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Service problems didn't affect CSX Corp.'s second-quarter surface transportation revenue, which rose 6.2 percent to a record $2 billion compared with second-quarter 2003. However, network congestion played a role in limiting quarterly operating income growth and increasing expenses. Operating income rose only 2 percent to $291 million, operating expenses increased 5.2 percent to $1.74 billion and the company's surface transportation operating ratio improved only 0.3 points to 86, the company reported today.

"This is the third quarter in a row that we've delivered record-setting surface transportation revenue, reflecting strong economic growth and high transportation demand," said CSX Chairman and Chief Executive Officer, and CSX Transportation President Michael Ward in a prepared statement. "[However], we are taking actions to improve our service and deliver more to the bottom line. We're adding operating resources to meet continued, expected demand, [and] our network redesign is under way to improve, efficiency and reduce car miles and terminal handlings. Together, these efforts will improve the productivity of our operations, while generating the service our customers deserve and the financial results each of us expect."

During the year's first six months, CSX increased operating revenue 1 percent to $4 billion and surface transportation revenue 5 percent to $3.9 billion compared with similar 2003 data.

Operating income fell 2 percent to $452 million while surface transportation operating income rose 1 percent to $431 million. Total operating expenses and surface transportation operating expenses increased 1.1 percent and 5.6 percent to $3.54 billion and $3.48 billion, respectively, and CSX's surface transportation operating ratio worsened 0.5 points to 89.

"The company's continued roll-out of our new operating plan will drive improvement in our service quality and an increase in capacity through increased asset utilization and improved network fluidity," said Ward.