Freight traffic at CSX Corp. is picking up after COVID-19-related business shutdowns in the spring.
However, as it reported sharply lower second-quarter earnings, CEO Jim Foote said July 22 it is difficult to predict when business will fully recover.
Jacksonville’s other Fortune 1000 transportation company, Landstar System Inc., also reported a drop in earnings and revenue for the quarter on July 22.
CSX reported second-quarter revenue fell 26% to $2.26 billion with earnings of 65 cents a share, down from $1.08 in the second quarter of 2019.
“This was the most disruptive quarter I have experienced in my career with both the fastest decline in volumes followed by one of the most rapid increases in volumes in the company's history,” Foote said in the railroad company’s conference call with analysts.
He said freight volume dropped more than 25% early in the quarter but has bounced back by 20% since Memorial Day.
“We are happy to see the volumes recover from the May trough as the economy strengthens. However, while these trends are encouraging, the ultimate path of the recovery remains too wide to accurately predict at this point,” Foote said.
CSX has cut thousands of jobs in its operations in the Eastern U.S. in the past three years and it made more cuts in the second quarter.
The company ended the second quarter with 18,856 employees, down about 1,500 from the end of the first quarter.
CSX officials said some employees have been brought back from furlough as freight volume improves.
“We've got a good number of employees still on furlough that we want to find work for and we'll continue to bring them back as we see the business level start to come,” said Executive Vice President of Operations Jamie Boychuk.
But some of the layoffs are permanent. CSX in June said it cut 86 jobs, mainly in Jacksonville, as part of a management realignment.
“In terms of the structural changes that we made during the last couple of months here, I tasked the team with taking a look at everything that we do and seeing if there is a better way to do it,” Foote said.
“It wasn't just an exercise in mandatory headcount reductions but it was an opportunity to see if during this more difficult period of time, we could assess almost everything we did in the organization and figure out how we could eliminate layers and get things done more effectively,” he said.
“As a result of that, we basically aligned duties and responsibilities in the areas where they probably should have been a long time ago.”
Landstar revenue drops 21%
Trucking company Landstar System Inc. reported earnings of 63 cents a share, down from $1.53 in the second quarter of 2019, with revenue dropping 21% to $823.5 million.
“We entered the 2020 second quarter knowing we would face a very soft freight demand environment,” CEO Jim Gattoni said in a news release.
Landstar is seeing some improvement so far in the third quarter. Gattoni said the number of freight loads and revenue per load are down by a mid-single-digit percentage in July, but the freight volume is improved from the peak declines of April and May.
Landstar is forecasting third-quarter revenue of $885 million to $935 million with earnings of $1.11 to $1.17 a share, down from last year’s revenue of $1.012 billion and earnings of $1.35.
Despite the drop in earnings, Landstar also announced its board of directors increased its quarterly dividend by 2.5 cents a share to 21 cents.