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CSX Transportation’s rising first-quarter prices and falling cost structure — particularly the railroad’s asset use and lower locomotive spending — helped offset high fuel costs and the slowing U.S. economy, said CSX Corp. Chief Executive Officer John Snow June 6 at the Merrill Lynch Global Transportation Leaders Conference in New York, according to a prepared statement.
"We see weak demand across virtually all our lines of business," he said. "The only bright spot that we have, and it is a gloriously bright spot right now, is coal."
CSXT’s first-quarter coal volume rose 10 percent compared with first-quarter 2000 because many utilities are turning to coal as a preferred energy source compared with more expensive natural gas, said Snow, adding that coal now represents 30 percent of CSXT’s total revenues.
During 2001’s first three months, the railroad raised prices on selective lines, resulting in flat first-quarter revenues — despite declining rail-car volume — compared with a similar period last year.
Overall, the railroad industry’s economic picture is a "good one," said Snow, because rails are improving service, increasing cash flow and boosting future earnings by cutting costs, raising prices and creating more alliances.