CSX (CSX) 21 Oct 212021 Q3 Earnings call transcript

Good afternoon. My name is Emma and I will be your conference Operator today. At this time, I would like to welcome everyone to the Q3 2021 CSX Corporation Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-answer session. Instructions]. [Operator you. Thank of Head Bill Investor Slater, Relations.

begin may conference. You your

everyone. you. And afternoon, good Thank

Chief Sales Boychuk, call Joining and Boone, Officer. of Executive On Chief pleasure my to is President and me slide our Sean by Executive Marketing. Foote. disclosure. are Followed President it's Financial Foote, non-GAAP With disclosure that, on today's Officer Pelkey, Officer. Executive James James Acting President of Vice Executive President and our Chief Vice on two forward-looking Slide and three. Operations, introduce Jamie Kevin

you Bill. And every to port all Thanks, are lead of lack our us by their Right. extended shortages presented congestion, joining thanking of to industry, there key strained today customers by the thank storage CSX want Across navigate to the materials, times, I efforts who for employees extraordinary challenges call. are 's labor global of and supply all for and capacity. help virtually begin chain.

current operating While are idle. environment sitting we the is challenging, not

We congestion, and Jamie reliably taking service fluid. And come. drayage revenue actions we to challenges. our as Kevin discuss adding is through in a to our to are CSX we people help to hiring provide some new fluid. needs overcome terminals customer initiatives, and will container and keep network to of numbers help to our we're these provide offerings well both go And are customers, the of ensure an reduce to keep are the taking intermodal as steps and them update to will network to able yards for capacity minutes, new years meet today solutions designing In investing few

operating begin to carriers basis increased improved the quality to it an points, a $X.XX per transaction Earnings So, Kevin. presentation the the impact XXX to to X XX.X. income. income results income -- third XX% operating These our which billion. by take of on operating $X.XX. and points on I'll significant first by quarter have with basis did figures let's now share XX% XX over include quarter ratio third results. approximately And not Operating ratio to slide turn expenses. increased integration of increased overview excluding But and

Jim. you, Thank

serve, X% Turning represented equipment of freight lack to and XX% with a flows roughly auto, to showed total Merchandise uneven revenue impact higher third-quarter X, and Slide by carriers, metals labor X% year-over-year, equipment offset quality and and market construction by across was challenges, across increased chain revenue other driven volume revenue increase. of declines on all growth volatility and points products major strong its or volumes. revenue minerals, continued such Inclusion shortages. we increased semiconductor almost driving in year-over-year X% all The of business. and lines Supply industrial ongoing the including of lower all related growth. markets, the volumes as as every markets

the and XX% the chassis broader from supply warehouse benchmark and on declines lack higher combination capacity. other and truck crude increased higher Other meet strong growth higher due the all revenue The in ports. more supply-side the export increased in coast was from benefited challenged demand. replenishment, storage resulted shortages, side including and as constraints, disruptions inability to volumes across of Inventory Coal the coal growth markets. rail increased increased domestic east demand, container multiple shortages, from and strong chassis coal due Due and have international on driver markets. primarily In Domestic equipment usage and was higher X% to utility chemicals XX% of our shipments volumes, business demand. prices. demand as offset export revenue but higher with availability, addition, intermodal in end Inter-modal revenue of grow, increased chain higher oil XX% from a partially to industrial volumes. to and energy-related result by revenue core

supply Turning experienced extraordinary trucks X. chain chassis, challenges before. face global to the challenges as This lack at and time supports production truck On we warehouse, Slide to customers have never and to is of to an containers, labor facilities. drivers,

container Across are by wheel lanes shortages to new customers solutions capacity. chain offer on accelerated address West highly to move CSX To we And volume investments added driving To a marine of port their cost. the The lower we port We with options new, alleviate implemented driver Transflo We to overflow the congestion. container utilized the supply we for and new XX new to at additional new options to that cargo. shortages more seeing deport entire congestion added customers have been added Coast everywhere. solutions have team have the repositioning shortages, containers. accelerate yards, challenges steel the innovative partnering sites to terminal delivering address freight focused has railroad. address truck create network and

We are GPA to partners, utilize port. reduce at rail and Lynn congestion help with yards to working the closely including additional

been investments further we customer the in making We expanding supplement our have are significant customer facing also aggressively solutions to technology. team

disruptions new Our the near and supply diligently working unlikely create team options to improve for is shippers term. to solutions chain with in

discuss address Jamie to CSX to starting making production are new supply to CSX reinvest in that long-term shovel-ready to hand and in solution served I needs, signs and customer customer onshore select With requirements. develop see To solutions. sites chain customers we offer invest we investment these over meet will of operations. early that, Finally, to decisions to continue it

