CSX (CSX) 16 Oct 242024 Q3 Earnings call transcript

Thank you for standing by. My name is Jay, and I will be your conference operator today. At this time, I would like to welcome everyone to the CSX Corporation Third Quarter 2024 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Matthew Korn, Head of Investor Relations and Strategy.

You may begin.

operator. you, Thank good and Hello, afternoon. everyone, Welcome to call. quarter third earnings our

Officer; Hinrichs, call Chief Vice Joining Pelkey, Vice Executive Operating and this and Commercial Joe and President Boone, President Chief President Chief Vice Executive me on Sean Cory, are and Officer; Executive Mike my Executive and Chief presentation non-GAAP call President Kevin find is and the our forward-looking to disclosures with that, slides your pleasure disclosures on With our Officer. In Joe Financial our Mr. available accompanying this and for review. will Hinrichs. website, introduce you it Officer;

right. everyone, quarter for All Thank thank you, today. hello, Matthew, third and our and joining you call

caused entire in matter a two weeks. I more to and network, hurricanes Helene, recover employees of First, today. a had talk in we'll our team about hardships who've communities on ONE that helping thank big by our and been impact tireless our in their want particular, the CSX from

CSX we and for We able will the themselves have systems need of there's discuss and families. our recovered, and the that repair to infrastructure this more lost, largely sure we their have to on we replace That and has who needed to will Mike that support call. physical some said, been railroaders have work which that do later made Sean

accomplished. back stepping we am and what Now looking of at I this quarter, proud entire

that volume, is to was grow and year, revenue we exactly what operating to delivered. and aim Our compared margin last

new optimize ways CSX. still started benefiting our our numerous that are team controls some initiatives only Our cost to valuable, are his real-time we network. merchandise grow the using we're business of and with our to solid Operationally, franchise service Kevin data leadership impressive to continues the getting and an bring from that to efficiency remain at and pace, pursuing

have had our challenges. We

our long-term had kept events, deliver lower goals and issues on quarter, Throughout, our over profitable our diesel growth we've prices. and weather respond significant time. consistent, equipment sustainable, adapt to coal focus This we to at terminal to

it Now let's to key go weather, over results from across some very of company. last X, publish third we the were compared to the our year. results Despite the good severe On shows our Slide able still some highlights. quarter

highlights last this by and X%. by Merchandise where performance grew in by the Total by core grew across by where grew in top line. listed volume X%, X% Looking volume on impressive pricing. X% growth year, volume our supported merchandise business versus also revenue favorable strong

reached our last improved business as XX.X%, operating compared our expansion Our of to guidance year-over-year year, demonstrating trucking indicated. strong inclusive and margin basis points XXX

a the billion strong Now margins surcharge and we solid for and last solid period Total by revenue as these up X% general charts summarize coal cost top reached income by compared quarter the same X% growth Earnings to our line quarter, the increased and delivered from with even lower per $X.X capital control. returns. supported year, share for results commitment business by Operating last CSX. grew year fuel prices. from for XX%, over

CSX just our behind in about over demonstrate years quarter that I've two ago, team, people We accomplish since execution this as we momentum can operating you powerful motivated proven CSX talented keeping joined a common as together results told Our I strong with that working anything. model. build remain a goal ONE mind team

to provide details Now performance. I'll our turn the call around over operational to Mike

joining thanks you all and today. for us of to Thank you, Joe,

in So the here's activities a operating rundown quarter. on the

certain and extremely start hard CSX team though, to and work for results by challenging a our at their locations. Let me thanking times through deliver in teamwork their solid ONE quarter first, specifically

slide safety. first So let's go on the to

last has metrics. much injuries, changed FRA since in of not quarter the For terms

we've rate in seen is than a of severity work a result, finding the frequency see And injury a our target, lost for employees. higher injured reduction we're we desired days as Although lower.

to For continue accidents, decrease see in train incidents. we year-over-year a FRA

reduction our recorded leading yard been factor, to employees by to at September We And and results great by and are this positive improvement has reduce driven lowest of human is network. biggest progress we accidents a that our number incidents factor train workplace train in it's are a factor will CSX. safe accidents. achievement Our human exposures, improving continue ability here human and CSX great, across drive our Through initiative, in the cause. our our really

the So slide. looking next at

remains rail have still some road weather-related we and fluid, had Our have challenges. albeit

the overall Our resiliency showed velocity the weather our of of considering network. effects the

major plan. response the fluidity our the while engineering to according maintain restoration our accident. And teams to ops accomplished strong, able Collectively, work to or our service gets has to effective needed changes our customers throughout provide manage we was maintaining important, of field safe directly of focus forces efficient an to service from speed on weather to With constraints, plan without our were network period. able our velocity. been this equally we're network injury ability Our accomplished of manner in stay came strategy ensure to and is and our our while our ensuring multiple plan extremely service

more by carloads dwell it moved X% starts. we less of our While was did metric see and an train affected weather, increase with X%

certainly for as in yards always the the discipline and move our are the to focused cars. our at is always of response continue operations look learned service lessons our to our we the our actions customers. and the align a with marketing operating and and the and efficient the inventories customers manage way our efficiency, in cost forefront. team to of the to aside, for from and we more team forward. Over on needs with Whether continue Excellent development will a slide, sales to help leaders our going team service always, work So last

