CSX Corporation (CSX) Presents at Bernstein's 39th Annual Strategic Decisions Conference 2023 (Transcript)

Summary of CSX Corporation's Conference Call Company Overview - Company: CSX Corporation (NASDAQ:CSX) - Event: Bernstein's 39th Annual Strategic Decisions Conference 2023 - Date: June 1, 2023 - Participants: Joe Hinrichs (CEO), Matt Korn (Investor Relations), David Vernon (Bernstein) Key Points State of the Business - CSX has successfully improved service levels, now exceeding pre-pandemic metrics from late 2019 and 2020, focusing on employee engagement and customer service [3][4] - The company aims to address industry challenges, including safety discussions in Congress and media scrutiny following incidents like the Norfolk Southern derailment [6] Priorities and Strategy - The CEO emphasized three main priorities: employee satisfaction, service levels, and customer satisfaction, which were aligned with the Board's expectations [7][10] - CSX is working to improve relationships with various stakeholders, including labor unions and customers, to enhance overall service and operational efficiency [10][11] Employee Engagement - The company has initiated efforts to improve employee morale, which has historically been low in the rail industry, by enhancing benefits and addressing work-life balance [13][18] - A recent employee survey indicated a 30% response rate from union employees, with significant feedback collected to address concerns [17] Service Recovery and Operational Efficiency - CSX has seen a reduction in attrition rates among new hires, attributed to improved workplace culture and morale [20][21] - The company is focused on maintaining high service levels, which are critical for customer retention and attracting new business [25][30] Volume and Revenue Outlook - CSX anticipates growing revenue per unit (RPU) this year, with merchandise volume up 3% to 4% year-to-date, driven by sectors like autos, coal, and grain [31][32] - Intermodal volumes remain depressed, but there are signs of sequential improvement, particularly in domestic intermodal [32][33] Market Position and Competition - CSX is gaining market share, particularly as competitors face operational challenges, and is actively engaging with customers to expand business opportunities [36][37] - The company is committed to improving service levels to foster long-term relationships with customers and explore new business avenues [41][44] Capital Investment and Growth Strategy - CSX plans to invest in capital projects to support growth, including enhancing terminal throughput and expanding its fleet [55][56] - The company does not foresee significant increased capital needs but will invest as necessary to support customer growth [56] Regulatory Environment - The CEO acknowledged the challenges posed by a more vocal regulatory environment, particularly concerning safety and access proposals following recent incidents [78] Conclusion - CSX is focused on enhancing service levels, improving employee satisfaction, and strategically growing its business while navigating regulatory challenges and market dynamics. The company aims to leverage its operational strengths to achieve sustainable growth and maintain competitive advantages in the rail industry.