Euclid...this scenario is that a lack of profit invalidates EHH business philosophy, and to get around that, CSX is cheating by showing a profit from the sale of assets...
EHH was doing exactly what the vulture investors backing him wanted him to do - extract every possible penny out of CSX, business viability be damned.
If business is going to rebound after the slowdown, don't you want some assets in reserve to handle that increase?
I believe it's been argued here already that one reason business is down on CSX is because it's been deliberately dumped. I'm not sure just how a twice-a-week shipper fits into PSR. Seems like it would be an impediment - which means it has to go. Eventually, you prune all the branches from the tree, and you don't have a tree any more.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
Murphy Siding charlie hebdo daveklepper Actually, Euclid, from what I remember, CSX's profits have not declined but increased. The problem is, that the increase in profits has resulted from the sale of assttes not needed under the HH rationalization scheme, and that revenue from operations has declined. This is from memory, and admittadly I have no proof at the present moment. Since the operating ratio decreased, it means CSX made more operating profit on revenue prior to extraordinary items. I don't know if that's necessarily true. If the operating ratio went down and revenue went down as well, profits would go down.
charlie hebdo daveklepper Actually, Euclid, from what I remember, CSX's profits have not declined but increased. The problem is, that the increase in profits has resulted from the sale of assttes not needed under the HH rationalization scheme, and that revenue from operations has declined. This is from memory, and admittadly I have no proof at the present moment. Since the operating ratio decreased, it means CSX made more operating profit on revenue prior to extraordinary items.
daveklepper Actually, Euclid, from what I remember, CSX's profits have not declined but increased. The problem is, that the increase in profits has resulted from the sale of assttes not needed under the HH rationalization scheme, and that revenue from operations has declined. This is from memory, and admittadly I have no proof at the present moment.
Actually, Euclid, from what I remember, CSX's profits have not declined but increased. The problem is, that the increase in profits has resulted from the sale of assttes not needed under the HH rationalization scheme, and that revenue from operations has declined. This is from memory, and admittadly I have no proof at the present moment.
Since the operating ratio decreased, it means CSX made more operating profit on revenue prior to extraordinary items.
I don't know if that's necessarily true. If the operating ratio went down and revenue went down as well, profits would go down.
Depends on how much the OP wemt down (profit margin) and how much the revenue declined. I don't have the CSX figures handy, but (purely as an example) if gross revenue declined from $500 mil. to $450 and the OR from 68 to 58, net income would go up from $160 mil. to $189 mil.
The trouble with operating ratio as the prime measure.
Example:
You ship one car and the shipper pays you $100. It costs you $70 to move the car from A to B. OR = 70%.
Another shipper wants to pay you $100 to move a car from A to C. It will cost you $80 to move that car.
Do you take the business? Why or why not?
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Thanks to Chris / CopCarSS for my avatar.
Okay, let’s say that is all true. Why is that a problem? If the assents were not needed, as your comment assumes, then certainly it is better to sell them than it is to keep them. If that resulted in a profit, what is wrong with that? What can be wrong with selling an unneeded item and having the proceeds add to the profit of the business?
It seems to me that what most people here want to read into this scenario is that a lack of profit invalidates EHH business philosophy, and to get around that, CSX is cheating by showing a profit from the sale of assets; and if they did not do that, there would be no profit, and that would therefore invalidate EHH business philosophy.
Selling unneeded assets can lead to a future profit in addition to the immediate proceeds of the sale; because selling unneeded assets ends the need to maintain and operate those assets in the future.
Even if showing a profit is not due to increase in customers and traffic, why is that a problem? CSX-EHH have always said that business will slow down until the operation changes are assimilated. And after that, business will return to levels higher than before the changes.
Murphy Siding Euclid Murphy Siding Euclid Murphy Siding Euclid BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say. What do you think it means? I have no idea what it means. In business, revenue rises sometimes and falls sometimes. Sometimes it rises and falls with the tide, and sometimes it rises amd falls opposite the tide cycle. You can't always go by the tide. Pehaps a little more needs to be said. What's your opinion about CSX having decreasing revenues while thay say business is increasing? I don't have an opinion on that. I would like to see the basis of information that you use to frame the premise that "CSX is having decreasing revenues while they say business is increasing." So you're saying they don't?
