CSX (CSX) 20 Apr 232023 Q1 Earnings call transcript

Good day, everyone, and welcome to the First Quarter 2023 CSX Corporation's Earnings Conference Call. Today's call is being recorded. And I would now like to turn the conference over to Matthew Korn, Head of Investor Relations. Please go ahead, sir.

Thank you, operator. to quarter welcome and everyone, our call. first Hello,

Sales Joe and Vice Executive Chief me President of this Officer; Vice President are afternoon of Vice Financial Executive Executive Joining President Executive and Sean Officer. Hinrichs, Jamie Kevin Boone, Marketing; Chief and and Operations; Pelkey, President Boychuk,

followed call, disclosure non-GAAP on X. In this find forward-looking our you the presentation disclosure by our will accompanying on Slide X Slide

Hinrichs. it's my Executive pleasure to President our Chief Joe that, introduce Officer, and Mr. with And

able All Thank to conference the you Working team railroad real to our scaled right. our are everyone. as all volume improvement performance in for deliver of quarter, together, CSX well thank use resources and Good merchandise businesses. are With benefits model Matthew, and pricing coal growth first our financial evening, results. driving sufficient you, that ONE by strong joining customer call. in tangible delivered solid as driven service we our in a the place,

Our time, to better over year. and has our proven network CSX XXXX to very do a for service that reliable and even well, railroad. can sustain is to is profitably show essential already us grow intend active be which we running

very economy, in network that about we They nation's environment to recently some national freight. in and greater Difficulty] [Technical the communities in across move railroads that One actively our of the discussions a our it's I of proposed. our Starting to of am have first finalized address our safer. union CSX Washington CSX taking details about to our make Paid share our been here. union also been that the demonstrated the for states steps the leadership February, sick involved priorities with the leaders of pleased specific been after we last for U.S. top better I more and the know legislation has our employees. matter were important agreements December was were leave proactive class for have

that that whole to know safer. a want entire something wanting data-driven is performance solutions also eager CSX, our not We industry make safety for is and be advantage do but part be be to of industry our proud of. to competitive CSX effective, They are will

We have with been practices senior leaders months ahead, them conversations best the to encouraged we'll engage policy by and common continue our our building in and on sharing ground. with

emerge more We are best at sharing confident industry and stronger, aligned will in that better period the safety this practices.

in quarter. carrier review higher let's X% moved the Now nearly We to revenue, in first X.X increased generate operating of the our than the the business, highlights discussed $X.X million quality quarter to ratio to our and Operating was turn in of which OR year-over-year presentation over carloads previous destruction XX% year. was $X.XX the the includes the we've billion impact first as past. and which XX.X%, income billion,

with per on intention $X.XX. fall, our very XX% serving is talk excellent very operating Sean relationships how employees strengthening Jamie clear by the this you early earnings customers are what our we about last hear but details, I to CSX model our Kevin, company's and this to came Finally, with clear increased were better. still was will It as quarter. achieve examples starting a of strong When to share our and we build to

me let over team. to our it Now turn

our defines culture hear good on quarter, everyone. and emphasize you to part of of safety how our is us importance all our continually new Every afternoon, We and you, of this network. we it a fundamental Joe, execute This Thank our take the every our operating and plan. and reemphasize shortcuts, we mindset employees. to of don't teach didn't compromise, we hires X

across to taking These data of XX.X reduce for the miles. some miles the we detectors trend will we analysis. identify are At slide, running In are from real-time to see average CSX, but installing XX.X spacing safely. added this you box high-bearing additional network In XX proactive that detectors temperatures, transmit our hot keep also will our real network. these XXXX, detectors steps

we which day when bearing before and temperatures. train stop, So to is a use into hired integrate we safety needs hot We're tell employees reach and newly can to X. to predict not only critical continuing begins bearings but data on also our also can culture, issues a the they

Newly extensive Development Education Institute training in railroad attend hired and at employees Atlanta. our

operate like roles. box conditions. employees to ATACs, robust The as the regular track us new also safely proactive technology. regular new classroom, are safety data cars, gives these with they their our plan. assessment used track cars called our operate training part tools that Autonomous combined gather need run critical look and These are advanced inspection in allow trains to of monitor field-based loaded cars with and These closely that on commonly

the to in in and are operate. partners communities live committed we we supportive Lastly, being which

That how respond teaching effort hazmat properly is communities materials. to relationships so with them to in and responders especially to incidents, we why those developing dedicate much with first those

program fleet including We many years. tank XXXX, offer we in have we X,XXX first X dedicated of to cars used nearly that multi-day training This have and sessions. designed is And run responders. railcars, are a specifically trained a for