Kevin. Thank you,

disruptions, our new new customers. overcome to together noted, chain ways find and teams solutions supply the provide As our to for working closely are

hiring. expect the we was regional have addition adjust help we drive to reduce our the exceptional touched inter are further employees in at in team required keep on and cost underway And deliver they're challenges environment. Delta by marked market. of want the had to mark things demand. challenges, to Kevin off, decisively able quarter. creatively we how the the supply doing impacted are several this to labor quarter my challenging Despite to to maintain XX% peak, the that ongoing highlighted network including required tight these And initiatives able past work efforts on a modal The to the containers continue respond and to COVID has I'm by team act plan for the moving. compared these rising modal At to to year think going These They variant. challenges, proud rising freight. the thank I by us And been In entered concentrations their people forward, ports the inter compliance. the due to congestion them... we're a to network customers We accomplish focused hundred get of real-time doing performance to fluid to presented overcome nearly many trip the we line goals. prior our to

Over the eliminate year our offer. significantly to unnecessary application the and the of course from we time to recruiting steps have shorten redesigned process

classes have size pipeline, implemented by higher have visibility highly better and recruiting are We at frequency XXX% our and higher different conductor increased improving the rates our ongoing expanding These new candidates. through also tools identifying and almost our since efforts successfully conversation new referral qualified that application of and strong July. provided programs

customers. allow supplemental to to us our headcount and keep are and We terminals containers fluid increasing labor the for continue moving intermodal also

are While to workforce. taking these availability steps hiring initiatives our of underway, existing the we're increase T&E

upgrades also have which our making implemented more move programs, attendance to customers. throughput existing for We're new utilize We initiative our to better capacity. base increase and network to additional freight us allows to create headcount our

equipment automated intermodal capacity. we terminal to converting order our our throughput. more installing at to grounded expanding in autonomous investment yards. We're facilities And increase intermodal terminals are We to hump in cranes increase are

network scheduled Every to investments assets continue network have the While train the sidings running our come. maximize plan, with at we refine will select are a we we capacity, place in by ends ensures and provide sufficient years line network capacity still delay, take investing These growth in performance. are network. focused allow us to right and that to begins on growth train for time. reliability a strategically Running across road to in and the locations balanced action of plan extending siding minimize right is

to network continuing open intermodal meet scheduled railroading These and as balance to well demand. maintain keep network running peak of the to enter we current add continue season. year, resources as the the focused us and performance will and on principles principles are We we this into have allowed we strong

decrease sequentially, the in safe and In safest a is injury to rate operation to goal the foundation initiatives operating of and remain the to Turning safety pursue, drove we any railroad. X. personal also a the improved being want committed other success ongoing to injury quarter, we severity. third Maintaining Slide

year-over-year. last the train compliance, improved increased accidents. human rates remainder for Focus and record rule factor year of critical the rate results, accidents While accident quarter's will reducing from slightly be have

impact training now for protect are effectively that these I the changes, We productively key communications will behavior and our in-person allow safety information, and but electronic better Not to the approximate only employees. Sean messages. more and deliver of also to communication combine to tablets the we're turn increase to to call leveraging the real-time will over Field our X,XXX on the the programs lasting did tablets employees able drive distributed more financials.

afternoon. good And Jamie. you, Thank

reflecting $XXX XX.X% carriers. XX%. ratio prices, Looking all fuel is across quality of income Revenue of operating at quarter for third The major higher impact and record million gains nearly up the income statement operating on was XX%, Slide X, a grew or CSX. markets, the

growing on focus efficiently the we and operating business. As

XXX As quality. a approximately the basis ongoing an impact from of reminder, of points this includes operations

year a average quarter as higher for Looking expense expense up and earnings. -tax as average below to income tax to pension balances, lower An other impacts. The favorable rate well effective debt XX the tax lower was on last and the coupon, weighted pre line, XX.X%. was favorable million was interest due

by slide, locomotive was Looking quarter. detail on or increase million the more in of cost expenses the million Including $XXX increased next expenses, quality the Total Higher factor, carriers. in XXX about approximately driven transaction-related items, real XX% Non-fuel last X%. at million estate offsetting were around XX higher. a gains also prices significant Partially last fuel remains million quarter versus up steady inflation XX these were versus year. at

lagging higher going inflation into As we may some time, drive that year. next have I contracts mentioned last

train As continue to and engine Jamie discussed, focus employees. on we retaining hiring and

the quality was count addition sequentially, roughly was and in reductions of count the excluding business. carriers. head by areas up of conductor The was other flat offset While

more $XX As a result, in we costs versus last retention hiring million year. and experienced

have in the the purchase MS&O other. identical we are new better line prior that line expense. a acquisition note to impact. intermodal You'll terminal up higher expenses this reflects as the as the costs to on costs category. locomotive higher The prior the Increased this includes description post-acquisition. base on renamed that reflected asset MS&O and base well was of services the But and quality, line also addition Depreciation

to proud we're for reflects record by Finally, quarter. commitment demonstrating and CSX, efficiency focus sustainability report fuel in environmental another of our the advantage ongoing to and the rail. all-time investment continued This

due we well as into labor, capitalized Looking year. quarter, a fourth this as holidays should that in typically seasonal to trend the continue weather, lower increase vacations, operating see expense and

