CSX enters 2023 with labor and volume in mind after a strong 2022

CSX enters 2023 with labor and volume in mind after a strong 2022

Writer: Joshua Andino 

2 min read January 2023 — CSX released its fourth quarter earnings report, posting strong earnings as the company will look to increase shipment growth in 2023. 

Jacksonville-based CSX Transportation, Florida’s own Class I railroad, posted strong results at the end of last year, releasing its Q4 2022 reportopens PDF file yesterday. In it, Joe Hinrichs, who became CEO in September of last year, stated, “The ONE CSX team made great progress this quarter, delivering strong earnings as our network performance continued to gain momentum.” He added, “Going into the new year, our entire company remains focused on providing exceptional customer service that will enable us to win share from trucks and drive profitable growth over the long term.”

The report detailed $1.02 billion in earnings, amounting to 49 cents per share, or a 17% increase from 2021’s 42 cents a share. Overall, the railroad saw a 9% increase in revenue year-over-year totaling $3.73 billion, driven by fuel surcharges, higher pricing, increased storage and other revenues. For the full year, CSX revenue totalled $14.9 billion, with the company ending the year having repurchased 151 million shares at an average cost of $31.25 per share, totalling $4.73 billion in stock buybacks in 2022. 

“We saw a tremendous improvement in our service metrics, in our operating metrics in Q4, and we’re continuing to see improvement so far in January of ’23,” Hinrichs told the Jacksonville  Business Journal on Wednesday

Labor remains a priority for the railroad, and while the acquisition of Pan Am Railroads in June added an additional 607 employees to the company, Hinrichs noted that retention was a key issue, and while the company was satisfied with having reached its goal of 7,000 active employees between trains and engines, having reached 7,064 in the last quarter, retention was still a key issue to address, particularly for new employees. Hinrichs told the Business Journal that the goal was to have between 7,200 to 7,300 employees on the rails. “We’re also continuing to hire and train, with a focus on a few key locations, but also on backfills for attrition with the anticipated attrition for the year, and making sure we already have a plan in place,” Hinrichs added.

Labor and the railroads has been a longstanding issue, having nearly paralyzed the country earlier last year as Class I railroads, including CSX, squared off against a number of unions that threatened to strike over attendance policies and quality of life conditions working on the rails. While a tentative agreement was reached at the eleventh hour and quickly touted by the Biden Administration as a critical win, rank-and-file workers argued at the time that the agreement failed to address core concerns, particularly the flexibility of schedules, which require many to be on-call with little notice for long periods of time. 

With CSX’s plans for recruitment in place, however, Hinrich’s detailed that the goal for the company would be to drive further volume growth, which the railroad has lagged in, with merchandise volume decreasing 2% since 2021 even as the value grew, while intermodal shipments decreased 5% in Q4 and remained flat throughout 2022. 

Nevertheless, Hinrichs was bullish on the future, stating in the report, “With the right resources now coming into place, we can turn our full attention to the opportunities ahead in 2023 and beyond.”

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