FRA personal FRA ticked next sequentially, accident injury train down slightly. The while the Turning increased slide. to rate the rate

up However, both measures are year-over-year.

the as will recent efforts, of consider to a these of have percentage we success and our railroaders, higher hiring that -- of important learn employees from confident we It's federal gain decline. because experience newer incidents of they the that frequency are

has turning X. significantly. performance Slide Operating improved Now to

CSX. what at here to appropriate we place, results an The plan. and operating a shows our resources that can ability are no deliver do to testament we that doing operating hard as these tough plan in best, than operating team's we team a doing we are effectively is true the other and With work executing the what do

of given challenges and performance dedication resource the solid for of such trip of pleased our XX% quarter. while keep cannot performance employees matched an plan Carload results, customers. with that's delivering record level the these importantly, I trip is enough by XX% our for performance railroaders. a overcoming our operating intermodal record all Most team high, thank reached improving. we'll all-time this the while

improve service into received yet. both continued measures happy quarter. regulators and the second have and fact, with have customers sequentially not to our from we are I'm In the we shareholders compliments on done improvement, but support

discuss show goal our will that, can that turn our keep top results. line said, drive I service over can long-term CSX. Joe to As over to so we that With and time to it this sustain growth for is improving we the Kevin

Jamie. you, Thank

our increased Revenue revenue from in benefiting pleased X% We with performance a merchandise an per are and quarter. this volume. increase very unit X% XX%, in increase

signs to opportunities start to service reduced wallet with identify as our cycle encouraging growth are We service and share seeing with respond The new customers. team times. creative best-in-class improved combining customers to and on solutions is some existing focused gain

volumes quarter. While we did see positive issues growth in in production the automotive, impacted customer

surcharge. On favorable by up steel issues the remainder automotive year-over-year of moderating expect outlook benefited as we largely side, from contract Metals aggregates and demand. Minerals outperformed, strong for strong a volumes driven the fuel Pricing in and both very production was and see positive higher year. repricing we through the

service. benefits we will pricing the For supportive the a see continue improved of environment to remainder year, rail from and

the in we of many uncertain, focuses economic outlook growth our continue remains as on momentum see drivers control. to positive the team segments we can merchandise While the that

There convert It's a and portfolio. as from encouraged our significant minerals our early into wins to auto, by across in merchandise remains are still such new products. food we but ability to improved business share opportunity win service segments truck

XX. Slide to Turning

First at quarter XX% the we and coal cycle XX% origin on increased volumes revenue higher and improved improved times Export strong mines. as performance per volume and revenue flat unit. production were leverage

effects We capacity the as at Bay our also of Curtis benefited we lap reduced terminal.

quarter improved benchmarks International also utility shipments restocking support sits remained over just ton, strong and per continues $XXX capacity. coal now metric demand levels. on domestic the strong Our to below rail improved production which and met

should the ahead, the year. prices be positive market to year-over-year coal healthy volume supported continues the commodity by through international of remainder Looking growth that drive

could market gas remain more the While should a backdrop low. challenging domestic face prices natural

Turning intermodal Slide to on XX.

a per increase a weakness than import quarter to was which, X% international inventories activity this we retail expected, softened slowing decline as volume decreased markets, elevated. decrease demand affected offset due X% in in revenue of intermodal X% by First Most as as by have revenue and heavily in unit. volume more been remained

market of initiatives of forward, currently headwinds has intermodal service challenged, to Looking half the introducing conversion while market demand. drive continue to lanes where number by second a expect there truck The to do is moderate. year-over-year new underway remains team we

their the as supply market last to Many of you are more their turning look of and to companies end diversify to developing markets. XX. capacity finally, shift bring the years key few over closer Now Slide chain major aware

committing the by to build manufacturers acceleration encouraged of activity plans all been in in times, and with capital have the U.S. We Eastern capacity announcing

For CSX, represents great this a opportunity.

Our expand. team to companies with of to where the of centers these the The network the them industrial mission of Northeast rail are companies a looking with benefits location Southeast and the they can is with serve major industry-leading areas network the fast-growing of leverage attractive connects highly population and CSX for our development that the partner service. provide

opportunities. to invest of in to wider continue expanded site a that has serve select include program site range We our rail

shovel-ready development industrial allow new with all with access sites network. will to us Combined capture projects technology enhancements, of offering to CSX by sizes this

we network seeing. see of partners. service As in-service XXXX about across facilities In on alone, on our these stretch area. you our our broadly $X.X XX and online, shows projects the brought our slide, how new customer representing are excited investment short map the across billion line are can total The nearly we success partners

entire projects total and remains each pipeline, across month. to in this over industrial process with pipeline robust our Our development we're adding XXX