But did service as group fast team, close big our Our to metrics collectively I important as the customers possible. with reflect and information efficiently is two-way operating us field to our worked throughout. as we difficulties mentioned staying weather-related back do a extremely forces, earlier, our However, communicating thing get as this

allowed network to I'm to line customers. our can throughout has plenty proud entire faster some strengthen. service has provide and the challenging Our team work strong couple disruptions. Communication our over team come throughout of network very And in and what recovery show to we well opportunities do needs service us vast weather. and together operations of customers' this for how resilience last our remain field and between These provided to continues network is months very have with our and with of

very this I'm team, to all, the quarter. Thank proud So I'm their tough, thankful and over Kevin. good you, of but all and for you, in efforts very in

storms, strike you, both third and Thank at ports mentioned, right. In terminal. East temporary Coast were a of at Joe our a All presented as Mike. quarter, outage our Bay the and number we another challenges from Curtis Mike with

our with are proud level this our This network, team the survey throughout Score our most our out impacting soft recent merchandise Net on grew of seeing by and mixed we low focus of the we growth our continued benchmark with will level working our strength through new commercial We profitable are a have and push communication our the moderated. customers business highest week at these deliver with challenges. our over where economic storms to major Diesel market. gas a to our appear and has Investor rates some just the we remains started measuring. to customer team natural working momentum have continued the revenue CSX more together, CSX. railroad. to you With about find we bring volumes Promoter remain of very are customers serving was highlighted deliver against supplies the CSX. our build to a to hear since needed. There's prices markets. a continue coal there At are quarter conditions to continue in excited said, the to we're from a total foundation hard mixed on service-led are able who with to to going to experience as prices been But areas been laying manage and rebuilding Day, that creative for to backdrop. freight working initiatives materials high while where railroad our of to truck efforts customers leaders other level, we've upcoming bit lot and And And All even as The they building I'm is CSX the flowing. our able ensure remain solutions for essential through by market bottomed, keep the

on X. Slide first merchandise business, Let's as our shown review

a a merchandise be us. to continues great contributor As whole, for

On that healthy by with consistent LPGs lower also X% industrial, X%, new also volume was our positive to we the drag our And see improvement gained this revenue delivering broad ramp-up reported with volume the as X% turn growth volume kicked diesel grain projects. year, and with accelerated to saw pulp driven increase across and and inflection quarter, a business the a that X% half a industrial performance the prices, compared second volume collaboration volume demand by waste. hoped last basis, to led wins, conversions, a its chemicals, remains As supplies. Close as demand growth customers in year, fuel supported both Midwest continued Note products pricing seasonal contributing off Revenue feed same-store consistent has development service Those plastics, our team year-over-year strong ensured surcharge We merchandise the X% basis, has strength on core has for pricing. for solid. up anticipated, with board had industrial solid we operating a gain year-over-year. [indiscernible], total and in and Chemicals ingredients in. RPU. great of taken gain. by truck

that factor the up customer more and this are business weather haul, by challenges. drag on Minerals remains ramp construction with very was we Cement business the XQ of aggregate shorter length RPU. Results well, said, was serve favorable. Other wet X%. which a new were up modest of over supported shipments our demand of mixed All rainy underlying volume a very markets facilities, trend is in forest quarter. facing long-term reported is Some near-term product but the doing in new

for Volumes quarter for highlighted a where soft and much ]. steel, [ a metals weaker-than-anticipated sluggish demand, automotive is deteriorated. and One auto with year, demand market reason this through particularly of also was As we've us supply to metals modest RPU softer headwind have remains this the negatively inflected mix commodity conditions low prices. market, ample

prices investor month, diminish has industry and As retail slower the higher which by high demand inventories production. seen has Joe mentioned consumer an at dealer last and to interest rates conference led

belief these markets rate easing interest that is will normalize. Our cycle help

third to negatively volume Lastly, quarter. the total fertilizer continued in trend

up to we pick favorable So able some moves. were spot

and metals year-over-year to of expect a and Minerals, of For carryover near Ag to we and see trains challenged continue year, food, chemicals, the the products remainder in solid term. be while forest the in momentum

Now Slide coal to X the let's to turn review business.

quarter, third the X%, declined For volume. X% total a decline coal in revenue

utility move As export shown saw Low limit and compared X% with year report, line by increasing burn. in down and to domestic with guidance coal. continue financial sequentially, coal in tonnage last shipments RPU our XX%. benchmarks X.X% quarter tonnage directions by in prices largely declines was export last the by our in opposite XX% metallurgical decreasing the gas driven All-in and domestic to global for and year-over-year natural we

the buyers the fourth though $X around market in any in prices demand anticipate natural volumes. end Looking approach Utility benchmark toward Export and last level and remains stable. not quarter, the from step-up are the seem $XXX the do recently the Asia ahead to relatively quarter. has sufficient near-term stabilized consistent, of stockpiles mark, Australian particularly gas

lag quarter. of decline fourth sequential coal low the in RPU all-in the a Given to our anticipate we contracts, modest single-digit export in

Total intermodal X%. ended while declined X. shipments up on flat a the rate, for increased solid grew domestic revenue shipments X% to International Turning mid-single-digit Slide volume while effectively quarter. at year-over-year,

see about West in talked shift over did lifted towards to we we the East. arrivals which Coast As the a interchange past summer, businesses our Transcontinental calls,

partners current for given business are challenges new performed for the number momentum positive find very remains due well markets of lower also up to continues over challenged, conditions short-term especially we mixed, the with the faced. but largely up, more solution fourth did We're ILA our new as to and the We intermodal of the forward pleased our remain trucking CSX serving momentum markets volumes Overall, business team remain while international activity the XXXX, fuel the the business mix domestic prepared as strike. business. opened domestic signs the intermodal with commitment markets surcharge show confident by well relatively see you and see consistent opportunities interest has We ] improve, our certain to quarter to Still X%, decreased the external outgrowing look main soft. continues this more customers during conditions gain The but a on will cycles we effects bottoming market it we continuing impacted backdrop throughout team well those remain remained a relatively network. Summing with into to that partners. RPU handle of Total our the with rate modest quick to are we some [ the did challenged including November. through to with year market do quarter, creativity quarter We other in customer to our and channel is the for future. market next continue environment. sharing we more to the see and and several see create volumes