In gains to addition lower normal chain of on incentive than Peak-season in property likely sales a ongoing as headwinds also expenses sequential and supply expected result to disruptions. from quarter. higher compensation be higher fourth are the

XXX% shareholders. net cash Now, XX% we balance the Free expect Free nearly income is step-up of cash quarter The year Company's basis. this on up and basis. X.X to a remain dividends on exceeding year-to-date in on The operating And flow level conversion flow normalize. in turning is cash full-year cash lower With up reflects beginning billion acquisition income a the to before is XX%. XX. to flow billion to a $X.X this it distributions balance year-to-date. Slide on near

infrastructure, cash have We in $XXX returns funding to capital X.X approximately $X.X including million exceeded time. core in year-to-date our billion in billion, buybacks After over expect dividends. normalize continue fully over investments and shareholder to

Jim, for will to to let remain With it be our We turn cash buyback to that, balanced continue committed his we shareholders. back closing returning our remarks. excess approach, me and and in to opportunistic

you, Thank a quality we for outlook full-year double-digit maintaining Concluding Great. growth Slide are the impact revenue Sean. carriers. before with from XX,

inclusion $X.X conclude to will We be initial the same we the just and I capacity range I the expenditures spending. to of carrier’s materials expect reviewed, quality billion top our remarks capital at capital to the investments cost began. my way $X.X due of end inflation,

the goal. overcome heard are as We challenges. committed entire chain today, helping customers act. our And our to team current And will aligned is continue around supply we to you this

have we pipeline, network hire match to until We have a strong we hiring staffed will and demand. the

of rest that strong customers the customers do throughout capture will commitment high-quality to demand. attrition year providing Economic above CSX we higher a Everything this year. remains and to service. demand expect begins We with help a into next and

momentum We positive actions will on build the date. to from taken

in to Thank provide resources that you, CSX putting continue offerings supply chain. growth, drive a will place makes part creative with meaningful We more Bill. customer will and new we of customers the

of now Thank question. you, I take interest themselves ask will time, to Jim. please In to everyone the one we With that, limit questions. would

moment roster. [Operator Instructions]. the a Q&A for compile to pause We

Your first from Ken Hoexter. question of comes line the

Your line is open.

Great. through even Good solid like rising how some much Maybe were of moves, there's or see. a to maybe this still of Congrats seems about obviously on address than tough your on into some afternoon. thought, you're you categories running kind the some of XX%, just in market, Sean, know talking you a Great coal maybe just results pricing. delve really there. and touching Jim thoughts outlook. follow-up. the can I Maybe Either and some up pricing Thanks. that opportunities it faster or just of different to catch the environment.

you. shot a Kevin. this, I'll Thank at take And

the and we've persistent alternative. just our is not year, next probably I transparent top rail. is inflation discussions do surprise. over what facing expectations in have we're strive risen resonating to higher last number likely into our add their year. be to that great cost of this what the proposition conversations think the of that and our it's the no our Cost see. surprising cost we next be customers around have saw in clear higher exciting that we're you of pressures environment, and quarter is customer so And arising inflation, offer. is though, inflation we around get that we'll having we periods is there. the inflation inflation are is last that. to are driver is Fourth a those But for seen discussions. on really into customers. as ahead, Then some well a environment higher-cost having a cost value of looking we And quarter the with They really proposition year that environmental be us, renewal then the years. heavy offset to with When first increasingly same rail part that, inflation the we shortages customers a shift It's on conversations value volumes the more years see over in year. those. to top the and probably that It customers is what we will with with to last of And got than than that

detail? a thoughts any pure trend kind just of pace pricing, that guess, on I acceleration, of of or the follow-up. Any level of detailed

the Well renewal into touch, will we we heavy mentioned, to X a that's discussions. fourth get quarter, have and continue contracts as and period those to first I

probably will that. I think I leave it at

All right. guys. you much, very Thank

comes line Mehrotra. from question Amit Your next the of

Your line is unmuted.

