Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss what initiatives are being emphasized to drive growth on the network, particularly any changes or new strategies being implemented?
A: (Vincenzo James Vena - CEO & Director) We are focusing on building fundamental blocks to provide unmatched service, including high-speed and consistent service models. We're actively engaging with customers to understand their needs and ensure our service aligns with their expectations. This involves leveraging our unique capabilities, such as our extensive network and cross-border operations with Mexico, to win new business and enhance customer satisfaction.
Q: How is the FXE performing with the extra volume, and are there plans to expand capacity over the Eagle Pass Gateway to accommodate future growth out of Mexico?
A: (Vincenzo James Vena - CEO & Director) FXE is performing well and aligning with our goals for efficient service. We are working closely with FXE to streamline operations and have provided additional locomotives to handle growth. We are also improving processes at the border to enhance speed and efficiency, reflecting our commitment to optimizing cross-border operations.
Q: With the OR improvement seen this quarter, how should we expect the OR to trend for the rest of the year?
A: (Jennifer L. Hamann - Executive VP & CFO) While specific guidance on OR isn't provided, the focus remains on continuous improvement. The aim is to enhance service and operational efficiency, which should naturally lead to better OR, despite the unpredictable economic environment and external factors like fuel prices and interest rates.
Q: Given the operational improvements and metrics shared, how much more capacity can the network handle, especially if volumes increase?
A: (Eric J. Gehringer - EVP of Operations) The network has the capacity to handle significantly more than the current volumes. We have sufficient terminal and mainline capacity, a buffer in crew bases, and additional locomotives ready to deploy. Our ongoing improvements in train length and operational efficiency ensure we are prepared for volume increases without needing substantial lead time.
Q: Can you discuss the sustainability of the cost reductions achieved this quarter, particularly in purchased services and rents?
A: (Jennifer L. Hamann - Executive VP & CFO) The improvements in cost management are sustainable with continued focus on driving car velocity and cycle time. Efforts to use resources more effectively, such as reducing locomotive fleet sizes and smarter contract management, are expected to maintain or improve cost efficiency.
Q: What are the expectations for price/mix changes through the year, especially considering macro factors and truck pricing?
A: (Kenyatta G. Rocker - EVP of Marketing & Sales) While specific numbers aren't provided, the focus is on exceeding inflationary costs through deliberate pricing strategies and customer engagement. The service improvements support our ability to negotiate better pricing, aligning with capital investments and enhanced service reliability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