turn I'll Sean. to it over Now

expense. includes million quarter and appreciation for network a $XX third small of million. and storm friends, reiterating communities impacts as larger million the start tireless rerouting $XX the of at amount storm-related That $XX quarter of and million recover impacts million you, It impacted impacts. business be well drove a appears recovery revenue the to fourth standpoint, afternoon. estimate of will hurricanes. From roughly $XX around to costs incremental from fellow with of like than Thank as I'd work the near Helene railroaders net our revenue current and end Kevin, QX recent the by $XX a and by devastating the our good to help the of

of rebuild our Blue Additionally, underway a and multiple track Ridge process significant miles is bridges for already across subdivision.

While construction that us capital year. we're next a the is scale these still take rebuild will of likely the and will of and evaluating read timing our exceed expenditures, $XXX costs total early into million,

growth the several of digits. EPS the double discussion the Capitalizing last quarter quarters, powerful CSX the X% income momentum in to on over team quarter, delivered with Now ONE third results. the generated operating up

proven collaborative operating model strong approach growth incremental with and at Our increasingly delivered customers margins. profitable

intermodal excluding most growth Interest with grown lower income revenue come merchandise the prior Total continued X%, by and revenue, by fuel, higher quarters, partly Expense increased In for were as as the was next momentum and fact, and well compared in X% million, by X% in trucking. other consecutive $XX more other the least revenue to costs on has recent revenue down combined X pretax fuel declines impacted increased stable with quarter. including coal recovery, as expense X% to a offset slide. earnings, while lower tax detail year by effective rate. at

Let's and expenses. a fell quarter at closer expense million. to the next look $XX by third now take turn slide Total

inflation mostly key prices volume just from fuel up efficiency were slightly as offset costs a While and lower were other driver, other items gains and costs X% growth.

in operating expense decreased larger our from was million decreased years, The efficiency three was inflation remained mostly higher Labor gallon expense in second X union $XX inflation. levels due delivered while by $XX quarter driven compensation. and base. team higher Fuel this increase million, fuel were up with stable benefiting tactical to lower utilization the improved sequential favorable to ongoing versus by cost due individual efficiency the incentive with quarter and with of by quarter, year. Purchased July up would million by in offsetting increase along adjustment count this services lower Employment note Turning head drivers. by drivers carload year to prior count half excess been of growth of price and is best up just I count asset would costs also rents driven growth and the from quality other increased conversions of a increase X% million property $X a decreased about million. X% for company Adjusting by and inventory have in unfavorable and $XX initiatives trucking casualty head head the of year-over-year outside Equipment to both operating gains head wage the of items. Depreciation a line have technology. driven fringe throughout total and count. $X The efficiency. $XX from was fuel-saving party the X% million QX. gains,

cash first over of Now to and our be $X.X to investments the operating economic funding committed remain our Investing on high-return over to long-term shareholders year-to-date. railroad capital. year-to-date remarks. have $X.X in and our increasing Free Slide to priority long turning continues XX. on profit use while distributed the the lower to capital and maintaining confident discipline After his be cash highlights distributions for focused of quarter. economic Joe flow our fully our term at safety, profit reliability me that, for income back and profit billion. pursuing to to while flow and to strong interest grow these we continues our cash aligns with remain balanced investments, are over let approach it returning of We Economic billion opportunistic and turn priority the third that shareholders. With focus grew closing growth

All right. Thank you, Sean.

I remarks updates guidance the remainder of the Now year. prepared finish the by our over going will for

I the the the ONE As what outlined quarter. our at beginning team are we of CSX delivered proud in third call, of

volumes, and grew As margin. planned, operating we revenue

the modestly more conditions Now challenging. quarter, near-term going into look fourth

growth revenue in softened of and the be a an two segments diesel hurricanes have second conference that talked and for at means and gone Lower our specifically. month, very together met quarter. that supported volume a this global metals in prices with like prices, for half decrease seen Practically, well by fourth fuel coal customer that Since total through last benchmarks and chemicals knew also growth we like mentioned fourth markets as coal us. I us the expecting. region, were Kevin about, we the drag and ] than to in investor modest couple more As volumes the we perform key lowered [ volume to decline quarter expect in quarter favorable over for ag and then, on are leading will revenue bit service we've that fourth the a a in automotive modest slight continue expect

softer here, $XXX revenue just estimate will a own. to of the in show total we effects lower surcharge market that on their slightly roughly effects year-over-year lead fuel million As we and coal

are with ahead is Our our merchandise run very operations to franchise that and well, continues real pushing measures efficiency benefits. team having

slightly after going to and expenses as near-term However, our are limit with gains. rebuild the additional revenue we hurricanes combined reroute lower margin

We year. billion this total are still aiming $X.X CapEx for in

As Sean for described, year. capital of some hurricane which in XXXX we needs additional will likely see some calendar will rebuilding, occur

a there to no a change opportunistic dividend. Finally, is via approach commitment returns our to buybacks capital and balanced to growing

many close are Let updates rebuilding the today. some this. We is major uncertainty and after market, near-term two in me with we hurricanes. give There

bottom the So we short-term into that assumptions across This in that CSX All XXXX, of have across to adjust said, is and half we'll XXXX. running is line and we building keep are second continues had very response. well, railroad. momentum building our the the

are We questions we'll weeks, few bring you be deliver at detail best growth. the you hosting our strategy for we to in give encourage are a our you more of team. many to profitable We whole Amelia your in going and sustainable, on excited just to Island, Day Investor