across number growth we our business expansion onto we volumes our represent driving that projects very grow higher. expect an initiatives. excited partner as about together. with network, and time, the engagement a the we I their and our the thank Over to bring we in team our We're to would projects algorithm partners of entire new customers key all these revenue growth efforts of the as building for increasing driver are to our be help momentum to like

to turn discuss the Now to over it Sean financials. I'll

good Kevin, Thank afternoon. you, and

fuel XX% headwinds, coal the pricing recovery. discuss higher line top quarter strong revenue Looking $X more million prior I'll in as other increased Interest earnings following growth million tax income grew or and $XX XX% to and on while was first expense to billion the higher Operating at was Net by increased on million outpaced $XXX several and to XX%. income results, slide. compared up earnings. growth, on pretax expense which EPS billion, higher $X.X increased the merchandise volume and $X expense detail year X%

at look closer Let's and now expenses. next to turn a the slide take

expense quarter combined $XXX real first the as estate includes of inflation million $XX gains. lower from impact about year. with compared to as Total This and million $XX increased headwinds higher million well prior depreciation an fuel

items. turning were to due compensation the million and inclusion additional PS&O expense. the expense by impacts million and to line Now Am Labor increased increased inflation, head individual of scheduled fringe partially lower expense incentive as offset count locomotive operations the overhauls. and inflation of primarily Pan $XX $XX

to impacts These as due insurance outage expected of years benefit item ton by lower sequentially. a increase last due higher greater gallon impacts was million this intermodal as well base. result were $XX as miles. smaller a a should a partially customer million expense several facility a were well and arising congestion also gross line larger offset as also fuel PS&O X% ago in were by costs improve quarter study increased eases. recovery from than There that up Depreciation a year's as asset million $XX to within several and equipment $XX And price an as

were through transaction. the by Virginia and improved performance across terminal markets. $XX further days faster sustained we evident and drive year due all quarter, primarily rents the intermodal to million per the higher network from quarter benefiting fluidity Network gains rents unfavorable load from year. increased in estate expect efficiency gains prior congestion real this within $XX to and and Equipment expenses car lapping across and million, related savings were Property savings

investments Now quarter. Adding union turning for flow generated these business. XX. slightly to last $XXX year impact CSX bonuses cash cash higher employees. the cash payments million would paid Slide the of up wages over of and flow versus flow the retroactive in back payments, been free reflecting to free have on despite cash in

by general a recall encouraging highway. grow also the measure long-term public You'll our introduced CSX has or CCE, we off profitably compensation. when that It and freight Cash the of profit economic CSX shareholders the within earnings, conversion benefits called both incentive our of

and QX, calculation the the this high-return capital up can appendix. $X.X The share And strategic be $X.X in and CCE in close CSX $XXX dividends. is aligned year. in After including is investments million fully disciplined quarter, And encouraging prior shareholders million through investments. returned seen projects, first funding infrastructure versus repurchases billion billion the over by to to with of interest shared CCE $XXX

returning approach And that, forward, turn to Looking we and shareholders. with balanced opportunistic excess back remain to our to let remarks. closing in his will it for Joe our cash me

Thank you, Sean. you. Thank

Now on let's conclude our with on XXXX, XX. as some comments for outlook Slide shown

that combined heard significant you business. with with merchandise merchandise. volume for strong us Strong Automotive, continued benefit and demand from our pleased demand, met. off we metals, both the to new we from very describe, are export and have deliver thermal as wins customer year We're increasing in healthy seen and to confidence Kevin we First, give Minerals will expect grains, performance be start also for the year growth coal, for a the to we able year-to-date solid

Our merchandise have coal been met or we Intermodal volumes our below have expectations. exceeded what anticipated. and

knew of the enough the business and over sorry, first well, has of down we And year. international offset though activity be effect the substantially parts been not of knew intermodal intermodal the domestic imports very the lower We half our doing -- inventory. elevated to are will

grew intermodal GDP, XXXX for our difficult drag revenues, for volume guidance total quarter. than total as performance by on the said, single to driven faster revenue it the in miles GDP to of in our full estimates The by miles X.X%. Altogether, we solidly solid roughly at is our the are currently our year. our with and low grow up than the X% Revenue of softer previous year. X/X mix Intermodal business strength over consistent export coal was That and volume and meet rest will first the beginning the what ton outlook it merchandise contributes expect the in of CSX does effect the of contribute half less our especially moved The ton digits a grow consensus volume favorable. our we you but make quarter, have and and for at is a told on

service $XXX by quarter coal that our pricing on decline million in our run remained last over supplemental benefit rate environment already in [indiscernible] in but with decline the negotiations tougher are first customer roughly We products. expect per from to costs very continue quarter. benchmarks the favorable get International here. will compared comparisons $XXX to and just the revenues transparency from much spot supported year, to improved today, of year-over-year prices We still by met and below strong with tonne

best our to excess drive the and reduce costs will operating We our efforts other counter higher continue as effects costs inflationary in efficiency to we and labor can.

