Ladies and gentlemen, thank you for standing by. My name is Lisa, I'll be your conference operator today. At this time, I would like to welcome everyone to the CSX Corporation Q4 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star one again. Before beginning, the company would like to remind you that the forward-looking disclosures have been provided on slide two, and non-GAAP disclosures are on slide three. I would now like to turn the call over to CSX President and CEO, Joe Hinrichs. You may begin your call. Hello, everyone. Thank you for joining our conference call. I'm here with Kevin Boone, Jamie Boychuk, and Sean Pelkey. We are excited to update you on our quarter's results and share our initial views on the upcoming year. I first want to thank all our CSX employees for their dedication as they work diligently on behalf of our customers through all the challenges and uncertainties that we faced in 2022. Because of their efforts, our network has continued to run safely and our branch open up performance has been very strong. We have accomplished a lot over the last four months since I joined the company. This in between my visits to our railroaders out in the field, visits to our customers, our investors, and our many partners in the government, we finalized agreements with our labor unions. We reached a positive solution for the Gulf Coast with our colleagues at Amtrak. We started to make updates to the nuts and bolts policies on attendance to make a big difference for our employees' quality of life. I am particularly proud to report that our service metrics continued to show real improvement into the Q4 after starting a clear upward trend in the early fall. We are very pleased this progress has continued throughout this month. As we anticipated, our hiring successes have allowed us to deliver better customer service that will allow us to capture more business with more volume over time. Looking forward, we are focused on building on our momentum, leveraging our industry-leading operating model, and growing this railroad. As we go through the details and answer your questions, I believe that you will get a great sense of the energy and optimism that we all share across the organization about the opportunities ahead for CSX. Let's turn to our presentation to review the highlights for the Q4 and the full year. CSX generated over $3.7 billion in revenue, up 9% from the previous year on 1.5 million car loads in the quarter. Revenues benefited from higher fuel, higher fuel surcharges, strong core pricing, and higher storage and other revenues. Operating income increased 7% year-over-year to $1.46 billion, and our operating ratio was 60.9%. As we've reminded you before, our Quality Carriers trucking business adds roughly 250 basis points to our OR. Earnings per share increased 17% to $0.49. Quickly looking at the full year 2022, our revenues of nearly $15 billion were up almost 20% compared to 2021. Our full-year operating income of $6 billion increased 8%. Excluding the gains from the 2021 real estate transaction with the Commonwealth of Virginia, our operating income grew in line with our guidance for double-digit growth. Operating ratio was 59.5% for 2022. Finally, earnings per share increased 16% in 2022 to $1.95. Let me turn it over to Kevin, Jamie, and Sean for details. Thank you, Joe. Turning to slide seven, merchandise revenue increased 7% in the quarter as a 9% increase in revenue per unit more than offset a 2% decline in volume. For the full year, merchandise revenue increased 9% on 1% lower volume. 2022 merchandise growth was driven by higher fuel surcharge combined with an increasing pricing environment as inflation accelerated through the year. Looking forward to 2023, we have significant network momentum as we begin the year, and we expect to leverage industry-leading service into growth opportunities with our customers. This is reflected in our recent customer surveys, where we have seen a significant improvement in overall customer satisfaction scores. We see opportunity for solid volume growth in merchandise for the year, led by continued strength in automotive, our growing export classics business, and share gains as customers respond to our improving service. This growth is likely to be partially offset by weaker housing-related and domestic chemical shipments as we start the year. On slide eight, you can see Q4 coal revenue increased 20% on 9% higher volume and a 9% increase in revenue per unit. Full year revenue increased 36% on 1% lower volume and a 38% increase in revenue per unit. In 2023, we expect export coal volumes to grow in both mets and the thermal markets. We do expect benchmark indexes to decline from the elevated averages of 2022. We're optimistic about the potential positive demand impact of China's reopening, while on the supply side, we have a new 4 million ton met coal mine coming online this year. We also anticipate volume opportunity as we lap 2022 issues, including reduced production at some CSX-served mines and capacity limitations at the Curtis Bay and Mobile export terminals. We expect domestic volumes to be driven by low thermal stockpiles that remain below historical averages. Healthy inventory levels will allow utilities to better respond to natural gas volatility and more readily dispatch capacity to reduce stress on the U.S. power grid. U.S. steel production, which drives domestic coal consumption, could benefit from a recovery in the automotive industry as well as higher infrastructure demand. Turning to slide 9. fourth quarter intermodal revenue increased 4% as a 9% increase in revenue per unit more than offset a 5% decline in volumes. For the full year, revenue increased 13% on flat volumes due to a 14% increase in revenue per unit. International intermodal markets continue to be negatively impacted by slowing activity, which looks likely to continue into the H1 of 2023. Imports have declined, and warehouses have seen elevated import inventory levels. To help counter this, we are pursuing several initiatives to bring new solutions to our customers to help them reach new and existing markets. With our domestic intermodal business, we see opportunities even as the trucking market has softened. The team is focused on accelerating truck-to-rail conversions, and now with equipment constraints largely behind us, the team has more opportunity to pursue these initiatives. We are seeing existing customers and those that are new to intermodal adopt strategies to drive more of their transportation spend to rail. The team is doing a great job of identifying these opportunities and building the relationships to drive this growth. Finally, moving to slide 10, let's discuss CSX's role in reducing our customers' emissions. As we pursue truck-to-rail conversions across the markets we serve, we are actively promoting rail's environmental advantages to our customers, who are increasingly looking for ways to reduce their own emissions. These are board-level initiatives for our customers, and the opportunity to choose rail over trucks provides real, measurable savings across their entire supply chain. In 2022, CSX customers avoided emitting 10 million tons of carbon dioxide by choosing to ship with