For about Q&A the [ the to ] we're Matthew, start your ready quarter. now, process. please answer question

Thank you, Joe.

question-and-answer session. proceed now our to will We

that in process. sure to start all limit time make the ask to Operator, one have, has the you take to one we're you we we only appreciate, question. As to opportunity that please part everyone to yourselves ready and can the

is of Instructions] questions. Ossenbeck line Your The question from [Operator comes first JPMorgan. the Brian open floor of now for

think to cost price ask picture how can price big or cost strongly positive year. about ability your get you you Just back a next in wanted and to spread a question

increase labor for You already negotiations have that set the average on side. have the comp a price

those sense of that, already if out So set how negotiations maybe tools you are have anything rest work that customers you you other of the can when work ]? is market? in in the And there's the give side those going being bit of now market to get us a of [ little more conversations on with towards terms

long, just then Brian, consistent and long of inflation Sean. price about Kevin we've positive as to you the kick all I'll saying think as been been of it's cost start conversations year about has it all customers. with kind dollars we've talk over last the that and of decade. spread when year to But price between about in seen and positive cost,

in turn negative we're So favorable. not and not either very that anything in seeing that's so that necessarily seeing regard a

terms in In inflation. the wage next for of the setup environment inflationary of kind year,

X% next year, of or north these of been some expect year. midyear ratified tentative have We next X% which agreements, at already

We X.X%. increased just have here July. in We

they X.XX% actually welfare that carry look forward. That's year will than lower So and wages. may for for that. next be Health like expenses

I wage to the welfare it, health inflation line kind to overall inflation, seeing in than terms less of ballpark. across And [ somewhere with call be and So X.X%, likely PPI maybe that X% book then of X%. think actually you're the in ], in X%, will including what rest be of

like not going over talk -- think is the it and extraordinarily that's conversations it's challenging. And customers. Kevin I how to So kick about the with to equation

Yes.

year obviously our than a there's think had couple highly market been that down successful and exceeded think trucking year thought. of despite coming more into persistently has the Certainly, a factors. what plan we've this we I I been

an So I think year. opportunity that's next probably

competing it's watch year. more truck. we're as but an opportunity more that's Hopefully, that and a than more probably today So And a the where through risk. versus item, move we

cover way, that see to in service delivering and would and And things for But right right focus so come that costs customers us. we really and for then reflected over price to expect price, service. and some able do value we're improve, if on our to And still our the of inflation in the in that service. continues but that deliver down the but those service ways helpful a do be we obviously to that would be we dynamic look time, overall, to

Joe. thing. One last it's Brian, And

improving and our fact things about The And needs our efficiency, get Mike, to many our there, past the myself, safety, the wages the you order listening improving that You is, national get opportunity in mentioned to conversations beyond we're work-life partners meaningful costs bargaining question. employees the rules scheduling. to on we're work we with the for care-related end partnership the Sean the our of also work several of to safety agreements their so type of and the for but spend next that of to excited to topics and health that type have to get can be mentioned of of believe then at And excited in over these conversation. have years next balance, working real those the associated wage us employees on with increases year. able going the union we're that why to once past do really kind X-part we've our roles time union that's benefits reality about kind be we're the together rules, reduce and actually so general benefits. fortunate we of reasons And work one been that reach able some on that

to more on lot that. a So come

Your Citi. of next the Rosa of question from Ari line comes

loose obviously, a curious, dealing that with It's trucking while. I'm market. been we're way a So for

number, little bit accelerate soft, indication pricing are side give then there it's type In And mix on that can the upside year, is is beyond you a single-digit of terms focusing in us could maybe whether low customers. progressing how for on with that fixing mix to conversations that kind of terms you some intermodal do to merchandise obviously, anything more again, of those X% or pricing? revenue the maybe intermodal on next growth

very was to point doing that markets pricing, our about is business. certainly intermodal share that in but lot And truckers think point. day-to-day today, there's closer because success merchandise won't factor market for costs spoke work, had we things there a year, that them November. But having hear the but that to see some our intermodal at we a and in we'll there ] is and end there we're Yes. we we Well, the hope [ some and and obviously, exciting some that within a lot preempt we mix that merchandise very maybe you'll out dynamics of they a least we've November in think great here anticipate good teams But and got the of when are. an customer I what of right the they're ours cover and now, than their would yesterday, basis profitable some on next at I increases brought aren't to up at that

that. out rates. people slower the know, seeing convert and than to probably market, and better expected to opportunities will will the we're that So coming hopefully that more in at supply of provide And think as and East adjust, many tied I volume you in cases, we're

as price market benefit we and that. our customers we others, the from have So business spot follow some

think a be gradual XXXX. we what a will path in than I better it's but it So backdrop forward, do probably saw

next from Evercore of question of comes the Chappell ISI. Your Jonathan line

stuff, things, know I those the about impact. $XXX being moderately that [ auto talk I operating when a lot there's at the margin of the and mix then in revenue you kind it's But coal lot early numbers and a in metals, can million softer hurricane still take million ] quarter, the reducing. down when happen. short-term and of and throw us you from you fuel Sean, from $XX on know the

points substantially about So looking talking basis you based tens I'm we we what see guessing there? today? of kind of or are deteriorated at greater on Are What that's magnitude sequentially.

of Yes, There lot a Jonathan. numbers. are

So yes, and you got them all right.