merchandise the powerful to volume leverage performance drive more potential best of -- to So benefit be and operating the support for margin network. our our way us will from

take but across expenditures start company. estimate In and ONE at cash Every what are challenges, energized the has ahead. to CSX by am we solvable, far by flow have $X.X ours I we shape I see outweighed are very am opportunities industry confident this that that and they addressable this I'm to billion. we closing, quarter. in the encouraged Lastly, accomplished still culture

towards share meaningful us profitable a As service and said customers Thank now the your and I every taking our location take that goal. common reliable steps drives before, providing that to at you, we growth, safe, across here questions. all of of are our network we'll goal

And open for line that, questions. with Joe. up the [Operator operator, you, Instructions]. please Thank

Brian first JPMorgan. from question Ossenbeck with our [Operator Instructions]. We'll take

Can primarily networks, within suffering sensitive. do the Kevin, I talk different compliance clearly, improving the service backdrop and from some little see at talk just the network? service levels. to different across truck pretty bidding rates, guess, customers rates and it the of where more when compliance. bid with But you fill strong comments might poor be about order you where across you is merchandise, intermodal the a and heard You've your

Yes.

the in probably that, order you line say our with especially levels. remember up the discussion we're we I rates. would the weren't service with think improved few quarters against more said we where I over last probably

currently, the third did last the So during customer year weakness meeting see quarter, kind demand we're quarter we starting period. but of fourth

on we So as the through year, based look should easier markets, comparisons of of economic the we the seeing. in the current we see back some half -- our activity on many that we're side, merchandise particularly see

So us confidence we the of as move gives the guidance what year. that's in the through kind

Bank question of from Hoexter our Ken next America. with We'll take

If that Kevin. Great. I there, follow on just could thought

like at to talk that's trucking. from Can of kind of plus be type mid-February, spot weakness that economically it you recently? bit about the Joe, intermodal intermodal the or there talking seem to truck of -- you rates a kind economically about more just Or being I look the backdrop changed So of we talk RTM something the know, something right, the and just switching a seems kind GDP in a on in changing Maybe if don't market? just in tougher, background. side outlook. economic about is little an why Is

every a quarter. merchandise some side, we in make and came first I had expected to side, international in I bit obviously ARPU market I some the but on safe we the contribution. revenue than a a of think have much But as higher the say and expected strength and flip weaker time it's in probably think Yes, would what trade certainly off weak on that this that -- the saw that market we markets

quarter. varying when will kind the market recover. through what that's are There opinions the on we international of -- So saw

second larger in some our kind of the customers expect of pickup half. Some

to last some which we'll quarter fourth is weeks, seen then over easier. X X quarter face the through have stability the third a difficult comparisons gets encouraging, lot but and We

Chappell next ISI. Evercore our take with Jon from We'll question

with to going stick I'm you. Kevin,

way go you that that for all the your couple improved Given et plan exemplify slides renewals. like those cetera, far compensated the the performance, contract relative but these is, service, improvements the Jamie particularly done appropriately you're you contract through that actually feel renewals an a last you to X, do another of some put with you've I of number service both And as months? basis, are how especially guess basis on service improvements, over up, through Trip that on ask absolute being

in at Typically, little over renew Yes. rates, when concentrated and year, that's in that the our you our having to very and look say, quarters. a would highly able that backdrop every visible our certainly cover we're given And our would I increases we conversations are inflation be renewal the to business with those we and to market. customers the first cost fourth half

customers service, continue differentiated to we to we pay I the prove the service think a our service that's occur plan can in As we continue and the that believe starting reliability they're market. is, -- and we reiterate, to to as have for we willing And the provide.

this should so it's with And -- them. more like volume can't reiterate in our I see around a in share. conversations market we're taking opportunities is starting where success enough we customers be to early And with

our and to looking ways rail to. for for service the more customers cheaper that they're Our money. deliver them, we getting is more save ability in and a to are confidence Usually, option need

the months. some been excited about very the we've few things is the able last team over that do So here to of very,

We'll with Barclays. question Brandon take our Oglenski from next

obviously, contrast a unfortunately, the of you is negative but good the And through bit. kind this mud delivering PSR you months. metrics the just Jamie, on And the has very guys question, railroads, lot concept of and Joe had, few maybe can compare are we've because press been But like a service dragged last the in here. for last or

that between forward. And you the So the . going industry? guess, do the how what's difference driving I leverage of rest

add and Jamie start comments. thanks. some Yes, let I'll

improve for improves experience we in principles of As that, sustainable, guiding I've are balance the our Improve we and of costs. and safety employee how safety course, and asset utilization, also control think first. said always times the I then are long-standing working the customer X improve service, model many as at in past, and all prioritize operating of and keeping them those as hard far are

and team And results throughout I the on our and a we're focusing ONE service and strongly our that delivered result CSX being believe employees that the of by very network great is customer seeing that our specifically.

the how to valid example that you and you just are ago. And [indiscernible] and in that regard. prioritize they years bring lead keep Obviously, as how so how today believe X it's things and principles were in you trying balance by railroading I of everyone along we're as

it hit Well, Joe really well.