CSX versus truck. To continue providing an emissions advantages for our customers, we need to keep innovating. We are not only piloting new technologies that should provide fuel savings like Trip Optimizer Zero-to-Zero, but we are exploring emerging technologies that can be implemented in the future and keep CSX at the forefront of delivering best-in-class efficiencies. Providing visibility to our customers is also a priority. I'm excited about the additional insights we will provide to customers to help them identify and convert incremental freight to rail by utilizing our updated Carbon Calculator platform that will launch in the Q1. Lastly, we are proud of the recognition CSX has received for our sustainability efforts, with several of our awards listed on this slide. It is a priority for us to remain an industry leader in environmental stewardship, and we look forward to sharing more details on the several projects we have underway throughout the year. Now, let me turn it over to Jamie to discuss operations. Thank you, Kevin. Good afternoon, everyone. Safety remains our top priority at CSX and has been the foundation for our service restoration. As shown on this slide, the personal injury frequency index was flat from the Q3 and unchanged for the full year. The FRA train accident rate increased from the Q3 but improved versus the prior year. Most importantly, for the second year in a row, we ended the year without a life-changing event. These results were delivered with onboarding over 2,000 new conductors during the year and underscores the safety culture that runs deep within our ONE CSX workforce. New hires learn the importance of operating safely in the classroom, but the most impactful lessons occur day in and day out on locomotives and in terminals, working with more experienced employees. These daily interactions are reflected in our recent safety performance and emphasize the commitment to our operating safely at CSX. I would like to recognize the over 6,200 employees within CSX's engineering department, which set a record for the lowest number of train accidents in the department history. This is a true accomplishment given the nature of their ballast level work. In the year ahead, we will continue to instill the safety culture within our new hires, maintain that culture among our experienced employees, and focus on the training and discipline we need to reduce human factor incidents. Moving to the next slide, you can see the success that our entire team has had in driving meaningful service improvement with a clear trend emerging around the middle of the Q3 as staffing levels at many of our locations reached key thresholds. Even with the temporary hit from the weather towards the end of the year, average velocity was up 11% sequentially in the Q4. Dwell was down 13%. Trip Plan Compliance improved by several percentage points for both intermodal and carload. This progress has not stopped as we crossed into 2023, with our service metrics continuing to trend towards pre-pandemic high-water levels of late 2019 and early 2020. Our team is focused on improving network fluidity and delivering the consistent, reliable service that will encourage our customers to ship business onto our network, and the data shows that we are well on our way. Turning to hiring. A robust training pipeline and over 350 conducted promotions over the Q4 allow the team to achieve our long-stated goal of 7,000 active T&E employees. Getting our resources to this level has driven the service momentum Joe discussed a few minutes ago, and it will continue to support improved service into 2023. Going forward, we expect to stabilize active T&E headcount with targeted hiring continuing for key locations and to offset attrition. I will turn it over to Sean to discuss the financials. Thank you, Jamie, and good afternoon. Looking at fourth quarter financial results, revenue increased 9% and operating income increased 7% to $1.5 billion as top-line gains outpaced several expense headwinds that I will discuss in more detail on the next slide. Interest and other expense was $6 million favorable compared to the prior year, and income tax expense increased by $15 million. The effective tax rate in the quarter was 21.9% as a result of favorable adjustments to deferred state taxes. Our expected tax rate going forward continues to be 24.5%. Q4 net earnings increased 9% to $1 billion, while EPS grew 17%. Full year 2022 results were highlighted by top-line growth of 19%. Operating income was up 8%, which includes a four point impact from the Virginia real estate transaction, resulting in 12% growth when adjusting for these gains. Let's now turn to the next slide and take a closer look at fourth quarter expense. Total fourth quarter expense increased $210 million compared to the prior year, driven primarily by higher fuel costs and inflation. Fuel expense was the most significant driver, up $129 million due to higher prices. Labor and fringe expense increased $23 million as the impacts of additional headcount and wage inflation were partially offset by lower incentive compensation. PS&O increased $54 million, primarily due to higher operating support and terminal costs, which will remain somewhat elevated near term as operations continue to improve. PS&O inflation is also running around 5%. The quarter included about $10 million of expense from obsolete inventory and technology write-offs. Depreciation increased by $33 million in the quarter, which includes an ongoing quarterly impact of about $20 million related to the completion of a periodic equipment study. As a result of this study and a higher net asset base, full year depreciation expense will be up approximately $100 million in 2023. Equipment and rents was relatively flat versus the prior year. Gains on property dispositions increased $31 million. We are always looking for opportunities to leverage excess real estate, we'll likely have a few small gains. We aren't expecting any significant sales activity in 2023 at this point. Overall, congestion-related expenses were slightly above $30 million in the fourth quarter, and part of that cost was incurred during winter storms at the end of the period. Despite elevated inflation and increased headcount, we expect to deliver strong cost efficiency throughout 2023 as better fluidity reduces terminal costs, overtime pay, and other expenses. Now turning to cash flow on slide 18. Full year free cash flow, $3.7 billion, decreased $100 million, but was approximately $100 million above prior year results, adjusting for the Virginia transaction. Operating cash flow increased over $500 million on higher earnings, more than offsetting approximately $350 million of additional capital spend from our continued focus on both investing for the long-term reliability of our network, as well as identifying and executing high return strategic projects. After fully funding capital needs, we returned nearly $5.6 billion to shareholders in 2022, including over $4.7 billion of share repurchases and $850 million in dividends. We exited the year with a strong balance sheet and liquidity position, including $2.1 billion of cash and short-term investments. Looking forward, we remain committed to a