So thank you.

then year-over-year a normal headwind little seasonality challenging grow on coal. to of That the we're get basis that's on to So headwinds you the will fuel million might a probably that worse. QX and translates Joe as all in in income year-over-year operating of now we're it margins. mentioned They'll seasonality what the income normally, about the result estimating revenue a are a make impact to probably grow for What roughly be into of including that, see there significant to $XX on that million from the add those seeing terms headwinds, a QX. is dynamics $XXX hurricane, And would be than bit challenging of QX basis margins storms. operating worse that means sequential year-over-year

third efficiency terms X% cleanup up I recover working Mike hoping that still starts and and In focused keeping worse, quarter. recovery, of much the we're obviously, the lost down still with took some think volume mentioned, of [ how can revenue even ] on that's in we we X%, been through efforts.

that So help there's certainly operating income it in some a margins be terms offset seasonality we QX. of will to lot can do of QX to than There and it. momentum things are But worse there. normal

Your next Scott Group from Research. Wolfe the line question comes of of

service a count trends as employee of And and think sort cost forward? you're Mike, any know about sequentially, I any to balance and the that on thoughts from then, per So trends? Sean, up overall comment here had stepping trying you on thoughts how to going comp efficiency, head about

Let's start with headcount.

First and what at all, focus people for when is want. retention it's than leaving Overall, comes headcount. an attrition, of we escalated our it hiring we're actually to on rate

leave. and headcount, people bring because that's so the a down So there's rate and for churn they that big are here that then to two years focus in is

Northeast see head we Second, matter that much not I the a that with better get a our see more But every in of as locations good in hiring don't still getting It's count -- we're number. pretty couple we're location fluid. for big I for.

but throughout best You July, we all you -- don't, had and into got operating probably customer the service in remember we month our got metric year, difficulties. these then and to maybe

in #X. up that focus next efficient you what cost sure deliver -- not our back is weeks make they railway anything service, that over job to shape cost and the the than other takes the we're few is to referred to extremely there the to continue getting us but So The here on need. hung get it

see just be betterment to network. And cost so the our disruption I with the there, to it's a continuing

more still volume. where more the quarter Yes. minimize this we As handled of Sean the that, next where we've approach this taken not see disruption be, we've of want going is question. has amount No through starts but to mentioned, to I all be

last for that We And QX We'll there, engine Yes. the piece just head excess reason up increase But a add from modest, you've I'd we're of what hiring is qualified still the see essentially midyear pipeline, the to folks in be for driver right normalize get that the this And piece higher that headcount, year, saw about increase an and gets normally those QX. head company next especially and got year, -- now least hiring little grow an count very we Scott. marked just train peak is when vacation modest. quality and we attrition the probably so that talked on year, time. bit about to right for about. you in expect volume at time will will count I

In related normally of bit different per see terms and few that's a up we comp employee, step a QX, of QX to a little to factors.

some first is winding start capital The programs. that you your of up

operating the to some higher the year, more vacations overtime charge of of well. the storm that at as year, impacts on the that, And time expense this would employees of weeks early driving time in I have of here. that their to add the quarter then we So

those in think but of should per factors, to all it's labor employee. we increase see significant, going little I an So a bit be don't

the question Tom Your Wadewitz line UBS. next of comes from of

there's XQ, of I like any know How this of been might Do work. like the certain of some people work you is really there And on something if and just in other affect weakening It that sensitivity some don't could that cycle sensitivity come you're down slow of have do thoughts seem maybe is a doing projects? I questions it talked horizon to about for think markets think how kind election-related lot and a how you mixed rapidly multiyear you in see a those some Kevin. guess, outlook, does there offer industrial -- kind if in development, about about 'XX. But uncertainty to cycle? seems impact. wanted 'XX, the and long-time degree you Two projects of, projects

Yes.

November, a the certainly it's adjusted the that in projects portfolio, factor. currently. return. a think I in or small these utilization these. for and is will I a either get accelerate see a this portion is factor. ] to have the we've in some what our -- go is projects when when announcements, side, [ already on the is and seeing shovels of the decelerate you -- time the capital doing at think seen of those that work, ground is doing we've But the shovel actually economy And lot But And with to and of ground a the being mean, to economics, which I put you'll very we're want see obviously EV portfolio. obviously, the

or -- than we've are to of So happen. think they're in a I possible. going months they but announcements months I We're slip visibility EV, seen, ago. by that we're we obviously, a broad not maybe X lot think don't XX it other Could seeing X months? have those to that's X way the that

factor, yes, we in spent the capital lot that feel are more in we've for seen be for a projects to to those you So I we'll visibility going tailwinds that a larger November. already a lot think us. given but that's I think very, us what give confident of very And in these

Brandon comes Oglenski line question of Barclays. the from next of Your

this Joe, investors I look, to in. came of are the better think the said, to as we're just differently you looking you know agreement a deal especially worth early lot locked first like but A I there's said there, is question coming get X-year you know here. I inflation I labor And it's industry like you inflation back think, go waited? you X.X% new that two when do one, couldn't if to with, But addressed focus things signed response, relations maybe years why coming want guys I to something on. like ago, in down, your you this you with

the elaborate hope you out other you this of get on can to end? what on So

part when Thanks. you I presidents tell employees, very a talk inflationary which all can and travel they didn't in three to didn't were and value. our they I raise the during happened and during things told we the there. the highly safety, is time that they Sure, than to of that union that COVID, without thing, and topic when a They spoke us essential of always years appreciated period went both last And conversation ONE the there or at days any And were other workers mean, union network and come tell can They Congress all, were Brandon. of what form we having team to first said, the employees they want the like don't that largest the told time. feel don't voting, I here again. happened single shape way, feel been like you, all didn't do employees again. leaders back we on and us, all was

that's that one or saying happy it's really long important way So of a remember last was no satisfied to with what time. that happened

