CSX labor shortages, operations, and carloads... (Tony Hatch - ABH Consulting)

20161212 Tonyhatch (Cropped)

CSX faced up to the labor challenge and the mystery of it all – hiring, and more confoundingly, attrition. CEO James Foote stated that they would get to their target (7K T&E) by the end of this quarter, but that’s flattered by the Pan Am deal closing June 1. He faced questions about why, since they were the first carrier to report crew shortages last year, and to talk hiring, weren’t we seeing progress yet in their service metrics? That remains a mystery.

  • CSX believes that it has “stabilized” and maybe even “turned the corner” in its operations; this means, for me, putting off for 90 days any real sense of the labor/service equation. Local service performance hit 83%, up 4 points YOY and 2 points Q/Q. Some short lines I know would question that stat….
  • CSX maintained decent margins – (55.4% OR).
  • Employees in training were 509 in Q2/22, way up YOY and from the beginning of the understanding of the shortage a year ago – but down 52 from Q1….
  • Intermodal gives some support for the inflection thesis – Trip Plan Performance inched up 1% to 90%; volumes were up 1%, and countering the overall trend as reported by IANA, international was up, domestic down.
  • Carload didn’t so much – TPP down 10 points to 59%. Merchandise volumes were flat (3/7 sub-groups were up, led by autos +10%).
  • Coal going out with a bang, but like everything, asking more questions than providing answers (export volumes down 7% due to port capacity issues, but still the big driver of yield; total coal volumes down 3%).