of destocking not right,

So it’s just hard to say, Ben.

to We have been out really parse that ourselves. trying

U.S. we far, is think say, down, down. slowing it slows let’s that so the economy And if

markets I a going are think to growth place where still be have going are we to in our opportunity.

Absolutely.

All Thank you. help. That’s tremendous right.

Yeah.

question with is with the your Shanker of Please Morgan from Ravi Stanley. proceed next Our line question.

morning, Good everyone. Thanks.

said between I think the everyone. the commentary, your primary market. the IMC truck is I back market what of here that the intermodal in loosening you are the be back the should the is truck on for from earlier when good the time look, That follow-up of truck half truckload in completely the competitor that you and the conversion, So that truck significant But some half? uptick I of kind these into switches conversion broad for and really to including falling consensus, drives be a trucking half well on year, the rates think, when going Just companies and potential of back implies in spot you the domestic should year? yield between difference hear you here

Yeah.

customer are and wins property do seeing we about we a Knight-Swift, that’s and have we So, our benefits now with on are remember, there. new excited that from

out product to insert there resources service improves, our win As also we over-the-road. expect more to

also business that that there’s on can know come over-the-road the parcel back us We side. to

there you spectrum, few resources as second the of out add half. as into more So, still there’s in business the this grow look network again, if we improves, the our service opportunities a across those to

Ravi, a is, and thing, to just the And fuel other between think big delta trucks. rail remember there’s I

an by impact term, margins, And of so, the about. talk cost you impact for have an has are terms in but that people longer who our ESG on And that truck. shipping certainly, heard larger fuel us benefits has even it then, there’s

needle still opportunity longer And much so, for we us. the a that’s today, not term maybe while huge shifting that’s think

Ravi, to not But your Kenny, sure, back Right. that… going question, I am

Right.

is half your some kind truck of in requirements rapid the … conversion. acceleration back in

on, service happened you path we the product continuing on happening. to and improve keep have is to we just our get need are You what

one Very for there’s Lance, follow-up, person And crews think, chatter I helpful. on quick just color. Congress about Thanks got the the railroads, kind comment one of some that? for any mandate to trying

Yeah.

involved don’t discussion. in get Congress They the know to size frequently I So involved. is if crew getting get asked

there that unions the conductor quality affected cab it’s there. ground. to the negotiation inside labor the sure the Our They make an better the course, continue they allowing on are by for is that efficiency the to And railroads to address our now of life. either redeploying we opportunity great PEB to think role the with or be from now of right conductor’s negotiate, national of which right will jobs. the addresses question question We and are is

And that. so keep to we are pursuing going

yes, So, stay tuned.

people working how thing up we will happen to on STB I a is of rule think have and big pending that the have the next locomotive many our antenna that. have in been they cab that is the got on regarding be

FRA. mean you think I

meant say the me. Did I excuse am I sorry. STB? FRA. FRA, I

everyone. Thanks, helpful. Very

Yeah. Thank you.

with of from Please Goldman with is The proceed Sachs. next Alliger your question the question. Jordan line

be may a This Hi. little redundant. Yeah.

just go acceleration You in multiple parts. half probably that. to single-digit terms I basically to volume to answered am of the in year? But the of have back it high the -- of sort from X%

But together have react. you about know what and economy the And I quick whether for am when the opportunity think I first in expect? just headcount, to has just it’s like question don’t understand headcount it? you get operational to need is, able is things all to guess know, you Just volumes the happen. it critical acceleration like today most trying big a Because important? components and can which how to get a to the sense changes, seem level that is I the trying Thanks. the order to that be besides ramp to economy, they be happen I altogether, and But to

Lance. Sure. Jordan, is this

you saw XXX, you in where month the in at back month recently carloads as the at the XXX. So June, as will ballpark XXX XXXs, seven-day the I of beginning take high

happen, By just it. and does happen happen, So June, service did the that we improving product railroad on kind will it. our the way, ramp that are capable of through was of We whole can during month.

and improved grew the service we time. same So at

right right so being are wisely one, not just cruise makes in also have and can what sure the crew we number re-crew rates we on they it’s crew happen, to using have demand. that that’s every but of That’s are we week place in graduated, right place. now, which availability terms run the In that trains every and our making

on first down, much of a run rates both those. to of lot re-crew are Our more room efficient. starts still There’s

a Right first shovel now, thing it’s work then shape. that and the all good are running network in the that’s perspective. good And So from pick reliability much after points happen. has to that, better a variability of a and are terminals the

we launching get on and time really and all on over-the-road are to about have what better of We and average, that’s do network availability crew is our variability. now

you. Thank

Yeah. Thank you.

with Jeff from of proceed Research. is question next your Vertical Please question. line Kauffman The the with

long much. I will quick. squeezing call, you in. Thank appreciate me you been a I very be It’s so

the training. You had are your night they to rails. incentives? sooner, raising I saying raising jumped they griping CSX hour noted talk hiring, little that industry Norfolk a are T&E after about than are to adding issues $XX release and a people training put last an rail is have bit talk on a you and Can going some is little your hiring this to about days They field. some don’t on attrition little to or how want you hearing? we be the a in retaining are done employee pay Gen job call was and before just having a maybe in you the say, they five morning other how this When that changing out than be think, I more hiring of want successful week. Z. don’t employees to work stories They what

level I Sure. set kind to just want And make one. that Jeff, let of sure on your me take we opening.

