CSX (CSX) Bank of America’s 33th Annual Industrials, Transportation and Airlines Key Leaders Conference summary

Strategic and operational outlook

• Leadership is focused on margin improvement, targeting 200–300 basis points annually, with a multi-year pipeline of cost initiatives extending into 2027.

• Revenue growth is driven by both volume and pricing, with a strong emphasis on capturing value for improved service and leveraging favorable energy and chemical markets.

• AI and data analytics are being deployed to enhance maintenance, crew management, vehicle monitoring, and pricing, aiming for sustained efficiency and cost control.

• Capital efficiency is a priority, with a multi-year strategy to optimize maintenance capital and reinvest in growth and technology.

• The organization is experiencing a cultural shift under new leadership, emphasizing talent development, alignment, and a results-driven, collaborative environment.

Market and network performance

• Carloads are up 4.5% quarter-to-date, with strong performance in the Southeast and Midwest, and optimism for continued growth as new projects ramp up through 2027.

• The network has capacity to grow across most corridors, with investments in yards and intermodal infrastructure, including the Howard Street Tunnel, supporting additional volume.

• Volume gains are attributed to improved service, truck-to-rail conversions, and competitive energy costs, with a focus on growing the overall market rather than shifting share from peers.

• The freight environment is described as cautiously optimistic, with most merchandise markets growing except for forest products, and stable international coal demand.

• Service metrics have improved, with velocity up 10% and dwell down 6% year-over-year, directly translating into cost savings and operational efficiencies.

Financial performance and guidance

• Revenue growth is trending in the mid-single digits, supported by fuel surcharges and strength in chemicals, aggregates, metals, and domestic coal.

• Core pricing is expected to be better year-over-year and above inflation, with a focus on recovering cost inflation through price.

• Over 100 cost efficiency projects are underway, with expected savings exceeding $100 million this year.

• CapEx is targeted at $2.3 billion, down 20% year-over-year, with a focus on efficiency and maintaining safety while increasing free cash flow conversion.

• Leverage is expected to decline from 3x toward a 2.5–2.75x target, and share buybacks will continue opportunistically, supported by improved cash flow.