you. acquisition. those carriers’ more we carloads a on And you've [Indiscernible] Thank to carloads. obviously big margins great great a you're initial quality cycle idiosyncratic us some converting if the revenue of there bit seeing Obviously, pricing to and just just status everybody. into year. just opportunity Kevin, when just Hi, chemical you ahead then of little a next can growing you, you [Indiscernible]it's on The got give may uplift, the can just see us opportunity update that's operator. update performance or a thoughts a any meaningful offset intermodal of

to be highly year the is an would What perspective would be from Just opine appreciated. any willingness opportunities Thanks. OR about. next

take that the is as really year. think Sean is customer But a on on chemical focused reception our where been constrained. you'll OR has the today positive quality giving franchise and that, don't the carriers, question, supply overwhelmingly let I'll remember on we're Maybe next I but guidance market in

moving move Our Randy their customers have Transflo and and team and with were options number looking freight for to a we're our combined more today. of options so team found freight, his

I everything obviously to right thoughtful say and bit thought to tight the in in ISO it thing coming the ramp a from contemplating about on is that a up. that things in is take backlog standpoint, product, customer's now, will next seeing with really doing the is we're and The the we the think it's continue we that way true. market. I there. only we'll that going momentum little and that to But a we acquisition service long made of equipment conquipment year tank Now think before solutions where the good a build that out calculated, When some we're

speed adopt, exciting longer I would have that, than would this ahead. their and markets take believe for first lot take is be customers other -- to is adopt, adoption in been set for off we into really to So longer say I that would that there's us to leaders the full everything to which really think tone market. the is industry, going the a

thing that love we Transflo this capable shows in freight I our continue think capabilities ourselves. to and through And be market The so unique is solution of to our think we're of momentum to that it we don't We I the is that as have starting the do bring to partners partners in that we other using doing have is have well. positive other would always ways. that seen all different

coal. the another is way about Maybe but talk Coal lag to are [Indiscernible] opportunities. revenue can offer a guidance, to obviously there's this want it you ask do -- to Sean, -- you maybe on

don't you quarter coal up? that cadence you to our some see year. caught going us talk we though yields fourth the to maybe to in answer -- are question as about want of because more next Just gets uplift wondering, lag Just in as the

there. some we've the quarter mentioned you've the some market. strong coal tied prices side, export versus the seen to benchmarks quarter. And fourth It's and prices before, on see sequentially the Yeah, as the our will you clearly favorability on favorability in on -- a third

the see But into how produce We in year, at some next coal levels of production are year that to we're of holds mine, these favorability But next up more here probably can levels it is third that extremely elevated it's there. -- today. up held trying to the hopefully carry everybody those continue these here. long and the we to really serve trying ability a with that probably working it you weren't create favorability will have as move that some producers hiccups And some as in struggles had. at see We're the through of diligently there's quarter to and as more could been our customers. some the and ramping

much, the Thank very time. appreciate Okay. you

Your line Wadewitz. next from of question Tom comes the

Your line is unmuted.

Good afternoon.

optimism this how capacity for reasonable You think for it's guess it do intermodal good to capacity that constraints constrains you how but easing as get looking acceleration? impact constraints do maybe is much maybe year? you. Is How you alleviated would around perspective growth your quickly, pretty probably think also. remodel, on been others areas Thank have -- constraints to other a primarily about next that I I that does capacity of inform may you forward well. look stronger, on into think you but do you 'XX and of volumes? the expect have as Kevin, and you your meaningfully have

Hey, Tom, it's Jim.

this being coming clearly see early of we else workforce has there our of There pandemic. could all more strong out shot. year out that constrained. so on other not for saying about, better. work gets talked much is our ball bit we're a Jamie everyone and of hard for there The be move the go of bring forward, able into ramp to and like the that thrown what X some yeah, this that continuation as fruits to would little for Let much, a field the say world reason deploy year there business take people are as us. handle. we're transportation or inability, And primary continue in trend more demand I curve into starting position right that been our now to of those we're to we to at actually into a exit hopefully the services me was quarter, we crazy fully I XXXX. this throughout be year, a and people and operate the even the of better unless And some as take more beginning now, declines expect advantage of able phases last are steep we more, people months seems will know next And XXXX, out to the business up

think or lot control visibility other that labor, of in to a Do drayage warehouse have is it you pieces? labor, the your is given hard

right to every employees and every have us numbers every school, we're are increasing. at everything hiring in seeing a we the phenomenon of those getting beginning the customer now The get fluidly business people numbers, up -pandemic down, that to My the train This numbers -- can taken reengineering plan the XXXX principally -- performance, on-time to metrics every trying a that so get having with priority and I X the of time some dwell, to am difficult number do the we on all people are that we back to would for when same to put service were employees a fluidity, the work. first of Every is -- hospital, we work we getting out of complete principally can struggling U.S, business performance pre compliance come -- there, everything of has and are that enough the the the result every our It's business, in extremely operate no I come is us. done do that think. say confident this an onboard to process, that's everybody least different is XXXX. we trip get the in review metrics this putting of I CSX than extremely we conductors point. training to of complete difficult for and end more the been

training and hope be process, of disrupts we this I that last In next of in end X the our along the at lot work. the employees been unless we're better year, can over said, I comes of a programs year going shape to them than qualify into to to of number that put that Like beginning to months. the begin go we else terms something have

