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CSX CEO Foote: Next year affords an opportunity to leverage improved service to drive above-market growth
In November, Progressive Railroading asked each Class I chief executive officer to address questions pertaining to their 2020 outlook. CSX President and CEO James Foote in early December provided the following responses in an email.
What's your take on the potential for volume growth in 2020 after a difficult year for rail traffic in 2019? Are there certain commodities/business groups you feel pretty good about heading into next year? Which ones are you concerned about, and why? What, predominantly, do you believe will drive business growth in 2020?
Foote: I believe there is significant opportunity for us to leverage our improved service to drive above-market growth. CSX has never run as safe, fast, efficiently and reliably as it does today. I am focused on consistently providing this new level of service in order to continue earning the trust of our existing and prospective customers to win more of their business. I am particularly focused on our merchandise segment where the railroad can offer a structurally more cost-effective product and where CSX can deliver levels of reliability that are close to, if not equal to, a truck.
I continue to roll out our "Trip Plan Compliance" data to our customers to provide an unprecedented level of transparency on our service performance. I believe that offering this information represents a significant step towards proving that our service is more than just a commodity to increase our size of our addressable market.
What's your biggest concern in terms of any potential obstacles to business growth in 2020? How can they best be addressed/overcome? What other pressing issues are on your mind heading into next year, and how could they best be dealt with?
Foote: While the consumer economy remains strong, the biggest issue in terms of business growth in 2020 is lingering softness in the industrial economy, driven by trade and other geopolitical uncertainties. The best way for us to address this lower level of industrial activity is to earn more share of our existing customers’ transportation business, especially in an environment in which those customers are looking for ways to save costs. With the inherent cost-advantages of rail, and the service CSX is currently delivering, this is a prime opportunity to convert trucks off the highway.
What are your concerns and/or hopes regarding the presidential election in late 2020? What else is on your mind about doings in D.C. and how they might impact your railroad next year? What do you consider to be your legislative or government oversight priorities for 2020?
Foote: CSX is hopeful for greater political certainty in 2020. With regards to the STB, after a number of years of not being fully staffed, they are focusing on issues that have been talked about a long time.
For instance, they are looking into ways to simplify some of the procedural steps that shippers have to go through if they have complaints. As an industry, we’ll have thoughts on what they want to talk about and we’ll work through all of that in due course, and similarly on — trying to begin to have some discussions at least about what revenue adequacy might be. That’s a long-term process and we will be an active participant to ensure that our point of view is heard.
An eBook will be available soon on ProgressiveRailroading.com that will share how the other Class I CEOs are sizing up 2020 and what they believe next year might hold in store.
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