The Jacksonville, Fla.-based Class I railway said that in 2016, the industry continued to face headwinds from low global commodity prices and the strength of the U.S. dollar.
CSX Corporation reported net earnings of $1.7 billion on revenues of $11.1 billion for 2016, year-over-year declines of 13 percent and 6 percent, respectively, driven down by headwinds from low global commodity prices and the strength of the U.S. dollar, the company said.
Earnings per share for 2016 totaled $1.81, down from $2.00 for the prior year.
In addition, volumes fell 5 percent year-over-year, largely due to the weak coal business.
Between 2011 and 2016, coal has gone from accounting for 33 percent of CSX’s revenues to somewhere around 16 percent, CSX President Clarence Gooden said last week at the Midwest Association of Rail Shippers (MARS) 2017 winter meeting in Chicago. He explained how the industry in general has been impacted by lower coal volumes, due to the price of natural gas.
Although the outlook for coal is still grim, CSX Chairman and CEO Michael Ward did note in a press release how overall business conditions for CSX are gradually improving, which is reflected in the railway’s Q4 2016 results.
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CSX is putting a strong focus on expanding its intermodal footprint
For the fourth quarter of 2016, CSX saw net earnings slip 2 percent from the fourth quarter of 2015 to $458 million, but revenues surged 9 percent year-over-year to $3 billion. Volumes for the quarter also ticked up 5 percent year-over-year.
At the MARS meeting, Gooden shined light on various upgrades and investments CSX is currently implementing.
The railway is currently in the process of installing 27 sidings between Chicago and Florida, and has put in a series of those sidings already between Nashville, Tenn. and Cincinnati, Ohio, he said.
Gooden also said CSX plans to implement a shop agreement in the next month in Huntington, W.V. for the construction of locomotives.
In addition, he discussed CSX’s need to expand its intermodal footprint, which the railway has various plans underway to do so. This year, CSX will expand the size of its intermodal terminal in Winter Haven, Fla., and the railway is in the process of building the Carolina Connector, an intermodal terminal in Rocky Mount, N.C. The Rocky Mount terminal will feature “XGate,” which CSX has implemented at 16 terminals already.
In addition, CSX will be doubling the size of its Fairburn intermodal facility in Atlanta, opening Pittsburg in June and expanding Detroit and Cincinnati this year, Gooden said. CSX also recently opened an intermodal container transfer facility (ICTF) at the Port of Jacksonville.
CSX is also in the process of building and expanding on-dock capabilities at the Port of Savannah; working with Norfolk Southern, the Port of Charleston and the South Carolina Ports Authority to build on-dock rail in Charleston sometime late this year and an inland port in Dillon; will serve an inland port in Chatsworth, Ga.; and will have an announcement in the next few weeks regarding future growth in Chicago.