CSX
#I guess the only directional comment that I would say is it looks like by the end of this year over a five-year period, we will have lost about $2 billion of coal revenue, and this year alone probably in excess of $0.5 billion.
So based on what we are seeing right now, we think next year's decline will be significantly less than that.
But beyond that, I really do think I want to stick with what I said earlier which is that we will have an update for you when we do the fourth-quarter earnings call both on a domestic side and on the export side.
Because I think we will be in a much better position as we are in the process of gathering our information from the utilities the 40 to 50 utilities that we serve and I think that is the best way to give you guidance is to take the input that we get from them so that it is a lot more accurate than trying to speculate at this point.
I think that is probably directional what I'm trying to say.
I think that clearly the fact that natural gas prices have come up is helpful.
It is still not at $3.50.
Inventory levels are still above what they should be and we only have about 1 million tons or so that probably will come out next year in terms of plant closures.
So that number is getting a lot smaller.
But nevertheless, I think as we look at the crystal ball right now, it is probably a safe place to be.
But as I said, a cold winter, natural gas prices move up above that $3.50 mark and that picture can change very rapidly.
We have historically given you the break down into two categories that we have merchandise and intermodal combined and all in.
I think we will stay at that level.
Pricing is a critical part for us in order to continue to reinvest in the business and especially in intermodal since we put so much of our commercial capital toward intermodal.
So being able to have the traffic at contributory levels, continue to push prices is a critical part of that strategy and we are getting positive pricing.
Exactly where it is I think we will keep those buckets that we have in place today.
Sure.
So this is <UNK> again.
We have seen the shift for an extended period of time that we see more of our international car coming in on the East Coast ports.
We have not seen a significant change in the amount of volume coming in since the Panama Canal got widened.
What we are seeing that there are some bigger vessels coming in but generally it is not necessarily adding capacity.
They are reconfiguring the strengths, there are fewer vessels and we are also seeing some realignment with vessels that before came through the Suez Canal that is now coming through the Panama Canal instead.
But so there is not significant change but the pattern has been there for a long time and we do expect that pattern to continue that we will see more and more of our volume come through the East Coast ports.
I think on the inflation side, we have been in a little bit of a muted environment here in the last couple of years.
When you start thinking about the inflation more broadly as well as GDP and IDP potentially going up, there could be a little bit of pressure on the upside.
There is a little bit of a nuance in the second half of the year for labor and fringe inflation that you are picking up on which is wage accruals that came up starting in the middle of the year.
So there is that in there rather than a sort of core external inflation run rate that is out there.
But I think what you are hearing from us is regardless of what inflation is, we are going to do our level best to more than offset that with productivity.
So I think having something in that 150, 175 range for inflation next year is probably a good starting place and we will offset that with productivity.
It really is a supply and demand picture so if you have ELDs and other regulatory constraints put pressure on the supply side, clearly additional growth in the economy is also helpful and if you remove one or two of those, it is going to prolong the period where we see this excess capacity.
So we are obviously following this very closely and hoping for an economy that picks up more than we currently expect, I think would be very helpful both in terms of our volume initiatives but also in terms of pricing.
Thank you.
We will see you all next month, next quarter.