For taught one railroad does the hear think really when that I -- this railroad. -- to many way I I at don't I when what CN. mean? say the know about And I only know. I way back and people was is was ago PSR, years

in it we've do out resources great to in been now got X this. the we've and said some strength doing plan. past come we able are that the We order way but for and the fantastic, we would. we great to folks to teach to struggled I've over at bench we've operating years team, COVID, of do operate actually years through got unbelievable So how place the an CSX the

who an the customers getting gives that there Kevin sell are there giving but team it plant is on the go the that's job network we're not each every to different. that's that the them folks that from doing [indiscernible] plan the and trains folks them finally put a and the in unbelievable out that's are executing the who need running and servicing and point exercising And who we way field them field, servicing that and and operating team the the together, and line something opportunity just day out his trains the to the to to committed way team are we've Z A an the the product

you I know, what just railroading. So it call want. I don't it call

from Scott question Wolfe next Group our with Research. take We'll

per Kevin, sequentially carload rev thinking we XQ. XQ, about be how from in even should

QX. walk the from just know And takes. the year. here then Just XX.X% you OR maybe through similar of of some in the we see rest I insurance the do puts and recovery, but improvement us sequential there's things, Sean, think

Yes.

continue I as pricing see that's think that's to the we from inflation said, the as biggest have QX, continue those I really strong in of renewals, not to, the with contract driver obviously throughout and -- backdrop QX discussions going to to higher year we'll and we have going customers.

probably positive The biggest recover, and ask swing factor, that's sequentially, But out. you into quite shake can how those one frankly, flat look to prices and can a that, year-over-year usually we coal at the is see fuel surcharge But that just little see here. on than and that's prices right that's on that coal you export but the you're see and where now, something a probably on diesel And price so fuel, wait and where bit, summer about. the ex trends. we'll first other diesel headwind, core to then sit an where basis, otherwise, swing at momentum head quarter looking and RPU, they know you quickly we'll obviously, which the where around the optical have

obviously the quarter Scott, then, us. first XX.X% great ratio, for mean, a in is for And start operating terms I of yes,

then and fuel as benefit had the think quarter. you sequentially, you that probably have gain about the that lag to insurance favorable the in I for we think normalize both

always XX.X%. see relative do OR almost of anything better in see in increase believe you to the QX than from that QX. different around an a second volumes We fact that's we'll the a reason that to seasonally So that year. this the typically any don't and first, result to We primarily as quarter perspective gets

Particularly for ease issues eased strong the have of in production here, that auto had aggregate. and we with some with demand a QX should

a the if is rest will thing in should So run bit be a levels of likely be flip other say we these one the was service the out good QX the just costs that will to headwind, where it more a but rate to we at I even that revenue it's come setup. elevated side, of on may with momentum good a versus year, better, sequentially. about little or be little bit feel continues the cost see caveat

next question Chamoun from We'll take our Fadi BMO. with

Yes.

You talk the facilities, XX customers, past new I'm are coming examples, you online strong some wallet? that could 'XX. had existing the in But 'XX example share very your and some kind you growth the to give us just seeing in slide and curious facilities into appreciate If your existing to pipeline you've talking a of that. you of when about obviously, tangible discussed

Yes, Fadi.

I think in tied that. directly very of product. that's to innings service the early our And we're

good that and of benefits have that's But they're And with really from his of products good a XX% a our example comes perspective. seen a seen share we've we've service to roughly and truck-like is early think others some kind to to and willing truck some are conversion conversation. see quarters One Jamie for things really, wait have them, starting to and us. to want those our mind success. that we've more I cost them really before see operationally, customers share food more from thanks of conversations doing examples willing more XX% many performance to customer have provided But those team that gone now where and happen. service to direct a many, I see some that in category months even or

convert if is the figuring what's out customers. really team opportunities the with grow Jamie's our [indiscernible] our and exercises having really with needs diligently possible, we really there's working through thinking and art to putting are how really and network of We're which truck. against their what

on a team the But on meetings I've is the for -- I ever highest hard. they're to think working market. save uncertain of on lot these backdrop momentum the the costs seen the has ways customer really given because acceptance looking been

number have these of have of We I over the a set lot ahead. weeks a success. quarters expect up and And next to few