balanced and opportunistic approach to returning excess cash to shareholders. With that, let me turn it back to Joe for his closing remarks. Thank you, Sean. Before we discuss our outlook, I want to briefly touch on a couple of key ideas that we think about the ONE CSX concept and how it fits together with the fundamentals of scale railroading that are the core of this company. This past year has seen a lot of commentary from many different parties about what scale railroading is and how it's supposed to work. For us, it really is quite simple operating philosophy based on the five principles that you see across the top of slide 20. The key, just as it is with the railroad network, is to keep everything in balance, optimize your assets, and ensure you show respect for your employees. Be disciplined in cost control and maintain your commitment to good service. If you can't service your customers well and reliably, all the cost control in the world won't deliver a healthy, growing business. CSX has been tremendously successful over the last several years as the company has undergone its transformation. In my view, we've done particularly well across the first three of these scale railroading principles. The opportunity for us now is to focus on getting to an even better balance with those last two. We will redouble our efforts in serving our customers and ensuring that our employees, the people who are delivering that service to our customers, feel valued, appreciated, and included. To address this and bring out the best this operating model can deliver, we are building a ONE CSX culture that prioritizes our relationships and leverages our common goals. Whether you are an employee, a customer, or a shareholder, you want a strong and thriving CSX. A healthy culture leverages that alignment to do better together. Under each heading, you will see a couple of the ways we have brought these principles to life over the last year. At the bottom, we give examples of what we aim to do. As an example, for customer service, we have added the T&E resources we have needed to increase capacity, and we have built resilient momentum as our services measures have improved. Looking forward, it is critical that we ensure that our service metrics reflect our customer experience and that we are measuring and evaluating ourselves in the right way. We also know that we have to improve the way that we interface with our customers and make it easier to do business with us if we are going to win market share from trucks. Every week, we get together as a leadership team. We are challenging ourselves to find new ways to address these issues and take advantage of the great energy that we are creating here at CSX. We have tremendous talent here, and with these principles and our roadmap, we have a clear collective goal. Let us conclude the review of our outlook 2023 as shown on slide 21. First, as our service levels keep improving, we expect to achieve overall volume growth for the year, which will outpace real GDP growth, driven largely by strong contributions from merchandise and coal, as Kevin discussed. That said, we do believe the international intermodal volume is likely to be soft, particularly over the first half of the year, as imports have slowed and retailer inventory levels have recovered. The pricing environment remains favorable for us. Our customers have experienced substantial inflation and understand that we face our own cost pressures, including the effects of the recent labor agreements. This transparency has helped us as we renew our pricing agreements, which will support our top-line performance. There are a couple of important things to note for 2023. First, we do expect revenues from intermodal storage to decline through the year as supply chain conditions improve. We currently believe it is reasonable to expect we will see a reduction of approximately $300 million in intermodal storage revenue compared to last year, which would imply a quarterly average close to levels seen in early 2021. Second, international met coal benchmarks have recovered from their lows of last fall but remain volatile. High-quality Australia met coal averaged roughly $355 in 2022 and sits at $315 today. It is likely that the average this year will be lower year-over-year, which will impact our coal RPU and our total revenue. Regarding profitability, we will face cost pressures in 2023, but we know that we can get better operationally. Where it is possible and where it makes sense, we will make every effort to realize efficiency gains and reduce some of the extra costs that we have been carrying to manage through the congestion and resource constraints of that post-pandemic period. In the end, our margin performance will largely depend on our success in driving more volume through our network and realizing potential operating leverage. Finally, we estimate that our capital expenditures will increase to approximately $2.3 billion, driven by a full year of spending for Pan Am, additional equipment for Quality Carriers, truck-to-rail conversion opportunities, investment in strategic high-return growth projects, and the effects of inflation. Before we close, I want to emphasize what an exciting time it is for all of us to be a part of the ONE CSX team. We have a common goal to profitably grow this railroad, and you are seeing the real progress that we are making toward that goal as we put people and resources into place. I am personally very optimistic about the opportunities ahead, and I look forward to updating you on the achievements throughout the year. Thank you. With that, we will now take your questions. Thank you. Again, if you would like to ask a question on the phone line today, that is star one on your telephone keypad. The company has asked participants to limit themselves to one question. With that, our first question comes from the line of Amit Mehrotra with Deutsche Bank. Thanks, operator. Hi, everyone. I wanted to ask about yields, kind of on a consolidated basis for this year. Obviously, the supplemental revenue and fuel will be somewhat of a headwind. I guess standing here today, would it be fair to say kind of yield be flattish on a net basis? Sean, you know, I guess if revenue is kind of flat, can you just remind us of kind of the costs that are in the system that you think can be reversed to maybe offset some of the cost inflation? Thank you. Amit Mehrotra, this is Sean Pelkey. Yeah. In terms of the yields, you know, I think Joe Hinrichs sort of laid out our expectation on the coal side, perhaps a little bit lower, looking at the comparison versus some of the record levels last year. Fuel, you know, potentially a little bit of a headwind on a yield basis as well. We'll have a little bit of positive mix, at least in the H1 year, you know, the pressures on intermodal specifically relative to the growth that we expect in merchandise and coal. That's the yield story. In terms of the costs, you know, I think there's a number of different categories. Certainly with the intermodal terminals becoming more fluid as some of that traffic moves its way out of the system and starts spinning again, we should see some costs come down, and the terminals are in very good