Like all railroads, CSX Transportation is hurting from the deep business slump that saw industry-wide carload traffic drop by 25% in May. But like most railroads, CSX is sticking with a strong capital investment program this year in anticipation of post-recession traffic growth.
In a speech to Cornerstone, the regional economic partnership of Northeast Florida, on June 5, CSX Chairman and CEO Michael Ward renewed his pledge that the railroad will spend about $1.6 billion on capital improvements in 2009, just a little lower than last year's $1.7 billion. It's part of a three-year, $5 billion spending program.
As Ward put it to the Cornerstone group, "We were really doing stimulus before stimulus was cool."
The latest economic forecast calls for a 90% increase in railroad traffic over the next 15 years, due not only to a rise in normal demand but also to an acceleration in the shift of long-distance traffic from trucks to rails.