Great. Thanks for the insights, Jim.

question next the Long. from Your comes Justin line of

Thanks, slower and expense. called you understand just few it point here OpEx around you I fourth-quarter. headwinds I the gains Sean, quarter? order items comp, in those way to sale, and was good afternoon. out on us finer incentive think sequential a believe to the then help in of a season put Any next some can magnitude X the peak

Yeah. Thanks, Justin.

comp, the supply the got right; higher to and some then sales, chain. property gains additional incentive costs You items just lower on related

of all from you're If together, quarter those to what quarter. looking would at fourth above a pennies over the we you couple the probably put and about normally see third

up sequentially revenue as And helpful. pretty I next know on quality, on and took decent here the other was it maybe step Very elevated any into fourth year? that thoughts well? X thoughts and the quarter a in then Okay. the but

talking here. about as use direct on as going supply should demurrage. you other we've not pretty tracking intermodal storage the tracking quarter-to-quarter, driver, and should If been charges line at look as said well And what's pure result Kevin be chain just is a of really premise -- line, revenue the the big in which considering that that's consistent revenue the there, revenue the

place from But line probably improve, things it -- October, start where revenue we'll the So that in -- same come goes we're other in we QX. here. And sit line as here the to we in about as are down. we see were will

Okay. I time. appreciate Thanks. the

line the Group. from comes Scott question next Your of

open. is line Your

guys. Hey, thanks. Afternoon,

on headcount. back Just

that can above get directionally. guess, way X it to increases get, and I you you kind you there people of is all want a about, the headcount One, sounds What percentage that do are thanks. attrition like thinking how means you'd headcount? in much to be about there, like If growth -- like thoughts. spreads volume to you what Thank things add to headcount, to understand can think Just excess in you Do X% grow of and to and you. the you think still back you think that? volume if

Yes, Scott.

we're bringing getting to looking XX modest We're headcount, out what sequential trained trying fill week -- classes is those So, up of on folks into increases on right? every and the basis in field. a and then

increases you're see headcount. in So, not dramatic to going

capacity I assume the for capacity also doesn't we've need our growth, got -- think trains fair not one hiring on network, still but be on we existing one. it that it's to it's so are to and for

Okay.

So, didn't but is year where volume ask next so you I could do well, think probably excess didn't year you I -- headcount? it grow a and of

I wouldn't any be reason don't the target. why see that

you, guys. Thank Okay. Appreciate it.

Thank you.

from Your next Brian comes of question Oglenski. the line

is line Your open.

headcount, Then can if Kevin, the some you there? a you think Scott's does that longer-term what know be the that's want Brandon. OR are cost was leverage asked, if structural guys, the to near-term. mean of already sneak question that quick Hey I ask about just things I going show to it's a but building one I off don't the implemented hard guess question. fourth quarter commentary. to could in it I two-part with guess, I

Yeah.

-- given going Just the higher than think we'll guidance, I OR it's on a question, not but the bit an we the some little the to we're quarter that's quarter. just normal OR cost give fourth assume OR probably fair well to pressures of as third as see sequentially, seasonality, the in

team I going to guess question do The we is -- can was, headcount? what the more with Brandon,

strategically. Yeah,

us lot we and to more better any looking inflation move offset to When now, have. to for freight. are they to product 're talk trying the be cost too. of right sell a Strategically, The for we we're going environment lot they're customers a capacity, go couldn't out and

us. going we're we're the going customer. more freight share It's perfect with a environment more wallet move for So, get and to to

Kevin. thanks, Thanks, Sean. right, All

next line question comes comes next -- question Your from of Brian from your Ossenbeck. the line the

line is Your open.

clearly this and Hi, the revenue capacity week put of OR your of been Jamie in on regulators about See can point, additional maybe some need what week. cost and the own next versus obviously, have your you do thanks with that you own. than some up But growing out a of your but question. big the your bigger interplay the supply for STB question focusing if on mentioned, on think you're this for with? like a partners, taking growth. capacity the to and just perspective ramping peers obviously And that Do there on need later out help you pointed DC. here some everybody just lot demurrage and chain with what some you then about there other just ask just wanted where it on on is that picture contrasting you solutions looks fairly maybe at have comments less you help