shape right now. We should see reduction in freight car rents, as our cycle times improve, and they have already. Things like overtime and ancillary costs related to the crews getting hung up, last year with delays in service, and then, you know, locomotive maintenance as we're able to spin the assets faster here. Those are a few categories where I would say we ought to expect some improvement this year. Sean, any numbers around that, though? I mean, in terms of, I know you've talked about $40 million a quarter, but any sort of quantification around some of those inefficiencies? Not a specific number, no. I mean, we're gonna have inflation headwinds, right? think probably in the 4%-5% range. you know, our goal is gonna be to offset as much of that as we can, both through taking out some of those extra costs that we carried last year, as well as continuing to find efficiency gains across the business. Okay. Thank you very much. We'll take our next question from Justin Long with Stephens. Thanks. Good afternoon. There are a lot of moving pieces this year in the outlook, so I was just curious if you could give us any directional color on the year-over-year change you're anticipating for both revenue and operating income. Maybe you could comment on what that trend line could look like throughout the year, if things are gonna get better or worse. Would just love some additional thoughts. Yeah, Justin, we're not going to get specific in terms of the guidance itself. You know, when you look at first half, second half, you know, the volume comps on coal are a little bit tougher in the second half than in the H1. In terms of intermodal, Kevin talked a little bit about some of the headwinds we're seeing on the international side here in the first half of the year. Those are really sort of the big drivers on the volume side. In terms of other revenue, you know, that coming down about $300 million for the year, obviously second half of 2022 was higher than first half of 2022, we'll be facing sort of a bigger headwind there. In terms of overall operating income, you know, I think we've laid out some of the factors, right? I think we feel great about our ability to recapture some of the share that we missed in 2022, given where the service product is, given that we've got the headcount that we need, and we've got the assets that we need, which is why we're gonna, you know, grow above GDP. We're gonna see gains in merchandise and in coal. We've got a strong price environment. We've got the cost opportunities that I've talked about. On the flip side of that, we have a few headwinds, between the supplemental revenue, the other revenue piece, higher depreciation, and probably lower real estate gains. Those are the, those are the factors. You know, that being said, I think the fact that we are expecting growth, and as we add that growth to the system, we're gonna add it at strong incremental margins. Okay. Got it. Thanks. We'll take our next question from Brandon Oglenski from Barclays. Hey, guys. Thanks for taking the question. I guess maybe piggybacking off that answer there, Joe, I know you've only been there a couple quarters now, but, you know, we've heard for a year plus that the real limitation here was headcount, resources, and more importantly, service levels that you're delivering. I mean, we're seeing that come through the data, I think, pretty strongly in the Q4 and as we start out here in January. Can you talk to how you're gonna convert that? Kevin and Jamie, maybe how closely are your teams working together to ensure, you know, that you're growing in the right places? Because I think in the past, we've seen growth that can come in the wrong places and lead to even more op challenges for the other carriers. Thanks, Brandon. I think this is Joe. First off, thanks for recognizing the pretty significant service improvements in operating performance that we're seeing, continuing into January. Our team works great together. So for what it's worth, and clearly Jamie and Kevin, their offices are next to each other and they're talking all day long. I'll let them talk more about that. You know, you referenced the fact that there's been some conversation for quite some time that our challenges were, you know, manpower levels and then how that affected the fluidity of the network. We're seeing, as you just referenced, the performance that comes from getting those manpower levels where we want them to be and, you know, running this network the way it would run prior to the pandemic, which is a very strong operating team. The conversion opportunity is to demonstrate some repeatability and predictability around our performance and to show our customers that we have the capacity in place and we have the performance to demonstrate that you should come back to us. I'm feeling optimistic about that. In the conversations we're having with customers, they're recognizing the improvements that we've shown for the last several months. They're also confident in our ability to continue that, especially now that we have the manpower levels where we want them to be. You know, if you look at it, we're still not meeting all the demand that's out there for car loads, at our business, for our business. As we go through the year, we'll look for every opportunity to do that. I'll let Kevin talk more about some of the opportunities in the markets themselves, and I'll have Jamie talk about the operations. Thanks. Yeah. Brandon, you did mention, you know, the obviously the remarkable improvement in our service that we've seen, and it's a real change. There's a lot of excitement around this organization about it and what we can do going forward. Joe has brought both Jamie and I's teams together to talk about some of the key markets, and there's been a lot of interesting ideas that have come out of that, where we can really leverage what we can do service-wise and what we can do creatively to create those opportunities for us. Those Those things are the fun part of what we do every day. You know, we're doing a lot less of that and a lot less of customer service and a lot more of coming up with new ideas and having those discussions with our customers about growing. I'll tell you know, I've had a chance to meet with a lot of customers over the last month or two. You know, every time, probably 90% of those conversations, we walk out with a lot more opportunities to pursue. Sometimes it, you know, means that we have to think differently. We have to introduce customers to what the intermodal product is or what we're capable of. What we're capable of today is much different obviously than what we were capable of a year ago. The team is getting together, the whole sales and marketing organization. Jamie's gonna spend time with them. Joe's gonna spend time with them next week, and it's off to the races. It's up to us to find those opportunities and really pursue them. I'll hand it over to Jamie to talk about the ops side. I think really the only thing I can add to that, you know, there's a lot of capacity out there. What Kevin and I talk about is where is that capacity, what can we do with that capacity, and how do we get out there and sell it? My team is, you know, out in the field