CSX officials said late Wednesday in a third-quarter 2021 earnings conference that they have been working hard over the previous nine months to grow staff numbers so that the Eastern U.S. railroad can fulfill current and future capacity needs.
“It’s evident that we’re in a bind. This quarter was busier than the previous. This year, there has been more business than we have been able to handle. CSX President and CEO Jim Foote told transportation analysts on Wednesday that the fundamental reason for this is “our inability, like everyone else in the world right now, to ramp up our personnel coming out of the high losses of the early phases of the [COVID-19] epidemic.”
“We’re now seeing the results of all of our hard work for the previous nine months or more and are beginning to bring on more individuals and deploy those folks into the field so we can operate a little bit better,” Foote stated.
CSX (NASDAQ: CSX) “redesigned our recruiting process to eliminate extraneous procedures and considerably decrease the time from application to offer” to attract potential candidates and improve the hiring process, according to Jamie Boychuk, CSX executive vice president for operations. According to him, this has necessitated the implementation of new recruiting techniques and referral schemes.
As a result of these efforts, CSX’s conductor classes have risen in size and frequency, as have the amount of people working for intermodal operations and supplemental assistance to keep terminals running smoothly.
According to Boychuk, CSX has taken steps to boost the availability of its train and engine workers by implementing attendance-based programs.
“We have a solid employment pipeline,” Foote added, “and we will hire until the network is filled to match demand.”
According to Kevin Boone, CSX executive vice president of sales and marketing, a scarcity of equipment affected CSX and almost all railroad services markets, resulting in a volatile situation.
CSX has “increased expenditures to generate new capacity” to solve supply chain difficulties, including establishing 13 overflow container yards and Transflo sites, as well as speeding up container repositioning.
According to Boone, CSX has been “aggressively expanding our customer solutions staff to augment further the enormous investments we are making in client-facing technologies.” “With supply chain interruptions unlikely to improve in the foreseeable future, our team is working hard to provide new solutions and options for shippers.”
The efforts to increase network capacity come after Surface Transportation Board Chairman Marty Oberman wrote to Foote on Monday, asking him to explain how CSX intends to satisfy customers’ needs. Some of them have complained to the STB about poor rail service.
“CSX clients have reported missed switches, longer transit times for both manifest and bulk shipments, unfilled vehicle orders, and the inability to contact customer support and operations personnel as examples of poor performance….” Customers face higher freight expenses, idled production, lost revenues, and ruined commercial relationships as a result of these issues, with little recourse from CSX,” Oberman stated.
Oberman also requested that CSX compare its performance indicators from 2021 to 2019 and explain what obstacles prevent it from achieving previous levels of fluidity and service.
In answer to a question concerning STB’s letter, Foote agreed that CSX has had difficulty hiring new personnel and rehiring those furloughed, which he attributed to the company being in the “epicenter” of the COVID-19 outbreak. CSX is based in Jacksonville, Florida, and operates in hard-hit states like Florida, Georgia, and Alabama.
CSX’s ability to meet capacity needs was hampered by the difficulty in attracting people, according to Foote.
“I’m not sure why they don’t just call me if you can figure out who the customer who’s having a problem from the letter.” ‘If you have a difficulty, give me a call,’ I tell every customer I meet — I give them my business card, I give them my cellphone number — So, if there’s a problem, I hope they’d call me,” Foote added.
“We look forward to delivering a thorough response to Chairman Oberman’s letter,” CSX stated in a statement on the STB letter. CSX is dedicated to providing our customers with dependable and efficient service. We take any complaints seriously and do everything possible to rectify them as soon as they are brought to our notice. We currently have no official complaints pending before the STB. We have not seen an increase in informal service complaints, making it difficult to detect the anecdotal difficulties stated in the Chairman’s letter.
“We are pleased with what our industry has accomplished in the face of considerable hurdles since the outbreak of the epidemic.” No one in the industry is doing anything more to address these issues. We have already hired more conductors in 2021 than in 2019 and 2020 combined, thanks to incentive schemes and additional training capacity. In addition, we have the highest velocity in the East and the shortest dwell in the United States. We recognize that more work is required to return our performance levels to the record levels achieved in 2019. Still, we are optimistic that we can do so by capitalizing on our industry-leading position.”
Financial Results for the third quarter of 2021
CSX’s net profit for the third quarter of 2021 increased by 32% year over year to $968 million, or 43 cents per diluted share. Net income was $736 million, or 32 cents per share, in the third quarter of 2020.
CSX’s acquisition of Quality Carriers resulted from approximately $1.4 billion in operating profits, resulting in an operating ratio of 56.4 percent in the third quarter of 2021, compared to 56.9% the previous year.
Revenue increased by 24% to $3.3 billion in the third quarter, while operating expenses decreased by 23% to approximately $1.9 billion.
The business refused to disclose OR forecasts for the coming year.
“I want to congratulate all of CSX’s railroaders for their unwavering commitment to our customers this quarter, despite the ongoing supply chain interruptions and challenges posed by the COVID-19 delta variation,” Foote said in a statement. “We are committed to assisting our customers in overcoming current supply chain restrictions, and we will continue to take steps to maintain our network fluid and develop new solutions that allow millions of more Americans to get important goods.”
