CSX Corp. reported a big increase in first-quarter revenue and earnings as the Jacksonville-based railroad company also made progress in its effort to beef up its train staff.
Jacksonville’s other big freight transportation company, Landstar System Inc., also reported a jump in earnings and revenue for the quarter.
CSX said April 20 that earnings rose 22% from the first quarter of 2021 to $859 million, or 39 cents per share. Revenue of $3.41 billion was 13% higher, excluding the impact of CSX’s acquisition last year of trucking company Quality Carriers.
“We are pleased with our results this quarter, though we are not yet satisfied with our service performance,” CEO Jim Foote said in a conference call with analysts.
“For over a year, we have communicated to you that the key to rebuilding our service to pre-pandemic levels is to hire more train and engine service employees. I am pleased to say that our efforts there are progressing well and our active T&E count has moved steadily higher this year,” he said.
Employee count rising
CSX’s average daily train and engine employee count had been steadily dropping since mid-2021 and fell to a low of 6,218 in January when a surge in coronavirus cases kept some workers out.
Employment has been rising since and the average count is 6,629 so far in April.
Total employment at CSX was 20,866 at the end of the first quarter.
Jamie Boychuk, executive vice president of operations, said CSX has more workers in training to fill jobs on the rail network.
“We averaged over 500 daily employees in training over the first quarter, which is over five times where we were a year ago. We expect to keep our training classes full to make sure that our pipeline remains healthy,” Boychuk said.
“We are turning the corner and are now adding to our active T&E count month-over-month,” he said.
CSX also took steps to keep employees by announcing April 19 it will provide monthly advance payments to some union employees as it continues negotiations on a new contract.
“The relationship between the railroads and the union workforce has not necessarily been one of mutual admiration and we need to fix that and we are working extremely hard,” Foote said.
“These guys were out there for two years in the middle of a pandemic working every single day, day and night, in a chaotic operating environment caused by surges in traffic and you name it,” he said.
“At the same time, they didn’t get a raise. That’s wrong in my opinion.”
Foote said the business outlook for CSX is strong.
“With support from higher coal prices and a supportive market environment, we feel comfortable projecting double-digit growth for both revenue and operating income for the full year. In the near-term, we expect to continue to benefit from elevated export coal prices and higher fuel surcharge revenue,” he said.
“We have made progress since the beginning of the year and we still have a lot of work to do,” he said.
“By adding the necessary resources and lifting our service levels, we will be well-positioned for years of profitable growth.”
Landstar surges
Trucking company Landstar said first-quarter revenue rose 53% to $1.971 billion and earnings rose 62% to $77.2 million, or $3.34 a share.
In a news release, Landstar CEO Jim Gattoni said the company’s financial performance over the last 12 months has been “unparalleled” and customer demand for freight transportation continues to be strong so far in the second quarter.
Landstar is projecting revenue of $2 billion to $2.05 billion and earnings of $3.22 to $3.32 per share in the second quarter, up from $1.571 billion in revenue and earnings of $2.40 in the second quarter of 2021.
However, there are some potential speed bumps, Gattoni said.
“The headwinds relating to inflation and a potential shift in consumer spending, as well as potential impacts relating to the war in Ukraine, make it difficult to predict the future direction of the U.S. freight transportation environment,” he said.