So you maybe adding all in what this? if address help. the capacity of terms regulators all from And think take Thank need can you. that you will away

was we ago. I without we've improve good Street do over us did the facility, X curve. our intermodal We the any expanding The increase -- Chicago, or that to We XXth of down think another been to in a on undertaking way had of property -- we had to which the the all our yard bought available. go, prodding capacity. that so own biggest Kevin it ahead right two street, activities terminal years terms job of months the for capacity, cranes ready outlining and very of were here last

visionary trying in we where that positioned. tried growth and to determine would make we've sure be to somewhat properly were the So, be always

yard, there, intermodal traffic initiatives, we inland Savannah these Kevin of intermodal wasn't new a created had like into about from in a Some facility moving yard we an Atlanta, yard. available talked an

That's are always the necessary in to it we're or that railroad fluid we service better been planning our that's whatever the case, always -- changing we're to and the in up just trains case, operate will X over last as sure so, use the the a continues time. steps reliable that comes run the being manner. provide growth to and across more have traffic available by make be and track moves think on make that simply the merchandise, by taking mainline to on. and of to business, sure railroad, our the it enormous the appropriate a efficient is, rail that we that's And an order network, all thoughtful The whether capacity process more we methodologies the lucky is capacity running have handle freed it amount we fact that always years,

we were by one -- for ready don't year-end people growth. We've COVID, hiring. been we in moving that all you when be employees And freight. that we future in Plus, thought, rolling me I I the had would to off work we big XXX decline back in sick, call as I so, one what just you. is the much do so hire investments we'd trafficked rocking a so the railroad believe we're one we've going trainees off you believed, to we'd up big, we've dramatically. got want and the need head fully and was had furloughed come always big, our to somebody, heads want you storage, that would go. that it gave order to railroad XXX going employees about on in No the that point at no as I a locomotives and to fact where January, XXX done; time simply as handle hire make in to service says, from nobody to The way called ever conference out employees. in and this be had of

back whatever saw usual I've Jersey you was this phenomenon changed chain, This -- trying -- on what enjoy is course you're deal This do, nobody the no, in is else. phenomenon call than whether now whether this the a whatever and when the whether to something go everyone operator, that Company, want back phenomenon everybody to is port, going whether do phenomenon a is said or everyone to we is a that you're to a norm. and them I've trucker, a steamship the might come a supply warehouse that your a go new and impacting it with decided is scenery is coast more coming, said CSX. they it my be. I'm lifestyle. to many unique So is that to work you not you're

and about So, -- that's it, we've the everything had done have we to way think but change that.

we government to need the we As worse. want this I what figure order forward we'll and does as be we year. to need and I'm don't the don't move just that move -- in that changes, from better we up in -- supposed reasonably we I to why we out something government next to adapted shape recognized made pretty it any always do, we situation, confident that's make sure screws adapted, we're in and don't do, year the in this shape good the I help as

this we to sneak you Page or all do Jim, case the forward going do quick of see future you things Thanks, that be you. on these think what you plans, think into the is more in, I a one prior Thank of and could permanent from had X, if would one of Understood. stuff reacting pulled here?

we're what in is all simple can situation, think the we've last plan, of -- in would black Unfortunately, do think most as can that. the that's things. people years events than I we had X can swan we're more kinds responding we're experience a I we lifetime. think, doing We

I was So, I thing? what's as the -- said, telling I -- off remarks am employees. proud how our started next saying I my of

the went these was the all issue this these don't know, the warehouses of trucks changes, God, first to demands, out up. going as as railroads. on, Jesus, these there. of goes, saying of result we the you all a If it talked buy not the on, job. of of this We with bring screwed and and sure the the about, need these challenges, complying in else's there it workers it supply good associated my box an figured railroads. railroads I'll entire all stuff bring have that it's all going most issues requirements really to warehouse have with critical basement, thing economy of All don't Oh time I'll railroads where have pandemic a own I the been somebody been not extremely problem. everybody the the to are bring be doing But and there been making put out been the all have and home entire keeps throughout the in lot, of of truck this Their is of the all chain people the Then parking growing. employees there, working, everything that

phenomenal unbelievably be industry's railroad an not And under difficult could CSX, guys, just circumstances. entire up been railroad so, the job but

Thank Appreciate you, it. Jim.

next Wetherbee. from comes Our Chris question the of line

Your line is open.

as ratio, on before. think struck afternoon, environment, and context, seen call And is an impact But how Thanks, the haven't business think forward. you at Jim, I side has than in are rail of guess the about the core certainly elevated, we me that picture we operating pricing maybe the really I guys guess XXX some running basis you I points guys. the and that operating quality ratio. of thinking sort I be I should particularly and probably the big mentioned on so the was that operating on it more sort on understand assessorial ratio impact

bringing a bit your to cycle we new seems long of of to than you're sure new what better little pricing run? to good. some maybe these think a very, very about of and here to about about I some margins going back, arguably peers, be talk take understand a service need way volume Can is forward. and capable on going margins guess in new about folks is OR be talking think time, we terms period for a freights growing ability are You but to good want this and the the of what incremental business these I opportunities, make I to over just is

the transaction costs that math, you some too. some and of the and excluding things was did other Yup, yeah,