Euclid Murphy Siding Euclid Murphy Siding Euclid BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say. What do you think it means? I have no idea what it means. In business, revenue rises sometimes and falls sometimes. Sometimes it rises and falls with the tide, and sometimes it rises amd falls opposite the tide cycle. You can't always go by the tide. Pehaps a little more needs to be said. What's your opinion about CSX having decreasing revenues while thay say business is increasing? I don't have an opinion on that. I would like to see the basis of information that you use to frame the premise that "CSX is having decreasing revenues while they say business is increasing."
Murphy Siding Euclid Murphy Siding Euclid BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say. What do you think it means? I have no idea what it means. In business, revenue rises sometimes and falls sometimes. Sometimes it rises and falls with the tide, and sometimes it rises amd falls opposite the tide cycle. You can't always go by the tide. Pehaps a little more needs to be said. What's your opinion about CSX having decreasing revenues while thay say business is increasing?
Euclid Murphy Siding Euclid BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say. What do you think it means? I have no idea what it means. In business, revenue rises sometimes and falls sometimes. Sometimes it rises and falls with the tide, and sometimes it rises amd falls opposite the tide cycle. You can't always go by the tide. Pehaps a little more needs to be said.
Murphy Siding Euclid BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say. What do you think it means?
Euclid BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say.
BaltACD Decreasing revenues in a raising tide says all that needs to be said.
Decreasing revenues in a raising tide says all that needs to be said.
Maybe it says what you want it to say.
What do you think it means?
I have no idea what it means. In business, revenue rises sometimes and falls sometimes. Sometimes it rises and falls with the tide, and sometimes it rises amd falls opposite the tide cycle. You can't always go by the tide. Pehaps a little more needs to be said.
What's your opinion about CSX having decreasing revenues while thay say business is increasing?
I don't have an opinion on that. I would like to see the basis of information that you use to frame the premise that "CSX is having decreasing revenues while they say business is increasing."
So you're saying they don't?
No I have no conclusion about it. I am just asking how you determine that CSX is having decreasing revenues while they say business is increasing. Are you quoting something that CSX said? If not, what is the source of the information, and what exactly does it say?
Euclid, now you and I are asking the same question, and only the future holds the answer. If NS finds ways to capitalize on increasing truciing costs, finds ways to profitably serve markets (particularly intermodal markets) that CSX/HH walked away from, and shows value to investors greater than CSX, then of course HH was wrong. On the other hand, that is a very big IF, and the future will have the answer.
It will also be interesting to see if CSX re-enters markets taht they walked away from.
EuclidIf not, do you know where I can find the answer?
In EHH's grave.
Never too old to have a happy childhood!
daveklepper 1. I suggested when HH first arrived at CSX that he would be a great success if he concentrated primarily on obtaining new business. Instead, he conecntrated on cost-cutting and disabling the hub-and-spoke organization of business and the subsitution of his pecision railroading organization, which mean dilberately walking away from certain customers and their business. Was he right?
1. I suggested when HH first arrived at CSX that he would be a great success if he concentrated primarily on obtaining new business. Instead, he conecntrated on cost-cutting and disabling the hub-and-spoke organization of business and the subsitution of his pecision railroading organization, which mean dilberately walking away from certain customers and their business. Was he right?
Okay, I will assume that EHH deliberately walked away form certain customers and their business. After stating that, you ask, "Was he right?"
Do you have the answer to that question? If not, do you know where I can find the answer?
Euclid, I gave you precisely what you asked for by directing you to the speicifc news wire report about the closing of specific intermodal traffic lanes that CSX was handling. Please go back though this thread and you will find the specific news item.
And then please stop askig the same question. It is rather tiresome and has been answered.
Anyway, the cooperation with the historical group gives hope for the future. Possibly they have been starting to give the same degree of cooperation with their customers. I certainly hope so.
BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say.
Ol'yes but
Euclid daveklepper 1. I suggested when HH first arrived at CSX that he would be a great success if he concentrated primarily on obtaining new business. Instead, he conecntrated on cost-cutting and disabling the hub-and-spoke organization of business and the subsitution of his pecision railroading organization, which mean dilberately walking away from certain customers and their business. Was he right? Please provide some specific, detailed examples of Harrison deliberately walking away from certain customers and their business.
Please provide some specific, detailed examples of Harrison deliberately walking away from certain customers and their business.
Again I ask for specific examples of EHH walking away form certain customers and their business.
IMO, EHH's legacy will be mixed at best. The idea of operating efficiently is good, the implemetation not so much.
