CSX Network & Service Update October 2, 2015

Transcription

1 CSX Network & Service Update October 2,

2 Service Update Key Topics Safety Performance Network and Service Update Network performance progress Chicago terminal performance spotlight Crew and locomotive delay improvements Fall Peak and winter weather preparations Drivers of Fall Peak volumes Resource additions Chicago fluidity plans Winter weather planning Customer actions to help mitigate impacts 2

3 CSX remains focused on safety, with improvements from 2014 in personal injuries and train accidents Year-to-Date FRA Personal Injuries Reportable injuries per 200,000 hours worked Year-to-Date Life Changing Index Reported incidents per 200,000 hours worked Year-to-Date FRA Train Accidents Reportable accidents per million train miles # Incidents Rate 3 Note: Data shown on YTD basis through September 30, 2015

4 Network operations remain stable at improved levels On-Time Originations (OTO) % of trains leaving at or prior to scheduled departure time % On-Time Arrivals (OTA) % of trains that arrived at destinations within a specified window 90% 80% 70% 60% 50% 40% 30% 20% 76.0% 66.0% 55.6% 54.2% 52.2% 50.1% Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 90% 80% 70% 60% 50% 40% 30% 20% 54.1% 42.4% 43.2% 43.5% 41.5% 47.6% Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Train Velocity Average speed of trains traveling between terminals in MPH Car Dwell Hours Average number of hours that a railcar spends in a yard Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 ' Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 4

5 and service reliability continues to improve (2) (4) 2015 Avg Hours Originations are Late / (Early) Numbers in hours versus Plan Avg Hours Late / (Early) (0.1) OTO - (0.1) (0.2) Jan Feb Mar Apr May Jun Jul Aug Sep (1.6) 2015 On-time Origination Span Numbers in hours versus Plan Early Trains Late Trains OTO (1.7) (1.6) (1.9) (1.7) (1.5) (1.6) (1.8) (1.7) Jan Feb Mar Apr May Jun Jul Aug Sep 100% 80% 60% 40% 20% 0% 100% 80% 60% 40% 20% 0% In Q3, scheduled train originations were on average 0.1 hours early, a significant improvement from earlier in the year CSX's service reliability has improved substantially since early 2015 CSX measures this reliability through the "span" of on-time originations (OTO) on the scheduled train network versus the plan CSX reduced OTO span by 60% reduction from February to September by reducing late trains on the network In September, the OTO span was 5.2 hours, ranging from 1.7 hours early to 3.5 hours late 5 Note: Data is subject to settling over time

6 driving improvements in terminal arrivals and supporting CSX s continuing commitment to local service Avg Hours Arrivals are Late / (Early) Numbers in hours versus Plan Avg Hours Late OTA Jan Feb Mar Apr May Jun Jul Aug Sep 100% 80% 60% 40% 20% 0% Improvement in on-time originations have driven improvements in terminal to terminal arrival performance (OTA) In Q3, scheduled train terminal arrivals were on average 2.8 hours late, down from an average of 8.1 hours late in Q1 90% 85% 80% 2015 Local Originations % of local trains leaving at or prior to scheduled departure time 85.3% 83.6% 82.1% % On-Time Goal 85.6% 84.9% 85.5% 85.5% 85.0% 86.4% CSX reduced OTA span by 50% reduction from February to September by reducing late trains on the network CSX s local service performance continues to improve and reinforce the company s commitment to the customer 75% Jan Feb Mar Apr May Jun Jul Aug Sep 6 Note: Data is subject to settling over time

7 The industry s Chicago terminal continues to improve Chicago Trains Held for Receiving Roads Average weekly number of trains Total trains held for receiving roads in Chicago improved drastically since winter 45 Weekly trains held in Chicago reached as low as zero in the week ending September This level of performance reflects the industry's continued commitment to the fluidity of this major interchange gateway Jan Feb Mar Apr May Jun Jul Aug Sep 7 Note: the graph data displays the Trains Held based on AM snapshot, Trains Held six or more hours within one crew district of Chicago.

8 Crew and locomotive related delays remain significantly improved from ,000 3,000 2,000 1,000 Train Crew Delay Hours by Week YTD Weekly train crew delay in September decreased 62% versus the same period in 2014 Targeted hiring in high-impact locations has significantly benefited the network and decreased crew-related train delay - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg Daily Trains Holding for Power YTD Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Trains holding for power in September continues to be at multi-year lows New, rebuilt, and repaired locomotives have helped drive down train delay due to power by 74% since September

9 Overall, the network is significantly more fluid and terminals are less congested compared to 2014 As of September 25, 2015 Only isolated areas of the network are experiencing decreases in velocity versus 2014 Only one terminal experiencing more congestion Improvements reflect the results of: Resource additions Management focus Network operating plan changes Other process improvements 9