So, this it's go, efficiently. When can the not said when how can the we're very of hour to a a every because getting this how when day that, you've is our always times. trying we reason in unfortunately results pretty all we we're you as do times. OR, running railroad the good service heads When Yeah, we is is This not single railroad product we on single freight. quickly as doing you and in and million as efficiently can perfect not service can. stretching you out. but simple run many good, every there and as customers' now, million, stretch, we're move right low focused take we've It about is stretch, math. it difficult And we a product, about like

says just score operating a you low as the ratio, You result do got a the And that, that's that's not up a it of that's result. efficiently. goal adds but

said, now, we up try every I could you good we move customers. out solutions have. do yes, freight. provide figure there so And trying how a do we more is preferred to out to Kevin And as constantly a pretty right number. run to would've single to can our business try day, we lot we to more

That's revenue simple freight. to in efficiently Our is you that, do. is more top, goal more more the what the operate the we math. move, freight more it's move is here the we pour freight, We move you and just

what operating about historically about what than to the Think can it's what how be, about, Then think about cost might the -- think able industry the were could ratios for if operating you they ratio more be ratio So, take start about about railroad stop can out. they what the was? grown. you worry to much talking you want operating thinking grow

color, Okay. very Appreciate That's it. much. helpful thanks

the Your from next Bascome Majors. question comes line of

open. Your is line

and for are down big Certainly, that some as why there that a this about it hiring feel been challenges point, fundamental to like at topic January. taking that Jim, question. maybe a the And earlier, rather But doesn't on you've you you in having doubled labor today. difference. Thanks of today. and as July my than talking much difference our are a about competitors growth it's to been as support alluded U.S. talking Yes. since that's they're messaging

You've STB got a about service letter on Monday, specifically. CSX the from

difference, the us with you U.S.? just public can helpful? labor understand, it be us help this So, versus help peers messaging anything in with Is the would Thank to there unscramble your is you. your situation different other something

hire, from very we we hiring. that Yeah a for trying said able myself, had like beginning the and hire needed I of of be unscramble year, this had. in always thought to terms well, I'm We would challenge to we it I've to

did, able we We and quarters. said we've always now hire like X that to for aren't

my You the to metrics in to most service whether the have metrics terms velocity, of be whether reported as of railroads, be dwell, it'd all it'd my are areas. STB continuing in lead

most. better running railroad here is still the than So,

that people time. expected, During of out Company time, that finding having we We and having in the career choices during make of here period world were to period terms where epicenter that everybody wanted of of the that was of were difficulties Jacksonville. that pandemic hadn't the lot else we we were leave a the the in

why that's I'm time I that be, hit during not think a Georgia, little severely a of out probably little Tennessee, So, the Florida, states had calling we Alabama, that and period facts. have just of the rougher Mississippi time, any got more might reasons Louisiana,

our respond, midst and -- our service with They letter a they're the letter. respond. the I the work And that little regulator a will got in found in of as we ongoing world pandemic it come we'll we and based the address the And yeah, under what? want them in metrics complaints got so, our STB we're now doing We'll worst while here upon we customers letter. operate, with Well, right show job, will based the it, measures relay during what to the everything us are in performance I've aggressively service unfortunate of that of STB doing upon But guess fast, and have The will how to to the publicly, been I is we a around. we'll anyone me. the how been the takes any work and I'm terms that circumstances be our deal hiring saying from territory. customer big boy, overall customers of respond, they issues. try a just we to posted.

's letter, them Jamie them tell can cellphone business is got give you who problem figure call I way. I I me customer just me. I don't say my out the a an from card, issue, call. same And I if my the meet, don't number. every customer Boychuk that's give the know you've give I If having why a they

they wish I just if call So, there is me challenge. a

response, Thanks candid for the Jim.

from next comes the Your of call Chappell. Jon line

line Your open. is

bit obviously Good been but higher like been has power, kind afternoon. We kept -- things theme front. of business per pricing that of accessorial a core there's are on reset season's whole and the carload earnings helping the intermodal, your revenue

So, contractual these have stickiness and the portfolio of as push the gone a on question in, think to ability quarter basis pricing pricing that of total about is, the higher some where maybe increases set we what's is too? this the

most Look, for gotten stick with a the couple am it's customers. I to we're discussion to our having going of a pricing part, and scripts the already, questions

we pressures face cover we transparent that cost the being around costs. that expect those We’re to

growth good the moved market. at side have a participating we our And obviously business when directly to customers We the that all other come things. other parts some of tied there. inflation some well those businesses, markets with our on Intermodal participate are those are participate when seen which moves with down, and our are also parts favorability about we volume you of share, those want our other well. as up. do aware coal, business benchmark talk We wallet customers, have We have and to prices. of, metrics,

the that tied next continue in to the quarter business to through and year. of we'll probably into season. see are favorability in our fourth so, end And that parts those Those flow of some will

some this probably there. previous for the momentum our next year year. And have obviously, than the expectations year, in then last inflation we'll or is higher So,

so, those And have price we'll leave I'll -- at probably that. it and price discussions accordingly.