Cutting costs is easy. Building revenue is hard. Which one can you do forever? Which one did railroads (and, unfortunately, most other businesses) choose to adopt? [play Jeopardy music]
Hint, how is throwing away or ignoring your customers a sustainable business practice?
Shadow the Cats ownerHow that happened is simple when the shippers and receivers are getting hammered with Detention time after 2 hours and we are billing them for it and if needed taking them to court to collect it they are getting the idea that hey move those trucks. Even the grocery warehouses are getting it thru their heads that holding a truck for 6 hours is no longer acceptable.
Keep r movin'
But I may be wrong about CSX in the long-term. Their help with the Kentuky Rail Heritage site is noteworthy and speaks very well for them.
Very parallel with the NS efforts if not quite the UP's.
How that happened is simple when the shippers and receivers are getting hammered with Detention time after 2 hours and we are billing them for it and if needed taking them to court to collect it they are getting the idea that hey move those trucks. Even the grocery warehouses are getting it thru their heads that holding a truck for 6 hours is no longer acceptable.
tree68 cx500 I think one of the basic questions is whether the focus is on lowering the operating ratio, which provides greater profit MARGINS on selected business is the best way to greater profits. Who cares, as long as I get my money (and lots of it) now... [/sarcasm] Shadow The average miles in the year were actually 3K more under Elogs. Is part of that due to shippers and receivers having to load/unload more quickly under the possibility of a penalty?
cx500 I think one of the basic questions is whether the focus is on lowering the operating ratio, which provides greater profit MARGINS on selected business is the best way to greater profits.
Who cares, as long as I get my money (and lots of it) now... [/sarcasm]
Shadow The average miles in the year were actually 3K more under Elogs.
Is part of that due to shippers and receivers having to load/unload more quickly under the possibility of a penalty?
My prefered time to start LONG distance drives starts with the 11 o'clock news. In doing so on the Interstates - ALL the Rest Areas in both directions are chock full to overflowing with trucks undoubtedly running Rest Time on their eLogs until after daybreak. During the day the 'normal' number of trucks are seen in Rest Areas with many of the drivers using the facilities and moving on. At night I rarely see a driver using the facilities.
cx500I think one of the basic questions is whether the focus is on lowering the operating ratio, which provides greater profit MARGINS on selected business is the best way to greater profits.
Trust me when the OTR industry gets the ELD crap figured out systemwide for everyone. It took us some time also to adapt to it. I looked at some drivers that were here prior to my carrier putting it into service and 2 years later. The average miles in the year were actually 3K more under Elogs. It just took some time for our drivers and dispatchers to get used to the limitations of the system. However now that they know what the system allows look out. We do not allow any changes to be made to the logs by anyone after they are entered and the computers do all the logging for us. So it is the computer program we bought doing our logs for us.
CSX however totally screwed the pooch last fall with UPS going to the Northeast. UPS is still wanting blood over how much more they had to pay to haul the holiday rush with outside contractors since they could not count on CSX to get the freaking job done. My boss however was happy along with several other small fleets in the area. One guy my husband drove for 22 years ago bought 6 new trucks for his fleet with the cash he made hauling UPS to Boston this holiday season with just 4 trucks. He was able to retire all his non California certified trucks.
A good analagy for precision railroading, Hunter Harrison style, is a watch. Great precision and performs its task beatifully. What I think is a better model for a Ckass I railroad is a modern computer, which actually learns its user(s) preferences and adapts to them---- and also tells time.
I think NS has an opportunity to outstrip CSX with
Better ability to go after new business and also absorb surges by capacity improvment.
Possibly less efficient use of physical resources, track, motive power, and cars, but better use of human resources, with more employess home for wekends and holidays and fewer local swotch crews working late nights, a good response to employee suggstions and flexibility to implement them, and a generally happier envirionment where every employee with contact with the public is also a salesman/saleswoman. And customers also believing the railroiad is out to serve them, rather then they serving the railroad.
More responsiveto customers' needs in general, with the proper computer technology, ability to handle them efficiently.
Ability to see the good future in some not-quite profitable lanes of business today, that have the potential of becoming vrey profitable in the future.
I think NS can do this, but it is not HH Precision Railroading. In the long run, investers will be happier with NS.
PSR is so great locomotives only need servicing one trick a day.[/sarcasm]
http://www.times-news.com/news/local_news/csx-eliminates-employees-at-cumberland-facility/article_e2b62060-5560-11e8-bf43-bf859f21ed49.html#utm_campaign=blox&utm_source=facebook&utm_medium=social
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