ensuring that they are talking with customers more than they ever have because they have time to do that. Previously, you know, we were trying to find a crew to run a train here or there or wherever else. Now they have the time to sit back and deal with any of those customer demands that might be out there that helps Kevin and his team grow. Some of those discussions we have are what is the customer really looking for? What is it the right metrics that we're looking at that the customers are looking for? That first-mile, last-mile improvement that the team has been able to put together is really record-breaking for us. If I look back at the last six years, we haven't. You know, 2022 unfortunately wasn't the best year for us, but exiting 2022 with our customer service and in 2023 are some of the world record numbers we just haven't seen. Our job is to keep producing those numbers and making sure Kevin and the team has what they need to get out there and sell and commit to the customers that what you see out there is what you're gonna continue to see. Some great collaboration between our two groups. Thank you. We'll take our next question from Chris Wetherbee with Citigroup. Hey, thanks. Good afternoon. I guess thinking about the outlook and the optimism around growing merchandise and coal and good incremental margins with that coming on, sort of comparative or contrasted against some of these what are perceived to be very high margin sort of revenue headwinds that you have, whether it be the accessorials coming down $300 million or the coal export coal yields coming down. You know, when you think about those two relative to each other and the potential for cost out, I guess any help in terms of how to think about operating ratio or the outcome of that, whether it be maybe first half versus second half or across the whole year would be helpful. Just I think that perception of high margin on those headwind pieces is something that we're struggling with a little bit. Yeah, Chris. Obviously, the coal yields, there's no cost associated with that. On the accessorials, there are costs associated with, you know, congestion in the terminals as well as needing to rent out space at container yards to move those containers around. You know, that's part of the, you know, call it $150 million or so of additional costs that we carried over the course of this year. Some of that will adjust down. As we grow the business, you know, our confidence is in the fact that we can grow it at very strong incrementals. You put those together, you know, I think the question around what happens to the OR really depends on how much growth can we convert. We talked last year about the fact that, you know, there was demand out there that we weren't able to meet 'cause we didn't have the crews that we needed in the right places. We've got those crews now. There's a real opportunity in front of us. Okay. Thank you. We'll take our next question from Scott Group with Wolfe Research. Hey, thanks. Afternoon. Maybe I'll try it this way. How much volume growth do you think you need to be able to grow earnings this year? Then, you know, sounds like there's gonna be some OR pressure this year. You've got some headwinds. I think that's understood. I guess, Joe, I guess wanna understand, what's your commitment to longer term OR improvement kind of beyond 2023? Just thinking out the next, you know, several years. Yeah. Scott, on your on your question about how much growth, you know, I don't think we're in a position to answer that one right now, which you've got to run it through the model, you know? I think we've given you enough of the factors, and I think the fact that we, you know, sort of pointed to coal and merchandise as areas where we think we can sort of meaningfully outperform whatever the economic indicators that are out there is a reflection of the fact that, you know, we feel good about where we are from a capacity and service standpoint and the ability to sell into that market. We're not gonna give you a specific number there. Yeah. This is Joe. On the OR question, I think there's a couple of points here. I'm very confident that our team will continue to deliver on the denominator side operating improvements and continue to show strong operating results. On the numerator side of the equation, you're right in the sense that there were some things that were, you know, strong tailwinds last year, the fuel surcharge, you know, intermodal storage, coal pricing, etc. We'll see how much of that repeats in 2023. That certainly helped the numerator side of OR last year, and maybe some of those things won't be quite as strong In 2023. Having said that, on the numerous side, the volume growth opportunity that we can now go after with the confidence that we have in our operating model and our performance, and knowing that, for our customers who are feeling cost pressures and feeling inflation pressures, and potentially even feeling, effects of a slowing economy, are gonna be looking for cost reduction opportunities. We feel very, very strongly that this year and beyond, continue to demonstrate the capacity that we have in our performance, the growth opportunity will be there for us, as we earn the right to do that and get that business. Our customers will be wanting to do more business with us. In addition, of course, we have the environmental advantage of ESGs and emissions when it comes to rail. All that being said is we're not gonna put a target out there for OR. We're very proud of our performance. I mean, last year with Quality Carriers, we still had, you know, an operating ratio for the year under 60. We know what it's like. And that was not at our optimum performance level, as we all will admit. We believe there's a strong performance inside of this company that will continue to be delivered. The uncertainty is around some of those revenue pieces, in this year and beyond. Our challenge is to deliver real growth in the business, which does deliver strong incremental margins and continue to control our costs, utilize our assets well. That should lead to very strong performance, you know, within an operating band of OR that, you know, that we'll be comfortable with. At the end of the day, you know, this company is very focused on delivering margins and delivering growth with profitable growth, with margin improvement, which should lead over time, to a good OR. Okay. Thank you, guys. Appreciate it. Our next question comes from Jon Chappell with Evercore ISI. Thank you. Good afternoon. Kevin, as we watch these service metrics improve significantly since really the middle part of last year, and this intermodal trip plan performance just consistently, you know, around 90 in industry best standards, it's a little confusing that, you know, even given the headwinds, maybe your intermodal volumes are running lighter on a year-over-year basis than, you know, most of the other Class Is. Can you help us explain, you know, any disconnect between those improving metrics and some of those intermodal shortfalls that may be unique to you? Maybe that also ties in then to explaining a bit more of some of those strategic opportunities that you noted in your prepared remarks. Yeah. I think when you