Post by dockworker on Apr 14, 2009 19:53:05 GMT -5
The Journal of Commerce
CSX Profit Falls 30 Percent
John D. Boyd
Apr 14, 2009
Carrier sees 1Q revenue, traffic volume decline 17 percent
Rail giant CSX said its profit fell 30 percent to $246 million in the first three months of 2009, as revenue fell 17 percent to $2.25 billion.
Michael Ward, chairman, president and CEO of the eastern-U.S. carrier, said "we are taking tough actions to right-size our operations in this challenging environment."
CSX said its volume also fell 17 percent, “driven by significant weakness in industrial production, housing starts, and consumer spending, as well as in the agriculture and energy sectors.”
Like many other carriers, CSX has been laying up railcars and locomotives, and laying off train crews and equipment maintenance workers. For instance, it cut labor and fringe benefit costs by $83 million or 11 percent in the period, to $662 million.
Yet its single greatest cost savings was from fuel, as it plunged in price from a year earlier and as CSX needed much less to run trains. That cost fell by $250 million to just $191 million, a 57 percent drop.
Only a few cargoes gained volume from the 2008 period – corn, ethanol and coal for utility customers. Most, though, fell hard, including a 53 percent plunge in automobile traffic and 48 percent drop in metals.
Intermodal volume fell 13 percent, but because that is high-valued traffic it worked out to a 22 decline in revenue.
Contact John D. Boyd at jboyd@joc.com.
CSX Profit Falls 30 Percent
John D. Boyd
Apr 14, 2009
Carrier sees 1Q revenue, traffic volume decline 17 percent
Rail giant CSX said its profit fell 30 percent to $246 million in the first three months of 2009, as revenue fell 17 percent to $2.25 billion.
Michael Ward, chairman, president and CEO of the eastern-U.S. carrier, said "we are taking tough actions to right-size our operations in this challenging environment."
CSX said its volume also fell 17 percent, “driven by significant weakness in industrial production, housing starts, and consumer spending, as well as in the agriculture and energy sectors.”
Like many other carriers, CSX has been laying up railcars and locomotives, and laying off train crews and equipment maintenance workers. For instance, it cut labor and fringe benefit costs by $83 million or 11 percent in the period, to $662 million.
Yet its single greatest cost savings was from fuel, as it plunged in price from a year earlier and as CSX needed much less to run trains. That cost fell by $250 million to just $191 million, a 57 percent drop.
Only a few cargoes gained volume from the 2008 period – corn, ethanol and coal for utility customers. Most, though, fell hard, including a 53 percent plunge in automobile traffic and 48 percent drop in metals.
Intermodal volume fell 13 percent, but because that is high-valued traffic it worked out to a 22 decline in revenue.
Contact John D. Boyd at jboyd@joc.com.