Brian Ossenbeck

Mike acknowledged service metrics below target, blamed stronger-than-expected demand and crew tightness, and called it non-structural with sequential improvement expected.

Mike acknowledged elevated dwell as trade-off from engineering productivity initiatives but emphasized focus on bringing metrics back in line.

Kevin quantified $150M of non-recurring 2025 items rolling off. Inflation expected at 3-3.5% range with labor side consistent to slightly higher than prior year and non-labor lower. Productivity step-up is the key incremental driver.

Steve drew parallels to his decade running Praxair before the Linde merger, emphasizing patience and running the franchise well as positioning for future opportunities. Did not directly address merger mandate.

Joe declined to speculate on merger specifics, instead reiterating the thesis that improved customer service and ease of doing business are paramount. Said CSX is open to all possibilities.

Kevin said some revenue was perishable but big Q2 opportunity exists. Sean declined to update specific 2025 EBIT guidance citing uncertainty but reiterated 3-year targets remain intact.

Mike said traffic already rerouted in Q4 so no further service deterioration expected. Added headcount is stable and productivity improvements within reach once weather events subside.

Carere said US utilization stays high with total volume up despite ground economy declines, and cited mid-90s renewal rates supporting share retention.

Marshall Witt clarified GAAP costs include IT and talent separation investments. Non-GAAP $700M includes technology platforms and professional fees. Dietrich noted the incremental $100M is acceleration of investment, not incremental to total project. John Smith confirmed Freight fuel surcharge updates weekly and is typically a net positive above cost of fuel.

Dietrich confirmed separation costs are in reported earnings, not the $600M non-GAAP spin costs. MD-11s expected back in Q4, with substantial majority of remaining $175M cost in Q3 given peak season outsourced lift expense.

Carere said peak volume growth is significantly driven by prior customer acquisition (lapping benefit), not market growth. ADV growth modest but total volume up from extra day. Freight yields expected to improve in back half with disciplined execution.

Carere confirmed pricing environment improvement, highlighted large package strategy, rural coverage monetization, and 2% fuel surcharge change. Best YoY yield improvement for home delivery and ground commercial in Q4.

Carere highlighted seven consecutive quarters of European share gains with improving service and productivity. On pricing, noted discipline on surcharges, large packages, and rural markets; expects some base yield pressure lapping in FY26.

Brie acknowledged base rate pressure from the economy but highlighted discipline on surcharges, peak, large package, dimensional pricing, and rural surcharges all contributing.

Darren acknowledged driver-supply pressure but framed insourced drayage as an advantage that speeds customer intermodal conversion.

Darren said surprise is that despite depressed industry margins, transcon pricing remains competitive. Every headhaul segment positive but not covering inflation. Backhaul repriced negative. Nick said enforcement continuing state by state; May Roadcheck will be a big test focusing on ELDs and load securement. Brad Hicks added truck driving school shutdowns and ELD provider removals will further constrain new industry entrants.

Shelley said small demand upticks could create a meaningfully different environment given limited supply elasticity. Spencer added demand is solid across all services in first two weeks of January, and customer retention was highest since 2017. Customers consolidating logistics providers to fewer high-performing partners.

Nick Hobbs clarified ICS bid awards were low-to-mid single digit rate increases on recent wins, not a next-year forecast. Brad Delco described internal cost target as far greater than $100M but shared the conservative figure to maintain say-do credibility.

John Kulow said most savings are structural, not volume-dependent. Darren described creative equipment uses: replacing leased DCS trailers, cross-division sharing, and working with BNSF on storage costs.

Darren Field acknowledged margin dissatisfaction. Highway capacity and excess equipment are the main headwinds. Spencer added that road-to-rail conversion remains the top customer topic.

Brad Hicks confirmed fleet losses largely behind by Q2. Brad Delco explained new fleet startups are breakeven through first 6 months, so 2025 growth benefits 2026 earnings.

Ed Elkins explained the lag from spot to contract pricing and expressed optimism about upward pressure flowing through.

Ed walked through optimism across segments: utility coal restocking, export coal from Iran disruption, domestic intermodal benefiting from higher truck fuel, and industrial development pipeline moving.

Jason quantified fuel at $31M above prior year from price, with March alone $40M above expectations. Storm costs were $10-15M in the quarter. Fuel headwinds continuing into April.

CFO confirmed retention costs are in merger-related expenses excluded from adjusted results, not in the $8.2-$8.4B guide. COO argued strong service performance moots reciprocal switching arguments, noting US market differs from Canadian precedent with more competitive options.

COO described fuel management as integral to train service plan optimization, with product-level approach to fuel consumption. CEO added AC locomotive fleet approaching 80% (from high teens 6 years ago) as structural driver. Running 23% less horsepower per ton versus 2019. COO sees no end in sight to fuel efficiency gains.

COO detailed rapid storm recovery through strategic locomotive and car deployment, with 40 locomotives returned to storage post-surge. Zero-Based plan accelerating 600+ customer last-mile improvements.

CMO emphasized wallet share expansion with existing and adjacent supply chain customers. CEO confirmed both pricing leverage and volume share recapture from service improvement.

Hamann attributed the higher comp per employee to wage inflation and hotter-than-expected health and welfare costs.

Jim confirmed Q2 2027 expected approval timeline. Eric outlined phased integration approach with day-1 independent operations, leveraging successful NetControl technology transition experience.

Jim revealed UP carries extra employees with guarantee payments rather than furloughs, providing buffer capacity. On the red line, Jim expressed frustration but accepted it as process, noting he doesn't see its relevance to merger merits but will comply.

Kenny acknowledged market degradation but emphasized pricing discipline reflecting service and infrastructure investments. Jim dismissed chemical association opposition, noting they haven't seen the merger application yet. On the 15-20% speed claim, Jim explained it comes from removing yard touch points averaging 19.9 hours each.

Jim deflected regulatory specifics, arguing that superior service is the path to winning customers regardless of regulatory structure.

Kenny noted customers need more certainty before making port or traffic flow changes, while highlighting grain export flexibility to Gulf and Mexico routes.

Eric explained the Brakeperson deal enables more efficient crew handling as technology reduces need, with 20 of 28 engineer hubs already cut over to new schedules.

Dykes explained the fuel asymmetry and added Middle East block hours and lease aircraft costs; kept the 3Q bridge at normal seasonality.

Brian explained B2B decline was driven by Amazon AFN exits to commercial addresses and Chinese e-commerce returns. Will cycle through in Q2. Underlying B2B business showing strength through capability wins.

Carol said Q1 tendered 977,000 ADV to USPS (44% of ground saver), ramping to ~$1.5M in Q2. USPS fuel surcharge seen as positive for industry pricing as it sets a floor for economy products.

Carol confirmed Ground Saver density remains a challenge at ~$100M cost drag in Q3, driving excitement about USPS renewed relationship. Brian guided Q4 RPP slightly above 6%, above full-year 6% target. Less mix improvement expected in Q4 as Chinese e-commerce shipper exits begin to lap.

Kate confirmed Europe-to-U.S. exports growing high single digits and Asia nearshoring markets near double digits. Brian noted 2.26x debt-to-EBITDA, $5B cash, restructuring charges ~60% cash.

Nando explained peak season variable costs (rental equipment, temporary facilities, leased aircraft) will decrease significantly with lower Amazon volume.