As the fourth quarter wrapped up along with the end of 2022, some of the Class I Railroads provided details, on how they will continue to improve rail service this year, during their 4Q earnings calls.
Here’s a brief recap on what Union Pacific, CSX, CN, and Norfolk Southern detailed in their 4Q earnings calls.
Union Pacific
Some highlights of their 4Q earnings call included:
- Finding ways to improve the quality of life for craft employees.
- Amidst their use of excessive congestion-related embargoes, UP defended their stance saying the purpose is to control product flow and protect serving yards for customers. However, UP has since paused those embargoes which has enable UP to digest the feedback they’ve received and to make some additional changes in how they approach their excess inventory.
- UP is also taking a look at having additional staff available even when there may be economic downturns. This would allow UP to make sure they are able to respond to growing demand as conditions improve.
- UP expects U.S. industrial production to ease this year, while also expecting carload volume on a full-year basis to grow.
CSX
Some highlights of their 4Q earnings call included:
- Improving service metrics, which are trending toward pre-pandemic levels, have allowed CSX to have more advantageous discussions with their customers regarding how they can meet their expectations.
- Reducing the human factor incidents and new hire safety performance will be crucial for success this year (2023).
- CSX expects to achieve overall volume growth in 2023.
- Export coal volumes are expected to grow, as they anticipate international intermodal markets to be “soft” through the first half of the year on slowing import activity and increased inventory levels.
- CSX will continue to hire for crews in key locations, but CSX does see the headcount for train and engine employees stabilizing this year.
CN
Some highlights of their 4Q earnings call included:
- CN is focused on adjusting their operational plan to emphasize improving velocity and focusing on finding customers in areas where there is available network capacity.
- Operating performance improved throughout most measures in the 4Q of 2022 when compared to the 4Q in 2021.
- CN plans to reinstitute individual car trip plans – which is when they track the when/where/and why a car falls off the trip, per Freightwaves – so they can address any issues behind why that happened.
- Officials at CN say they have more visibility the first half of this year, largely due to their grain carloads, and will have less visibility in the second half of the year.
- In addition to the demand for grain, CN expects demand for coal will continue. While international intermodal, lumber, chemical and petroleum productions and automobiles are expected to remain soft for the first half of 2023.
Norfolk Southern
Some highlights of their 4Q earnings call included:
- NS plans to further test their new operational plan as economic uncertainty lingers.
- NS CFO said in the call that how NS achieves volume growth in 2023 and “how the top line evolves” will partially depend on if there is an economic recession and how it impacts demand destruction.
- NS CMO stated in the call that they have their service back to a place where they can take on additional volume. And they are seeing the benefits of that improved service.
- Domestic intermodal performance improved during the 4Q – average container transit times have been reduced by 12 hours between Chicago and the Northeast.
Looking Ahead
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