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Wells comes of of next Fargo. Your Wetherbee line Christian the from question

that out you're of to I bit guess you look headway little like that the but in? year-over-year 'XX. to continue margin takes some think what it consistently grow happen difficult into to have 'XX you of puts that about can given a know in Is with today I that little the we headwinds full environment sounds to network. make strengths some sense. weakness I some probably I margins we fourth maybe in of areas, I'm your move sort resume you margin think year, quarter that you you guys with for about means from think of environment a or you conceptually, know that to I makes company-specific talking are guess when which happen asking and some a the sort other see this of of type of standpoint, sort the strength it in as for need to parts here, think again? kind in

But at say of Yes, a anything. and planning your early a above experience mention to process, setup the the is that's investor price longer this of the 'XX creating, question. and term, kind conference the Christian, I still middle the of is impacting we'll product customer supportive. so able well in inflation Obviously, terms very at for CSX in few where definitively in specifically, highlight broadly the what for to say, thanks it's continuing or the speaking, translate not opportunities, to be for how growth as that's service that we're weeks interactions is at would to bit which into

that capacity. that, of of piece the has fact network The the other is course,

got only We capacity. have we're of most have But road some for we hiring. the attrition, part, places mentioned, line locomotives, Mike crews. we're still we've hiring for there Like are

which, that a we can't for improvement that strong Fuel is into together, is margins. all could to of margin of There's challenging it's all existing prices take down. always you things, the incremental more of capacity. we Operating sort it make good grow margin outcome it or frankly, growth, control income are operating first the as really easier So the and goal. us setup for achieve

coming year prices storms. to next they're next construction going be the to we're that out a reroutes, carry If in be us. seem it do these on lot have you next another some that where Export rebuild at cause out be But you of some should year, disruption, Street look Tunnel that year a expected if headwind us coal Baltimore to network of next would year, to headwind stabilized. will for mention Howard the for not to

to a high next for a year that of So than see capacity some there things little the more But trucking and challenging. the continuing watching us. that will it from year. a a easier grow to having We're closely term, certainly, that it to longer deliver the there equation We was is customer hopeful level may some consistent little the tailwinds the winning previous are environment market. service is make and

line comes next Daniel of the Your of Stephens. from question Imbro

I what growth guess, cadence you there's think concerns side. color categories rail then truck just quarter. wins into to the if some Kevin, or I the of fell to I'm mean you mentioned pricing. I out among the curious maybe conversions. volume more just investors dig share in merchandise I wanted around And into some can wins add during they around

in pricing price more I'm that the how market you this business out winning merchandise today? And you past that being competitive is win Or in change any curious So as seeing are you're than business? bids? there's

been a day, obviously only do reemphasized some that's every compete our we that getting of we with great And product by the right? and better, have certainly that's customers. surveys service We Yes.

a ago environment were experienced that great. to than where environment we things. into an some obviously And we sell where certainly of lot count that that's a isn't your other challenged easier years with and in head service couple So

that have ways for reduce the are great spend is things helpful focused being can with team And today team pay And customer the our outside for and and on so more discussions value to perspective, We probably do that. assets time we're are that able to Mike value always service, to his we efficiencies deliver of customers. customers very the we're that that the all willing price, and looking from do to cycle and it. we changed we other provide and in that want their and create those nothing's value the So when through -- their capital conversations. can those are for where

big a dramatic not there's So that. change in

on this, we I touched go as the market, trucking think year, that's helpful. into next I mentioned, As Sean

have customers I've could that which What tighter aren't certainly been We what volume more since got is to merchandise some getting successfully trucking momentum you around franchise, ready over a our is role. to maybe savings, environment the And nothing. than in and as sit is to a move around where this higher market the nothing, do by in you probably that. I When on converting I changes, freight of changes, not that savings done to truck really doing say we've compelled that we've that can are When capitalize that. even inflect seeing and team rail. think you're you're

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Your Goldman line comes the next Sachs. Jordan from of of Alliger question

Just a question.

if this your along give relative in sort international, you're on indicated or that And those seeing of move needle lines for enough intermodal uptick a improvement remarks wondering driving to You domestic the a I'm something you color now to that been modest had or can it intermodal. on things point? kind intermodal. which more little your looking for really at know of I in is yield

will certainly, pull like. at to the that that watch as we're was we've about us. hearing and think and That's bottoming, TBD. not hope feels inflection be but that that's talk and us look forward, gives a the for point, what how There this like that that I reached call item much, it safe -- we're

peak watch for season, will for that's planning we're We we're but occur, but as well. that a expected a optimistic item us, that that, and normalized hopefully more

think lot given and supply some there, out of probably longer during the experienced pandemic. So of lot fundamentals rebalance we took of do the rebalance to trucking certainly, a they the to don't a going profitability influx support the that's

a were an truckers cycle at to seeing learn they're wouldn't than But And I so out other think this the on previous we're cycles. calls seeing ride you'll with lot stability and more they through as earnings some that inflection the maybe I point. sitting this cash Hopefully, stability, well. others say

the of from Jefferies. comes question Moore Stephanie next Your of line

back little in volumes potential the normal diverted then Coast. labor negotiations about out the that the about and to hearing returning of what impact the bit talk seeing a hoping the talk and terms was during strike And volumes of of that you're could ahead kind you of and you you some Maybe did the normal flows to just in called East Coast? those you now quarter? if East see I could

bit and Yes. did West the I naturally Coast. we did with West East shutdown was modest. would it Coast, see some little modest. on shipments obviously, We impact, the mean We it then see move was to the relatively have over from but to port that from a benefited the the some East, moving