look at... Look, three years or three weeks doesn't make a year, and so, we've got a lot of work to do as a team. We, I think you'll see over the last two years and through the pandemic that we really outperformed the industry, and a lot of that growth that we mentioned before came on the inter-international side. We don't pay, you know, we don't spend a lot of time thinking about the other Class I railroads, but I do believe we probably have a little bit higher percentage of our businesses, you know, obviously, exposed to that international market where we've had great success and we see a long-term outlook that's very positive for us. I think that's probably contributing to some of the things we're seeing here recently. We've obviously had great performance and continue to think we'll win share in the market. The team's got a number of initiatives that will take form later on in the year that will drive incremental business to the railroad. Excited of what we can do in the quarters ahead. Thanks, Kevin. We'll take our next question from Tom Wadewitz with UBS. Yeah, great. Good afternoon. Just had a clarification for you before the question. I don't know if I caught what your GDP assumption is or which forecast you're referring to just in terms of how we anchor to the volume comment. Joe, I wanted to see if you could offer some more thoughts about your comments on relationships and I think tying into labor. How do you think about how you want that relationship to change? You know, does that cost you something to do that? You know, what's the benefit over time? Is it just, you know, hey, attrition's running 15% a year, we want it to get down to five, and that saves us or helps service? Just, you know, some broader thoughts when you talk about relationships and labor, you know, what do you mean by that, and how do you think about what that does over time? Tom, on your GDP question, roughly half a percent growth is the GDP number that we're looking at. Our guidance is to grow in total above that with, you know, intermodal headwinds and solid growth across the other markets. Tom, this is Joe. Thanks for the question regarding labor. Lots of thoughts here, but I'll try to be concise. You know, first, just a reminder to everybody that this is a service business. You know, we provide a service to our customers. We move their goods from point A to point B, and we're proud of the way we do that. Remember that, in a service industry, in a service business, it's all about the employees. You're not selling a product, you're not, you know, developing a product. You're really relying on your employees to represent your company in the service of your customers. I start there because that's so critically important to understand why it's so critical to have a really strong relationship with your employees, including those represented by unions, because they're the individuals doing the work, providing the moving goods from point A to point B and serving our customers. The motive here isn't to try and leverage relationships to try and decrease costs or find a dollar here and there. It's all about building a culture where our employees feel valued and appreciated and included in the service of our customers in a way that we can demonstrate that CSX is unique and different from the other options they have and provides a value proposition to our customers that we think can be very, very special. There's a lot of... You know, when I've been spending a lot of time out in the field, Jamie and I travel almost every week. As I've learned a lot about this industry, about this business, there's a lot of variability and a lot of independence when it comes to the work that's done out in the field. Because, you know, this is not a factory, assembly line where you're stationed in a, in a certain position and you've got a cycle time to meet, and if you don't make it, all the bells and whistles go off. You know, when you have your employees motivated, engaged, and feeling valued, their efforts to support what your initiatives are greatly enhanced. That's just human nature, and that's really what's important about this relationship, is that listening to our employees, resolving their issues, working on things that improve their efficiency and their work-life balance and their work-life experience and safety and other things, leads to a better service product for our customers, which ultimately leads to a better business for everyone, including our employees. From a labor side, it's really about building relationships and gendering trust and getting to the point where you can have real dialogue around solutions and around ideas and around understanding each other's desires and perspectives so that we can find the best solutions. I have found in my past experiences that when you get to that point, you have a healthier business and you have happier, safer employees who are working better together to serve the customers. That's really the desire here, is to provide that kind of opportunity for our employees. Now, what comes with that? Lower attrition, better recommendations for referrals for new hires and, you know, in the family and friend network, and just a better experience for everybody. That's really a big part of the ONE CSX culture initiative is all around building this team, working well together, and labor is a big part of that. It's a little more complicated in the real industry with 12 different unions. However, we feel really good about where we are with our team. Jamie and his team are working every day. We're having lots of good discussions. You know, we voluntarily, on our own, changed our attendance policy based on feedback that's really impactful to our employees. That's a great first step in this relationship. We're listening to them every day. We're working on problem solving, and ultimately, with the purpose in mind of creating that environment where employees want to be a part of that and want to serve our customers better. With that comes a much more efficient operation and frankly, better service for our customers, which ultimately leads to opportunity for growth. Great. Thank you for all the perspective. Appreciate it. We'll take our next question from Ken Hoexter with Bank of America. Hey, good afternoon, and thanks for the rundown there, Joe. Just maybe can we clarify? You know, Sean, I guess you're looking for volume growth offset by accessorial and coal yield declines, efficiency gains with service costs gone, but inflation up. I just want to clarify, you're not specifically committing to income or operating improvement for the year, right? There was no outlook on what that means for. That's right. for that or the EPS line. Okay. That's right. Jamie, the on-time originations fell to 54%. I think they've fallen now 12 of the past 13 quarters. Isn't the whole name of the game of what you're doing with Precision railroading to leave on time and get that moving? Maybe talk to me about what the network needs to do to fix that. Joe, I don't know if, you know, you've come in, you know, what your thoughts are on operations, what, you know, balance of operations versus, you know, top line growth. Okay. You're right. The last couple of years, really, we've