this So of year. reported hired we employees, XXX that engineering mechanical as transportation extremely have success on as built we about year. We this started back last we hire need And X,XXX we to. approximately as April confident And then can hiring transportation we year. employees I morning, that the last well remain in

people think on am to tell years, that to are to railroad, you Now attract three the years relied about do the have things job, we you that, that I through have work to journey. halfway we have looked as in how, the we of two past. I the proven at part as going last Certainly,

those word understanding technical employee time, with out sure understand in referral people our So are of of same At our done friends, getting railroad we in to They Resource come inside expectations. different are the there Group achieve an our you. own and different scholarships. Workforce and joining what implementation job because minority phenomenal the of a from day making of continue one, families has asks that they But upon inside program, the those to for being also draw for to helping our best colleges railroad. that, the goals people really women

nonstandard to what’s groups you left, two, jobs a past. Lance What’s been and from them and to hit schedule going today, have of the the people been going so, have offer them up relatively to a schedule. one, attract here’s it retention process right? doing part may And certain of standard jobs in Year are the Now employees now. have attract are improve on the you you or in move can unscheduled unscheduled you that more if to you that to past able of than take than different different going in left,

us transportation in even all help the of employees our So new we that’s two front us, have launched the life quality we of to them job. in help survey our of ago, a understand just weeks work further on

continue So focus it. us on you see to will

us. are to keep characterized We but some it’s much at as maybe of other it, struggling roads the you not as still as opportunity forefront an we have

Thank you much. very

Jeff. you, Thank Yeah.

David with your next question. proceed is from of Vernon The line with question Please the Bernstein.

Hey, time. bigger for you picture on thanks question the and guys. intermodal. a morning Kenny Good for Lance taking and

a not low performance way service get set targets. forward a a business that recovery seems of put to XXs, guys, have the differently thinking you is you And business. STB you plans know, to the sense It may accelerating in on-time think, the guys a the don’t wanted is why highway I are better on from about like number? be advantage kind and fairly, You intermodal right targeting I of modal return to particularly be guys off I that terms there can of that would in shift rail? aspirational a the that give the that

in when for our referencing number isn’t the in great awesome. that game. right? service ultimate needs a XXs, the aspirational is the in recovery And mid-XXs That’s have Ultimately, are XXs game environment, end in the question, that got STB plan trip improvement. what with current intermodal the right David. now and end plan low we number XXs, high you work, so clearly, the where compliance to it’s And, low-to-mid is not We we our need are

going that’s just can that, they really do. us. us, about, And are to they every tells you from I say having care what ultimately, what customer want you really what do said Now what adjust.

trying our of product them -- as the we still deliver. back mode truck are pricing through and the that move right the year compared us they use are to as alternative their improve of half something right? competitive can reliably our do now actually give So satisfy can so intermodal service and very we to that long to markers we and needs, is huge what we Kenny? volume at we product use trust We can promise do it continue to we can and

All I will success at looking are engage add it always talk that evolve. could we customer about and customers we continue is our our to metrics. that We often,

doesn’t there service, and do with some level is big to think about customers the clarify it rail the business that service, approach STB customer of mean you UPS there how complaining most a what that to of as about price you as are you good around of how about service pricing it, that matching what that Is service does service like does and maybe use it guys and as are even service things something kind guys contract something seem all? thinking ambiguity in But is for large guys me be. better would and And that mean, that about me tight a get there’s pay it customers, at on is it’s strikes I because they the could customers it. that I incentivize as during obviously, of to occur around other you like service, complaining maybe be can what with for that or definition and questions services. you working reviews disparity these

product that to the we the providing base. for customer price are absolutely We Yeah.

to around continue And ourselves effectively. run to manage do clear continue as do We customers managing business and have we between product are other on our are can our what that, really business working of pointing that helping there to hard we grow got and out, that the that much on and the doing improve process you customers be service is and product. then right crystal around and can we room what now we their and you how out as and process point is to more thing our plenty business

work of now. there’s So, a that, David, yeah, lot around right

All right. will Thanks there. guys. Thanks. I more follow-up follows-ups couple

you. Thank

your with question. Our proceed Daiwa. the Nathan last line with from is of Please question Jairam

few in. and for answered regarding recessionary to there. you already I a questions Thanks follow-up me wanted that on squeezing just plans Hi.

in interest So a can crew you of has nimble to given foresee your you of any labor how figure recession in costs the the But kind in had past downturn? a volume the event to volume I in you you see the this difficulties to up. do that a decline. think approach year a Do event of or cutting changes your availability been pretty different get adjust

Yeah. a economy, Jairam, fundamentally the answer if industrial would is the it. catastrophic the We very quickly -- to goods we downturn no. adjust still there were in economy,

the we how more we be like employees where that, us in when the margin, volume very those Now call, make returned. said available would on about having early much to about how would talked much thoughtful and we and

behavior, whatever environment you So have business it’s see and to proven but we the the is. would probably different to fundamentally, our marginally ability some adjust

you. Thank Great. Okay.

Thank you, Jairam. Yeah.

will question-and-answer back closing This turn to session. now over Lance the you. Thank comments. the concludes for Fritz I call

thank We this forward Rob, and you discuss us joining with And October our take again morning. you all it. you. appreciate We results. look with talking again, quarter to the Q&A thank to for then in care. appreciate Yeah. third We Until you

and teleconference. participation. conclude This gentlemen, your Ladies for you does thank today’s

disconnect your day. may and time this wonderful You at lines a have