10 10 Fall Peak and winter weather preparations

11 CSX s commitment to service excellence will remain unwavering throughout Fall Peak and the winter Fall Peak is driven by seasonally heavier traffic levels across multiple lines of business, including: Grain Harvest season, which is expected to be the near record levels, drives growth across multiple commodities Intermodal Movement of pre-holiday inventory, followed by heavy increases in holiday parcel traffic, bolsters Intermodal Automotive Auto-related shipments tend to increase as manufacturers change over their model year Bulk Shipments of bulk commodities, such as coal, salt, and sand, typically rise in the fall as customers replenish stockpiles in advance of seasonally increased demand CSX remains committed to balancing resources across geographies and commodities 11

12 Added resources will support service levels through Fall Peak and winter Locomotives Completed In the Pipeline Future Plans CSX has received 115 new units year-to-date and has rebuilt or completed heavy-repairs on over 100 more units to drive reliability An additional 85 new locomotives are expected by year-end CSX is continuing to return mechanically stored units to active service through rebuild and heavy-repair programs CSX will take delivery of 100 more new high-horsepower Tier 4 emission complaint locomotives in the first half of 2016 Newer, more reliable locomotives drive systemwide on time originations and arrivals higher, aid in network fluidity, and support recoverability Train Crews Completed In the Pipeline Future Plans CSX has reduced crew-related train delay by over 60% since 2014 CSX will add resources as needed to support Fall Peak volumes and network performance through the winter CSX will continue to match resources with current and anticipated future volumes combined with expected attrition (e.g. retirements) in its train service crew base Incremental crews in key geographies will increase on time originations and arrivals and reduce dwell across the Northern Tier 12

13 Maintaining fluidity at Chicago remains a top priority Chicago Smithboro East St. Louis Elsdon CSX will continue to utilize the Elsdon Subdivision, acquired from the CN in 2013, and leverage alternative gateway contingency plans to ease congestion Recently constructed Smithboro interchange Existing East St. Louis interchange CSX has improved alignment with other railroads through the CTCO* Multi-railroad team that coordinates actions designed to keep Chicago fluid Weekly alert levels trigger specific action requirements for each railroad Increased alignment aids in terminal fluidity A new daily scorecard has been developed to provide a clearer picture of interchange health Escalation process has been designed to relieve congestion through railroad-specific action plans 13 *Chicago Transportation Coordination Office

14 Process adjustments will help mitigate winter impacts Detailed winter action plans are being updated for all CSX operating departments Advanced winter planning has long been an important part of CSX s Service Excellence process The harshness of the past two winters has informed a more exhaustive approach to preparing for this upcoming winter Weather Indicators Demand Indicators Operating Indicators Triggers Response Actions 14

15 All of CSX s operating departments play a critical role in winter preparedness activities Engineering Department Adding switch heaters to new locations and upgrading and replacing existing switch heaters to improve operational fluidity and reduce train delay along key routes Performing preventative maintenance on vehicles and work equipment Reviewing resource levels in key locations along the Northern Tier to improve response times Mechanical Department Strategically stage vehicles across the network for quicker repairs along the line of road Increasing the supply of winter-specific parts on hand to reduce car and locomotive shop dwell Proactively assessing the condition of locomotive components with high winter failure rates and better utilizing onboard systems designed to prevent failures caused by extreme temperatures Transportation Department Referencing divisional playbooks to guide actions prior to and during winter conditions Adhering to updated terminal checklists for winter weather preparation Conducting multiple network calls daily to assess conditions and trigger contingency plans Readying rapid response teams to be deployed to field locations when conditions warrant 15

16 Customers can help ensure success Help avoid unnecessary delays by winterizing facilities: Remove snow and ice accumulation from rails, sidings, switches, and lead tracks Deploy salt to melt ice and ensure proper drainage to prevent refreezing Ensure walkways are free of safety hazards such as ice and snow Help CSX maintain fluidity and serve you better: Safely load and unload cars as quickly as possible Have cars fully prepared to hook and haul Ensure billing is completed properly in ShipCSX Please communicate service issues through the appropriate channels at CSX so we can better assist you CSX is committed to growing with customers. CSX is investing to deliver long-term Service Excellence. 16

17 Forward-Looking Statements This information and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, margins, volumes, rates, cost-savings, expenses, taxes, liquidity, capital expenditures, dividends, share repurchases or other financial items, statements of management s plans, strategies and objectives for future operations, and management s expectations as to future performance and operations and the time by which objectives will be achieved, statements concerning proposed new services, and statements regarding future economic, industry or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as will, should, believe, expect, anticipate, project, estimate, preliminary and similar expressions. Forwardlooking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. If the company updates any forward-looking statement, no inference should be drawn that the company will make additional updates with respect to that statement or any other forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by any forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by any forward-looking statements include, among others; (i) the company s success in implementing its financial and operational initiatives; (ii) changes in domestic or international economic, political or business conditions, including those affecting the transportation industry (such as the impact of industry competition, conditions, performance and consolidation); (iii) legislative or regulatory changes; (iv) the inherent business risks associated with safety and security; (v) the outcome of claims and litigation involving or affecting the company; (vi) natural events such as severe weather conditions or pandemic health crises; and (vii) the inherent uncertainty associated with projecting economic and business conditions. Other important assumptions and factors that could cause actual results to differ materially from those in the forwardlooking statements are specified in the company s SEC reports, accessible on the SEC s website at and the company s website at 17