It Starts With the Customer at CSX

It starts with the customer at CSX. The growing demand for rail transportation services, the rapid changes in existing markets over the last several years and the emergence of new markets require intense focus in order to meet and exceed customer expectations. Improving customer service, investing in capacity and enhancing reliability will ensure that CSX handles rebounding traffic levels as well as captures new opportunities in today’s markets and well into the future.

Agricultural Products

In 2010, agricultural products revenue was $1.1 billion, a 10 percent increase over the sector’s revenue in 2009 and approximately 10 percent of CSX’s total 2010 revenue. The number of carloads and revenue per carload for the sector increased from 2009 to 2010 as well. The 446,000 agricultural products carloads in 2010 reflected gains in ethanol, feed grains, wheat, soybeans and ingredient shipments.

Automotive

CSX’s automobile business surged in 2010 as a result of increased manufacturing, new business and successful contract negotiations. During 2010, the automotive industry recovered from a very difficult 2009 market, with North American light-vehicle production (NALVP) rebounding by 38 percent. As automotive production increased, CSX’s automotive sector secured contracts on approximately half of its business, including long-term manufacturer agreements. Auto parts and light-truck volume grew dramatically for the company. The company’s 2010 automotive sector revenue of $800 million represents a 57 percent increase over 2009, and automotive revenue grew from 6 percent to approximately 8 percent of the company’s revenue.

Chemicals

CSX’s chemicals volume rose 9 percent in 2010, driven by the gradual economic recovery. The consumer products, housing and automotive sectors are key demand drivers for many chemical products. The recovery-induced growth in the consumer and automotive markets resulted in higher demand for chemicals used in their production processes, while the market for chemicals associated with the housing sector remained depressed. The company’s yield-management initiatives complemented the volume-related gains, and chemicals revenue grew by 17 percent for the year.

Coal

During 2010, CSX’s annual coal revenue totaled approximately $3.3 billion, representing 31 percent of the company’s total revenue. The associated volume was 174.4 million tons of coal, an increase of 2 percent year over year.

Emerging Markets

The company’s emerging markets business — transporting a diverse mix of products, including minerals, waste, machinery and transportation equipment — showed improvement over 2009 yet has not fully returned to levels seen in prior years. The sector generated approximately 418,000 carloads for CSX with revenue of $615 million in 2010. Notably, 2010 revenue per carload of $1,471 was higher than the previous three years for this sector.

Food and Consumer

CSX transports food, beverages and appliances that end up in local grocery stores, fast-food establishments and other retail destinations across the nation. Much of the company’s annual volume reflects domestic shipments, with a growing number of consumer goods originating in Mexico.

Forest Products

CSX is an essential part of the North American forest products market, providing service to more than 68 pulp and paper mills, 35 lumber mills, 25 panel mills and 30 building materials production facilities. CSX also serves numerous printing facilities, box plants, warehouses and distribution centers for major home improvement retailers.

Merchandise

With $5.8 billion in revenue from 2.6 million carloads in 2010, CSX is one of the largest haulers of merchandise shipments, reflecting a network that serves every major population center east of the Mississippi. Merchandise shipments accounted for 40 percent of the total carloads on CSX’s network in 2010 and contributed to more than half of the company’s $10.6 billion in revenue. The merchandise sector rebounded significantly from 2009, with an 11 percent growth in volume and a 19 percent growth in revenue.

Metals

The CSX metals business is closely tied to the performance of the steel industry, which has recovered somewhat from the recent economic downturn. The metals unit’s 2010 revenue of $520 million is a 30 percent rebound from 2009, when the steel industry saw the lowest demand in 20 years.

Phosphates and Fertilizers

CSX is the leader in nitrogen, phosphate and potash fertilizer volumes — with access to key resources, including one of the world’s largest phosphate reserves, four phosphate production facilities, 15 fertilizer import terminals and five nitrogen production plants.

Intermodal

The CSX intermodal business has a strong presence in key population centers, with 39 terminals located on its network. The company’s intermodal services cover all major markets east of the Mississippi and include the operation of more than 400 scheduled trains per week, primarily transporting finished manufactured goods and providing customers with trucklike service levels on both a ramp-to-ramp and door-to-door basis.