UBS. from Tom our Wadewitz next take with We'll question

on This for is Mike Tom. Triano

be enough resources there truck product? to you to a good additional level hiring the are make network So that a Do Trip XX have is can plan compliance where and Or think you some on on that there seems some strong service crew carload here? from conversions. do progress you to maintain

to working a think, got to our a peak. we respect like for to folks people. get vacation with XX%. number, We're in today, number XXX another we've a I try XXX around particular, to get to XX% close still closer as We're XX%, -- Mike, good sitting on to X,XXX to

So we want to push towards that.

up to attrition, trigger XX%. enough the the we out react, stay we Now we us continue way, there. if another goes also Sean got to. remember, attrition if locomotives is which along have mentioned, needed some Resource-wise, with gives against could where way definitely other costs to as We've something

As we matter get locomotives. get, fact, need the we the fluid a less we more of faster

those everything but Kevin of to, And to as we'll analyze brings back. resources pull in a out them bring that and business able them keep keep. So need continue course, comes to we earns and can use spot them back team we're on where them we where more its his

know and as and team strategy as where we side, end. So my good this feel to Kevin But supply have we make resources. are them in we we those resources car work that point that's got to sure time, at customers the we'll with with we At continue his are. right on with as working look that sure on continue we've we need work working make close team. car customers. team a I a to the and

sees his Kevin with wants and little But in resources. discussions those what and that, good the car you bit a are growth than the those see that's to side other he Maybe that about out he growth in But there. areas with we're some -- customers in touch on everything. talked coming, of shape

business, a demand I where I'm to it's in got team think, we we are. had Sean's just the factor that like mentioned, what team, these team of together, feel Jamie of place. of sure some very where know the plan see make we as is have and on going and here Joe car have a auto whether a And lengthy the with that along differentiating to in that coming meet supply team great operations the some and aggregates we and recently we we the sales growth discussion needs good marketing plan be the we can markets a encouraged

Justin Long our next with question take Stephens. from We'll

costs think you moderate calls, about elevated of level year. I on talked service-related this Sean, the prior that should

tailwind During first the be the and call more these on you of you in cost curious suggesting number But the thoughts quarters you in like cadence the trend January, this share would saw this in expecting I quarter to could savings? half if any how felt that updated I'm materialize second you're weighted. were ahead?

Yes.

million off you I we was what call related a related mostly PS&O think the intermodal I good within Like would we're $XX on see terminals. rents -- a had I said, clearly savings in to $XX million of line That quarter. to the to about start. cost on that congestion

mentioned, into So sequentially come already QX. of as we are those seeing out, I costs some

mentioned. see then we'll as that's you the bit. get that And we of like half, pick that second bulk is see where we'll up a to the Our it, forecast little

that -- that's talked engine intermodal maintenance crew in So rents to be to going -- locomotive be to and about, and things Jamie over costs. time other continue related improvements the like count related and in terminals,

So cycling always from top our assets. of crews we've that -- related congestion some and initiatives in that, course, helps just And and issues terms our the of on of to last working on. other productivity both then got we're year volume of growth levels, not

take next Wetherbee Citigroup. our with Chris We'll question from

on we're so quarter, near-term it is moderate in that button volume on more hire volume a in see the I'm guess of the on And goal. fact reassess maybe seeing. where that the then a year. environment? headcount the good context a was curious gave the Maybe sort reflecting little potentially earlier progress the the Is kind questionable depending X,XXX there maybe conditions of your you pause economic the of second the and color. after Jamie, you bit towards that environment hit could point question we And some side. number I than

basis. we out say, I'm talking, to took XXX had we've were XXX trainees say there. quarter ourselves constant wouldn't No, keep a at XXX looking we last around listen, time, pause when -- this all. done Chris. forward is I as on we button move trainees -- We're What we to the I'd we

number were. a So to that way we dropped that ramp the we knowing bit need don't we up

As attrition as I our said, we look rate. at XX%

spot. or up need the bring we to if down to still that that bit ramp of then, course, to And that is XXX we So maybe number sweet little a maybe bit. review XXX little we'll need a

always our to We're rate. reduce attrition looking

of see think drop than our then obviously industry much come years, with comfortable. rate. that's were with T&E down, has a that the past the we working initiatives been many, many to in our in a But hiring if to spot we needs good people can those to We're where I stay numbers really those we're at the that. the spot. on I side. XX% with railroad. course, feel what in at get numbers. And looking we'd better we're But be hard see do at we And for

we course, move doing as Of still engineer we training forward. are locomotive

to It's ourselves we're side continue get to on but union the we situation side. thing we in conductors engineers. side engineers of so on mechanical for that the hiring where future, on make always us the end a don't we to our And and short the look right engineering do, high at we're in as house recycle

