JACKSONVILLE, Fla. - CSX Corp. CEO and President Michael Ward said his companys increased handling of nearly all types of goods from the second quarter to the third shows that the economy is recovering, according to the Jacksonville Business Journal.
But just like the economy, Ward doesnt expect volumes to return to the level experienced in 2007 for several months. The volumes of coal have remained flat, but volumes of other commodities are down from a year ago. Metal volumes in the third quarter were down 40 percent from a year earlier, an improvement from the 53 percent year-over-year drop in the second quarter.
Motor vehicle volumes fell 28 percent in the third quarter, an improvement over the 41 percent year-over-year drop in the second quarter.
Ward credits part of the volume improvement to the federal cash-for-clunkers program and dealers need to restock their inventories.
We expect a [volume] percentage decrease to fall in the single-digit next quarter, said Ward.
The companys freight volumes were down 15 percent in the third quarter, compared to the same period a year ago. Volumes were down about 21 percent in the second quarter this year, compared to second quarter 2008.
The lower volumes coupled with lower fuel charge recovery were the main reason for the 23 percent decline in revenue.
Ward said the cost of fuel in the third quarter was about half of it was in the quarter previous. CSXs profit declined by 23 percent to $293 million in the third quarter.
He said the company has been able to keep operating costs down by tailoring its capacity to market demands. The company furloughed about 2,100 workers and parked about 500 of its 3,800 locomotives and 31,000 of its 98,000 rail cars.
About 400 furloughed workers were called back recently because of an increase in volumes, retiring employees and vacation-caused employment gaps needing to be filled. Ward said the company has also been able to save about $258 million in operating costs by keeping overtime at a minimum and not filling non-essential positions.
(This item appeared Oct. 15, 2009, in the Jacksonville Business Journal.)
CSX Corp. has hundreds of furloughed train and engine-service workers and thousands of locomotives and rail cars at the ready to rejoin operations when traffic demand rebounds.
As of Oct. 3, the Class I had furloughed 1,643 T&E employees (or 13 percent of the total workforce), and stored 640 locomotives (17 percent of the total fleet) and 26,100 cars (32 percent of the total fleet).
But a message Executive Vice President and Chief Operating Officer Tony Ingram stressed during the Class Is third-quarter earnings teleconference and Webcast on Oct. 14 is that CSX wont necessarily bring back the workers and rolling stock on a one-for-one basis. The railroad has been handling more volume with fewer road crew starts of late as it works to drive productivity, manage resources and control costs, he said. Meaning: All the reserve manpower and motive power might not be needed.
In the third quarter, CSX reduced crew starts by 19 percent while traffic declined 15 percent year over year. The Class I was able to reduce crew starts 20 percent in the second quarter, but volume was down 21 percent at the time, and 15 percent in the first quarter, when volume was down 17 percent, said Ingram.
CSX also made performance strides in the quarter, according to four service metrics. Train velocity reached 21.8 mph compared with 20.1 mph in third-quarter 08; average terminal dwell fell slightly to 24 hours vs. 24.1 hours in 2008s third quarter; and on-time originations improved to 82 percent and on-time arrivals rose to 79 percent compared with 77 percent and 67 percent, respectively, in the year-ago period.
By proving it can handle more volume with less resources even as traffic levels inch up, CSX will be much farther along the doing more with less curve when freight demand kicks into a post-recession and hopefully much higher gear.
Hey...they omitted the miles to the gallon to move a ton of freight. 400..500..700? Nobody in USA society cares and are of an intellectual class to challenge the figures.
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