seen our on-time originations drop, and that's been consistent, unfortunately, because of the manpower situation we've been in. I'm happy to say over the past three weeks into this year, we've started to get back up to our record highs. You know, the team is hitting up over 85% on time, which is great. It starts to get us balanced. As we continue to onboard some more folks, we'll continue to get that driven up to that record of, I think in 2019, we were up around 80, 89%-90% on time origination and that's what we're shooting for. It's important. It's an important metric we watch. We made some decisions last year to back off a little bit on that so we could connect as much traffic as we could and not leave things behind. When we did have a crew, we made sure we took advantage of that crew, and we maximized what we could on those train starts. Not saying that we're letting that go at all. We're gonna maximize what's on each one of these trains that we run out there car-wise, but we've now got the people to balance the assets across the network, and you can see it. If you take a look at our velocity, and you take a look at our dwell numbers just in the past three, four weeks, you can see that the network is running much more fluid. We hit that magic number just into the new year that we're looking for, that 7,000 T&E count. Actually, as a matter of fact, we're at 7,100. Today. We're gonna push that number a little bit more to cover vacation coming up in the next few months. We're gonna make sure that we've got the right head count. We're gonna make sure that we've got the right people in the right places, and we continue to drive those metrics that'll drive the rest of the service metrics. I mean, again, TPC, whether it's carload, intermodal, all the rest of it that you see that we put out there, we're starting to get back to our as a matter of fact, we're beyond our record numbers on some of those service metrics. We're gonna provide a product that Kevin and his team can go out there and sell and start growing this company. Ken Hoexter, thanks for the question, and a couple of just additional comments. We spend a lot of time as a team talking about our customer service metrics, whether it's on time, originations and arrivals, whether it's in the last mile, first mile, those kinds of things. I'm really pleased with how the team is looking at everything. We want to make sure that we're seeing the world through the lens, through the eyes of our customers. It's why we get feedback on surveys. Kevin Boone reference, we've seen the best results in our customer surveys that we've seen in quite some time. I feel really good about that. Now, the balance between top line growth and operations, I mean, I think they're intertwined. I said this in October, I feel even more strongly about it now. You know, we have a phenomenal opportunity here at CSX to leverage our strength and our operational performance that you've seen pre-pandemic, you're seeing now again, to earn the right to talk to our customers about getting more business. That is a lot better than chasing top line growth. To be able to demonstrate that you can rely on us with our capacity and our service levels and our prioritization on your service, to be there for you. I believe very strongly there's business opportunity there. We can allow that to happen naturally, organically, because we have a better product, we have a lower price than most trucking, and we have a better ESG solution and to do that the right way. That's why we've been so focused on getting the manpower where it needs to be and really making sure that we're focusing on the right metrics for the business, and I'm really pleased with where we are. I feel even more strongly today than I did during a call in October about this opportunity. We can't predict what's gonna happen with the economy this year, and that's part of what you're seeing in some of this dialogue, is we're not exactly sure what happens in the second and third quarter. We're very pleased with how the year has started, however, we don't know exactly where the economy is gonna go given, you know, rising interest rates and some of the other things are going on. Actually, you know, you could say that in the data that we've been seeing that, you know, some parts of the economy started slowing down really in October, November, and we just didn't see it in our business because we couldn't meet some of that demand back then. But we feel really good about where we are. We're not gonna chase top line growth. We'll continue to leverage our operating model, but we believe it's there to be earned, and that's the conversation we're having with our customers. Thanks. Thanks, Sean, Jamie, Joe. Appreciate it. Our next question comes from Brian Ossenbeck with JPMorgan. Hey, thanks. Good afternoon. Maybe just on that last part about unmet demand, we hear that a lot across the different Class I rail conference calls. Is there a way, since you're counting on it and you're seeing some of it through surveys and clearly the service has improved, is there a way you can sort of try to quantify that for us in terms of what you lost to what you think is coming back, with, you know, fill rates or anything else you can put around there in terms of a metric? You know, what gives you that confidence that you can count on that coming back, not just, you know, the interest level is there, especially when you have a softer macro and probably contract truckload leads heading lower as well? Thank you. Yeah, Brian. Hey, it's Kevin. I think, you know, Joe actually touched on this really, really well. I think what's probably a little bit underappreciated of what's happened in some of the things that we've seen in some of the major markets that we serve today is, and I had referenced this previously on other earnings calls, we were in that 60%-70% type of order fill rates, pretty much through, you know, most of 2022. What happened starting in, let's call it the late Q3, Q4 in some of these markets, we saw those orders come down and obviously, our fill rates kind of remained, or our makes or whatever, our volumes that we're serving for those customers remained relatively flat. We saw our. you know, our fill rates start to increase, and they're at higher levels now. You know, some markets we see maybe the, you know, the demand, what they're requesting is down 30%, yet our volumes are, you know, slightly down today. What my expectation is and what we're starting to see is, you know, that they've already overshot what they saw, what would be a normal demand environment, and we're seeing order flows start to increase. That's encouraging that it feels like in some of these markets we've established a bottom. You know, anything can happen in the economy, but it feels that way as of right now, we'll see how it plays out. My point on that is as those orders come back and as we're able to meet that demand going forward, that would imply growth versus last year. That's embedded in what some of the guidance that we provided today and why we have a confidence around, you know, accelerating or beating that GDP number is that we're gonna go and capture those orders and those, you know, demand that the customer