Kevin. Thanks,

the of Your next from line question comes Jason Seidl.

open. is line Your

congratulations then sort their also, change that a supply coming future? this you and gentlemen, drill some inventories on-shoring on Is you wanted that the customer? Afternoon, I one-off due little Is Operator. might telling on down in run made a are seeing? having they you, to about you're to production a issues. Thank bit comment OR. trend you chain impressive to they that you And customers a of how

think there -- And are some now. some I There's of seen that multiple announcements Absolutely. large U.S. investments right you've can producers out incremental and from production. industries making

I Labor production seeing more availability moving about that is signs than get it inventory component how as legs and having the -- at so it's We're much. in that. some to doesn't overseas. to I from a and differential volatility hope think matter of freight to ever onshore in of looking the here. less this has early U.S. here they're costly is phenomenon these labor the how much facilities of been, It's

we hope the seen renaissance big different. And and materialized, of I see announcements opinion, about gas energy think never some forward. energy could further that my when we this I cheap and talked had with with had number years a announcements, You've fracking, we'll this time, ago, oil, coming some be here not in

think I into don't and to all run to align issues the customers to same production, the having others reconsider that where our currently. things have are want balanced they starting more they for they and that 're

total carried, change of inventories well? And terms seeing as are there a in you

are inventory there's think We're -- forward levels. I products. those customers positioning our more discussions having Transflo reevaluating around certainly

facilities things that, up their that or running. their need That's those like production they important. remain don't very make shipping very, next-day they forward things and positioning, So, can so sure

next see we'll of factors that to are, of customer investments couple these into years. all over playing think, So, the I make

for I Kevin, And gentlemen, appreciate time color. the as the thanks always.

line comes Nolan. from Ben the question Your of next

open. Your line is

is, Hey, ramp what system. some are you labor how about But the or get volume -- thanks, question get there. about from cargoes Jacksonville are things? coast are coal, I we've a wanted that curious opportunity of me side, further we -- for more a Savannah, but fit And thinking issues to your with in to other capable through. you volume impacting little guess talking the up bit and there. talked lot guys. the to of I we some actually steamships some I these intermodal about about more on I diverting customers east respect here. talked the the the of into maybe specifically, to on appreciate And away accommodating filling trying guess But of the also, through to seen instance, more places just

net [Indiscernible] of ports in outgrow Savannah going for into East You making investments. well-positioned, ports able years. That's is last the be ongoing. All see significant locations the have to ports Coast -- that. Tampa, areas to the continue whether are Coast number to Savannah, the where that to serve. operate we it's Jacksonville to we handle Charleston, making We're our all the West of those investments ability

volume. made that We some to ready we're So, take on investments.

intermodal the no is East to that. network, in There best question Our around the operationally. network be continues

You able just growth at that we'll that we've than anybody the handle service product leverage the look continue to into been look the at to market. better metrics, And else.

Sure.

volume I no is near-term question. to there -- being So, more of there's not to some get network through is inhabitant the the guess, then able

and of and all plastics, big, making without well-positioned not of all again, so facilities just on big own our either a working we said be Clearly old the move any through are facilities, more the have traffic ports, companies capacity. there's that lot exports, the yeah, about have on well, clearly, coast, along the are with the XX% transload railroad the the with talked it's able capacity, the with We partnering we earlier, investments. handle as -- as ports we're that them the steamship transload the are there's who to big business, building imports, these through capacity, people I we to we're rail coming, big, handle merchandise to boom facilities international business

All right. guys. Thanks a lot,

of next Our comes Kauffman. question line the from Jeff

open. is line Your

in, and Hey. Thanks me for squeezing congratulations.

questions to out here. my I'm get model some to with Just trying quality carriers used Kevin. for

expense of was inclusion XX much was million up quality? fuel non-locomotive Your year-on-year. about that How the to of attributable

little over Just XX a million.

was about Okay. sequentially. About the up to And would've of other attributable XX net, much how just quality? that one that been depreciation million

is that Sean it's that of impact Yeah, forward. to Jeff, again. carry We'll see quality. about related half

you. quarter. I That's Okay. all Congratulations. Terrific Thank have.

for at questions today's further no Thank this and concludes conference this are call. attending. you time, There

You disconnect. may now