[indiscernible] know rate. see where attrition look need jumps any maintaining at anything, are we large that at. in more if it's XX% don't a our And T&E different just keep whatever that the can employed any need if we that see any obviously. don't folks going show We weather But as trigger don't can necessarily them on what markets we really need long know we of to as hiring storms. through quick. I that got we've pull direction. If a but we We We've to, point. go to good to we're really if So we to we're our all. pretty storms committed us, at at things numbers ahead

comes Mehrotra Amit Our from next Bank. with Deutsche question

Congrats question wanted impressive. One to the I really on ask. results

intermodal I at least a could years. decade wrong, So total as lowest this XX.X%, of was revenue like the I if the I the percentage last be number XX think over enterprise, but I mean it which at that's look

showed And really cost terms where good so I in -- the of that mix positive guess the was where I'm understand, leverage revenue trying you to growth came from.

trying question of what so that's you if I that to seems as of not, don't a some mix percentage some cost the guess of as something strong understand has normalize think I And it leverage. like just just happens a but to know ex fuel or with fair revenue. the to intermodal I'm maybe cost do

course, down, get margins into Amit, specific don't line the were within of Yes. that of we extent of were. intermodal business. To sort I each which, mean, volumes they

You're our terminals. We'll have business. We'll and -- to our them be within but have segment see if to the disproportionately able again, to say, going And year? should strong incremental savings as when as at disproportionately think ratio. going don't begin I margins intermodal to that's of on I fuel positive our that impact crew intermodal some that starts. I see grow or impact some volumes margins savings every normalize view. did would this -- got We've intermodal a think savings on operating And intermodal impact on recovers those it's our

from question with Ari Rosa Credit next Our comes Suisse.

I kind exciting business what of of like maybe a that impact out hoping quantify it's time talked next XXX couple of look set might opportunities on earnings quarter was strong Congrats of about, pipeline laid of for terms realizing new pretty revenue what the here. in or the over you years. that a there. you the like of and look whether opportunities could might Kevin, you line that that

a going X years, years, some you seeing, of we're as the take metal couple a if the of side complete to well. these at when projects, that auto facilities number not really look -- mean the I of some Yes. to it's of on

kind So me, would X if on basis. aspire points into to really, momentum you of growth of that builds think a to XXXX. gross we ask it's aspirationally, the X I

not cannibalize can would your really bit I a bit the our up online. Now given more, be come little a that these like stride start to all projects we have as business, we point, of to of if some hit little sometimes the activity a just side, these able to and development industrial from gross but

Ben Nolan with next Stifel. our question take We'll from

Or that that against is it's as rail How is against lies competing of I'm should for the for about you're Kevin, we a I nice list, another think where how and it those competing might Actually, follow nice up actual because map. -- versus at there look competition growth? curious, much trucks? you head-to-head projects. that

over years, development attracting you know, done haven't as the of XX, XX last to Well, a the job great the railroad. new industrial railroads

necessarily all offer. So very, these it's the all familiar States, understand can team, in you that about they rail they're word sure It's companies United is production -- new some new investing getting the need not very about to with out. our battery when of think to and particularly infrastructure the getting what advantages that we making markets, and

the quickly. have of you that the of infrastructure, energy offer they in to the you sure be that and where in the move markets, exciting out emerging front to you it order -- need that's lot A So have make resources locations,

it having about develop And market all can that railroad, the which it's touch has. And you moving shovel-ready the is way ever than opportunities quickly. quicker

to And of industrial that to they so that companies every We lot to And with key good ready these go. leaning well. we other our the provide. want a can certainly, peer why industrial we're those compete learning We reach. that's sites as eastern customers into it's day -- have for service touch

as our in they customers to so points things the decisions. make And all those factors these selling are

next our Sachs. question Alliger from with Take Goldman Jordan

Jordan. wanted expense fuel was only piece. surcharge revenue up to filling fuel up sort Andre was It looks for is but like fuel $XX This of year-over-year, million. on million follow just in I up $XXX the