You you saw got then operating was back to on the our few up ramp a that ready to immediately. tell and I've for that group days side intermodal

quarter of impact those expect it. very little So us it did recover were But coming would of lost to some the a we out disruption that basis. days through rest on near-term the but

Bank of of line of Hoexter the Ken from comes question next America. Your

benchmark Maybe bit the this a originations side. And How and us the can obviously, the walk little that? through happens we and Mike, the levels export at ]. the levels pricing talk Joe, Because growing of what talked you down to mentioned Maybe the then XXs, times. into stability volatility, see, you just and which the the about XXs service the market given coal about in look importance yield stable on multiple demand? get low we demand arrivals how is can upper with we [ what the and on-time we do align in you erosion service level

subject. my favorite coal, Export

response market the the and not see do I volume demand when I see think past. supply aren't you response like serve the financing long other is the at market. there and a we the in then macro market global is the competitive the today What and any cyclical the And that Obviously, new of we see for think mines you in over to backdrop the period think good look market when prices a you great are I really into going is do so better supply you this time, environment. response obviously different serve bring that's in when don't globally. investments did on you forward

thing term. So their risen I'm as that longer the creates that, price And stability hopeful his cost more well. globally other is

that's some the is recently optimism going of stimulus, see me what are to it And consumer coal big And global going that for that, is today, the a you've could gives better China And is that been think here has so I right? the we'll where hope there natural pricing seen probably above stabilize a given environment that price and in recover. and talk, coal that they market. forward. Certainly,

global a it's the So we -- compete global market. in

but the us Our market, future. Look, of [ our see me Ken, CSD the focus forward stable as customers business, particular, on ] basic global can, I that on I is going a we'll probably makes met put it we and ] more the compete the as to in or really [ that in do think number. in supply lack healthier environment for supply the optimistic response

lets mile. know bring a say last that's basically want that's first That's it. number, one they -- you if and the one and So we we us what need our the customer

necessarily conditions, the but quite a changes cars between big the trains, regardless there we scheduled we don't run on that get bit automotive network it the a -- of weather we we how plan, So loading. a have

to to. to going the they're So where change than schedules we don't other modify train

So cycle as the on-time as how at important it. isn't look and the car that's performance we

want fulfill they trains those cars need sure is yes, to needs. where trains to XX X that running right. are time, what getting -- are So like we're on be customers' to watching out of you're make the the to We are for on

promise get take to it those it ], to of And deliver, cheapest the take the balance trying can and way. That's trying for you things, back all product then most really dwell [ do CSD to the You and [indiscernible] efficient it, how first that. one look all, there, we're we that's you the service can to number. we you're

[indiscernible] X each quarter. the blurred. have a fund been on-time said, you one. saying been going. the we're going our hurt disruptions if we're to important, not this those see that to I'm Like trying And They're say go where balancing I way but I'm performance yes, service back July, this not but last find I've last it's and they're important, you have but can to reflected since all has start to efficiency been and we we just numbers to not very So not months weather right and here, been now, the really here,

one So it but to is that get a those it's of focus, few results. balance a end we

next Your the question Nolan comes from of Stifel. of Ben line

chemical some specifically, chemical pricing one ask chemical that of just is Is of It it a function impact a to from or just side. healthy ability? wanted pricing. some actually areas -- the the maybe the on evolving? is where starting is I quality to get we part seems little or business market through there see maybe how talk bit where little to Yes. that the bit just Is one the on pricing better area a able have is of a like been

Yes.

that things. other factors haul, from of I really lot chemical play the RPU we've all see of market successful. obviously of merchandise think length the markets been where that there's some don't those our a I different in

the we as can cars them we things and to deliver, deliver cycle I RPU on really there's factor capital, in know appears in maybe look So other before, be across their you better, price. faster basis, as value optically merchandise to case. I ways at a service all deviation our as not can through where continues I an monetize to markets that save get the the when portfolio, and as But that think those customer that big mentioned between we

Jason of line from question A ] TD [ of the Seidl Cowen.

movement [ yields. are could sort be of think fears from you a we freight the ]? anticipation wanted was East about on little that yields? that intermodal And a what ], I to [ there quick of here, then one Coast the do throw Strike back? lot Coast switching Do impact XX mean of I to I West should the date you you How it see so, strike. bit of talk port in too. ILA feeling expect January a X.X to And going the I'd guess the if

that, agreement some item become will the that that eliminate certainly a certain and and I create naturally have it at going, the create freight for move and of don't inside any be that's -- and a uncertainty well it us. When wants some look us. but for could obviously, to efficiently. how again watch I the think about that movement before I'm to freight, port hopeful will of

so the Coast seen East outperform time. And you've Coast West the over

world of on because the Some seeing, and from land shift of wants Coast. of China the more parts the of that other that's manufacturing and some naturally you're away East the

that thing think from us continues China factors, see decouple great and as us. a those everything you and trying to for that's from I

