Why CSX says it is now happy with its workforce levels (Courtesy of the Jacksonville Business Journal) — After years of struggling to get the size of its workforce to a higher level, CSX Corp. has succeeded in building the employee base to where it needs to be, the company’s CEO told the Business Journal.
“We feel really good about where we are,” CSX CEO Joe Hinrichs said in a conversation shortly after the Jacksonville-based railroad released its 2023 earnings. “If we create an environment where people feel more appreciated and valued and are coming into work to serve the customer and not be distracted by other things and to do it safely and efficiently and they feel part of a team, we can make it a more attractive place for people.”
Building up the workforce has helped drive improvement in other metrics, including raising train speed, cutting the amount of time trains spend in yards and safety.
That in turn has helped drive customer acquisition.
“That’s why we’re going to keep talking about customer service as well and safety and efficiency because they all go together,” Hinrichs said. “The best way to serve our customer is also the best way to be efficient and have the network flow well, and to have cars only spent a little bit of time in the yard and to keep moving. So they’re not in conflict with each other.”
One aspect that has helped with workforce growth is the providing of sick leave to its unionized employees — a long sought-after goal of the workers, which CSX granted unilaterally toward the beginning of 2023.
That move did have an impact on the company’s annual bottom line, with the company paying out for unused days. That helped spur a $42 million increase in labor and fringe expenses, which the company attributed to “higher headcount and union employee vacation and sick benefits.
“We didn’t have a good way to predict that, because it was our first year,” Hinrichs said. “We didn’t know exactly how the usage pattern would play out.”
Looking ahead, CSX is expecting low to mid-single digit total volume and revenue growth this year, with solid momentum across its merchandise, intermodal and export coal lines of business.
It is also looking forward to investing $2.5 billion of capital expenditures, Hinrichs said, including opening a new interchange point with the Canadian Pacific Kansas City railroad company in Myrtlewood, Alabama.
“There hasn’t been a new interchange point with a western railroad in decades, so that is, like, euphoric,” Hinrichs said.
CSX will also work more on rolling out more hydrogen-powered locomotives, Hinrichs said, using a fuel that has high energy density and no emissions. “We went from steam with coal to diesel over nearly 200 years,” he said, “and now we’re talking about something. It’s pretty exciting.”
Taken together, Hinrichs expressed excitement for the potential he sees for CSX in 2024.
“If the economy helps us out a little bit,” he said, “we have a lot of potential this year to grow with our customers and to continue to serve the market better and more efficiently.”