So an EBIT in benefit to million the $XX the first net is quarter. of X the

that quarter. benefit $XX in fourth I million was think more like the

in or the like fuel benefit the for, the you strips, still trends some acceleration So magnitude, in quarter guess, in second benefit. diesel It on and expectation some Any might seems see of or terms here quarter. maybe it based drop the how on just that third timing I --

there might You just and in your thoughts be. curious here offsets sort of what

Thanks, Andre. This Sean. is

math correct. Your is

fuel into forward think put if we it you up, were you're impact will year, second a would benefit look sequential drag. versus prices million a are think is to because basis, prices in fuel last lag looking of the quarter it last and least second I category quarter the net a the curve the second That's be on the net basis. surcharge plus fuel were you in the where year in what and will it at quarter, both the reported on I expense. relative $XX I program. where and is, negative be a likely and going simply talking But the in revenue net to about quarter, a first just

we'll versus So they diesel prices right be where change to now. assuming that, no are cycling

We'll David from take next our Vernon question with Bernstein.

color that's to is on can a year-over-year Sean, CTO much for basis average about expectations full and into of been hedge kind you a added bit year for talk the 'XX? cost add the little per any impacting cost packages benefit how

David. Absolutely,

-- those get think now half in about terms see added bit scheduled union a where the a XX,XXX depending it the to a bit increases stable favorable expected. I then union about timing will QX, little we -- up employee, And to mix the for employee count QX, the have a of of we driver got of the the terms with less will impact our a of wage dollars you -- little in are be think little which versus be cost into we came increase second just we year, per cost at Maybe employees forecast. maybe are agreements employees quality, the on costs that we of which on X% we've of into So , as just to is -- the employees, I the as with which to due step-up right per of due you mix. employee go fairly in

far been has so experience positive. The very

point. quality little at of are are seeing the of of couple a would benefit, life a advantage basis, benefits some There's seeing when to of we those net certainly and And the say, X needed. a quarter a take and of I additional as there benefits. this that's are bit employees on it We is million but well overtime,

We'll from Wells next question Poliniak with Allison Fargo. take our

is perspective market going the those quarter, think think give Just Merchandise in were on Or top this? X%. growing good spread grew back that share volume, of or you what share do is gain of any we as about us guide. And it. gains to that some Is in there way And piece a to pretty any? quantify would if you what the more can 'XX? be over X% you get those that areas, that of X% of to 'XX for there this

Yes.

on to really And that that the lot is ability our saw. -- service our customers of the that side in we had think the merchandise we improvement capture have. I success particularly the orders a

February bit weather was was January, favorable then us, a those months, perspective. so would March then tell good weather me, pretty little really certainly well months as And a probably in help but that challenging were from that Jamie

softness little better a we've probably a bit basis though on more demand I quarter, service the overall, normal about in through January, of February. little say really just some it even So in and a that capture But the to was would recovery ability year-over-year there is weather a our markets. seen out of

RBC We'll Spracklin question take our with from Capital. Walter next

and a here. and So Joe's Kevin. for And mean to comments. -- back turn moment back Sean even just I to really it to I related want Jamie

that's a when well. on good prior And at time outlook then I look wins is the business is record into Jamie going and it pretty a very record and to when of operations at way? those you a XXXX? little Joe that mentioned in low hitting to asset in The model prior has that exceed those you're ORs or simplistic kind here. that back that growth Or translating handle So mean simplistic, were his the when levels approach opportunities. hitting Kevin that is levels, that productivity working operating Sean, it levels. good go XX overly Is of it is good type is record OR. say asset you look productivity record I to -- of kind can't achieve too

Walter, is acquisitions the back Well, to thing first you to then. quality you've the since OR, got I think XX the recognize think

basis that's underlying a is of So materials inflation. XXX more. about higher. lot contractors we've headwind. of And cost points employees had of and paying The We're

feedback that We've specific business said, run get the delivering pipeline up That customer we well good this demands. as the we are expectations productivity, against so as and And we got as to are well customers. and to long deliver on wins great to go those deliver setting being of and headwinds. continue and from we can't that strong help the we term right where going going But margins, improvement a medium destination. are we over expect as out I point OR. give to We're at would you now. forward, incremental that's the from

our next take question Cowen. We'll from Jason Seidl with

think that operations? assumption Coast some Coast East the of will labor It's baked see you of coming a if I on for the your it Congrats this quarter. our about that we that really so, here, in of talk I Are the affect on reflected, was to do West what's back? ports to in good and did so service you survey shift quarter. to an looking to sort nice And well sort wanted how and outlook agreement. doing volumes think, with

don't huge of amount see shift. From that I perspective, a

Coast, and on Quite network. heard You're Savannah of on there's ports you lot what Coast secular going of of a the intermodal and see advantage investment to Chicago through the come business, frankly, onto West wants to across our have know, the when as you the other California network. to on, continue in a going you challenges East our through think

incremental I of will freight Western interchange positive probably of see the for us that as our some that view that there. out partners through some So an with

as the a in back terms into mind we of our in move outcome my half. positive So that's growth opportunity

Thank today's disconnect. for and presentation. you you. may And this you does participation, Thank conclude now your