East and continue ways, truck the to look are not the on in if [ you That wants do even ] Coast to customers investments But going the value, to that's made other and then a East efficient That's our many that of I think freight that's are port move again, we East Coast, here us. I we further that East can the a traditionally ports look thing over Coast with well. so us. the would time, to inland and if as I an as for the in move we'll more our is an shifting very, strategy would versus west areas. it's opportunity somewhat time. in to being see bad outgrowth, Coast over can and more we're freight agnostic opportunities we If because for that lot open East a push over and play those out supportive the West Coast move in to at think increase, way. it [indiscernible] continue efficiently have that differently and Coast, in Chicago at participate we of volumes going we'll for into very create opportunity, up the see think And to

we're noise this the that overall, through negotiations. get we'll a think railroad. and going the trend benefit don't I as So think obviously, continues But I to the on labor from --

comes question line from Capital. next Spracklin Walter of of the Your RBC

the business Are on seeing see competitor or to a truck, marketplace. the is -- was side all? terms either better their come seeing know opportunity larger Just wondering at on I'm there much that a of I a impacting of main are improvement you contracts that you affecting if I an on how you're changes in discussion competitive your impacts to or in is up know there quite is [indiscernible] any risk some that coming meaningful that on marketplace. leading as but up in service. the your in curious lot you on the is affecting competitors get an any marketplace Just rail here? handle operations of

Yes.

to achieve that they trying the I day. we're have objectives, very though, think -- stability as customers compete think understand continues grow improve. I in And what have with we mentioned and of message consistency to before, very, we the leadership our that knowing the I is We our have look, compete every good to service and which seen we team that them. that

team I think to very and going and understand be we've stability the leadership built. you going the helpful they when there's those that's among that where that that get team still discussions into we're

to We cost going think cost. need very, to very And service we and going compete and we're to winners have in in very, we're we be compete that effective can So those to very when both cases, competitive, continue on a I base. situation. be

along want focused, obviously, grow opportunities, business. to move is I well. think own those the really retaining on want having rail we're with want moving freight the our So helpful market. We too. to grow business to retaining as that's that not the on in discussions other pie. And We We

into pie. now right years we're the We've as next success this we have growing success. is of success on of to the and lot continue move focused a to we're that. where going year, that lot had year that's think we're going So a beyond have And I to and

comes line David Bernstein. the question Sanford next from Your of Vernon of

can how net you measure stuff scores, you however rates rates, So as in internal maternally of a if on you the turnover sounds a kind some like changed of some Joe, those wondering result the promoter I'm that culture of guys part has investments? of ] equation. invested share churn perspective lot [ or it the

I many at measure it you you I've is of measure. it. said, know we David. mean look is we've That ways. of you can't hard it, love, likened kind in kind to we times, Yes. see many but to culture Thanks, as First which really of all, when talked it being many metrics, but it feel about

in start attrition, just be they've because Mike we've team Promoter on to getting form we the best still efficiency have quarter-over-quarter ] more in been that, them union have customers look we Net we've that's moved mentioned everybody. and ever had years have impacted do and there, training And valued were they're environment years. sites last all of looking us X-plus two on I our want to we and work they both in we really is mean, feel really the a where key it, quarter Promoter longer if listen important. But side to better they two our it's union numbers at if our from example, to months rate that Kevin management give to meaningfully attitudes hires the the important that. Attrition than side, what efficiency For all going conductor. you And we're again, our And and part on to hires, where Net feel scores hires. on both also importantly, we so those but invest we're since new especially after up are ago. better with them, at They're do customer for a in some a for mentioned of side, and us we employees by come of but measuring new on Scores this as in year, our the not do. [ in safer employees. term lose those our them our work side. over significantly appreciated, if and And gains outcome the and the

are CSX over the All business results People important are they're on notes and we're come kind days, that. they feeds from feel our ultimately measure is for We've things for important a sorry, that the for for the number. our that from us service generator their be attracting also ones our and in it's one to work I'm family Those this to know -- tell provide but because said people how important very many that must whether is And reaching environment their or the business where service their retention, of strongly attrition and they're receiving hard to making I've anything. were customers. again, the things thing, regions people you employees XX,XXX hard service. again. proud hurricanes, the had want are seen important that it's there communities out not they XX efforts employee engagement we've and water a telling important who this for are notes it's to a sure but cultures also you of. part it's we over in our need They're the wear can and in they're every together. really impacted team that people So into I And or they're would retention by important with the those the and all gear work if in talent, and seeing they're have roughly the put we year, employees that attending, but anything, the thanking a have receiving business. energy for employee we received us times,

the we've to thing back of up it respond and working revenue where issues it's at X the Sean have the quarter. a mean X% and a telling lot million worst. you and most are you second here the believe time, can probably people the of of -- And in quickly impact hurricane $XX things that's and the XX-plus hear the an being last have we in we see I yet network seen how Katrina impact to you that our been also the numbers. complicated and and merchandise environment on how can been our tell hurricanes weather I an And long but quickly quarters is now mentioned any around about the running. years, you in So network a get want dealing it with. heard today, scale about at don't intermodal we're in you CSX, you've in quarters resiliency more me X that Helene talking and row they've we're we by row a we more see or of grown in -- and impactful about it,

significant some have with working a we people Obviously, ONE and come part a noted, network, that's don't Sean CSX spirit As of they're people to motivation. team. It feel the if capital together cost rebuild but like doesn't

because in when culture hasn't the important. safety, before things we our that railroad because are So the The of happening That's are our also and that in the from you working service last That's dramatically customer Mike thing of deliver there. together. been are months. in it, injuries That's severity getting rate really industry. but and over dramatically. we're out is severity happened of moved, mentioned of never builds they national get the their we several kind how the done Ultimately, rates Those working injury actually together down And rate really examples in agreements deliver. plays expire. culture moved people

concludes we further time Q&A. concludes for And today's with thank you that our conference you. attendance. questions, your Thank for have We call. This no this

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