has out there this year with the replenished workforce and all the things that the operation team is doing. Would you expect that to be more heavily weighted on the merchandise side because that probably was a carload before, or are you seeing real momentum on truckload conversion, maybe m aybe more on the intermodal side. Yeah, I think, I think you'll see it really start on the carload side. That's where we. You know, when I reference the order fill rates, that's really carload specific. You'll remember on the intermodal side, it really was an equipment issue. Good thing is those equipment issues, whether it's chassis, containers, I think we have plenty of those in most locations now throughout that market. You know, you've heard different commentary around that, but there is some softness in the truck market today. There is some optimism, hopefully, as we get in the back half of the year, that that will firm up a bit, and we have every intention of taking advantage of that market as it comes to us. We have the, you know, premier service in intermodal, and it's been reflected in our growth over the last couple of years, and we continue to expect to capitalize on that. Okay. Thank you, Kevin. Appreciate it. Yep. Thank you. Our next question comes from Ariel Rosa with Credit Suisse. Hey, good afternoon. I wanted to stay on that topic. You mentioned some softness, maybe in the trucking market. I wanted to ask to what extent that's an impediment to intermodal volume growth. Then in a more normalized environment, how do you think about CSX's ability to kind of outgrow GDP or maybe something around kind of the magnitude at which you could outgrow GDP versus this kind of loose truck market? Yeah. You know, the truck market is obviously centers around our intermodal product. That's where we go direct with truck. Not that we don't compete on our carload business as well, but that's where you see the sensitivity sometimes. The international market, as everybody's aware of, has been weak, You know, we've had great growth there, and we have a great market that we continue to expect to grow over time. You know, as I mentioned in my recent comments, opening comments that that market probably will be down somewhat, you know, double digits in the first half of the year. It's. Hopefully, as the economy stabilizes and there's some green shoots out there that we'll see some better growth into this second half of the year at least, not the decreases that we're experiencing today. You know, I think every intention here is across our portfolio that we're gonna outgrow the macroeconomy, and I think there's a lot of things that tailwinds at our back. We have, we've had a huge success rate on our industrial development side. We have a lot of new projects that are coming online when you look out beyond this year. Big, big backlog, probably the largest backlog that anybody here can remember in a long time, whether it's new auto plants, you know, metals plants, all those across the board. We've really had a good success rate there, and that will give us growth going forward. Our intention is to outgrow the economy. I know that's not something that the railroads have been able to do, I think with the service product that we're gonna have, I think it's really possible going forward. Thanks for that, Kevin. Then just really quickly, on some of those projects, any thoughts on kind of what the incremental margins could look like, around that? I think, you know, I don't know business that we're bringing on where the incremental margins aren't very attractive and earn a very good rate of return for us. You know, I put my finance hat on every time I look at the business, you know, we're not gonna chase unprofitable business just to show top line growth. All right. We'll take our next question from Fadi Chamoun with BMO Capital Markets. Yes, good evening. Thanks for taking my question. Maybe first on those two boxes and guiding principles that, Joe, you highlighted, improving customer service and developing the employees. Especially with respect to some of the conversation maybe you're having with customers, do you feel that there's going to be a lag between when you start demonstrating the success on the service side and really penetrating that share of wallet with these customers? Or do you think there is really a quick potential turnaround between kind of making those improvement and the time that market share improvement? Second, maybe follow up on just this conversation with Kevin now. Like, looking over, into 2024 to 2025 and assuming we're back into a normalized GDP, given the backlog that you have and given some of these initiatives and the investments you've made in QC and Pan Am, outside of coal, is there a reason why you can't grow volume mid-single digits as we get into this more normalized environment? Ex coal, obviously. Thanks, Rob. I'll take this. Joe, I'll hit the first part and ask Kevin to take the second part since you directed it at him. You know, from my perspective, the opportunity here to grow the business really comes from, you know, increasing that service product. Your question around the timing of that, it's all really individually dependent on each customer, where they are, where are their cost pressures, where are their capacity issues, and what are they looking for. We can't use a blanket statement that, you know, if we demonstrate, you know, these levels of performance for three months, then X comes from it. Really in our conversation with our customers, it's really around, you know, their confidence in our ability to be repeatable and reliable. The answer to that question is different for each customer. I can tell you they're all watching, and they're all noticing, and they're all letting us know that they're really appreciating the progress that we're making. It'll, it'll play out over time, there's nothing inconsistent that we're hearing from our customers about their appreciation for it and recognizing how important it is. Kevin? Yeah. I think the question was, is there a reason why we can't grow mid-single digits? I think Jamie answered the question on the network side. We have a lot of capacity to grow into, and it's, you know, we're gonna use that capacity and go after wallet share with our existing customers and identify new customers. There's no constraints from that perspective. Obviously, that putting up mid-single digits volume and then, you know, with price is a pretty attractive algorithm. We'll have to see what we can do and what the market conditions are at the time. You know, it's a more normalized GDP growth rate, 3% or 4%, then, you know, that's different than maybe 1% to 2%. We'll see how things materialize as we get out of 2023 into 2024, 2025. The great thing is we have some tailwinds from new customers that will be on our railroad, and that will give growth above the economy, hopefully, that will add to that algorithm over time as we build the funnel of all the projects that we've been able to develop, and that will be coming online in the future. Thanks. I appreciate it. Our next question comes from Ravi Shanker with Morgan Stanley. Thank you. Good evening, everyone. Two quick ones here. First, you've said you can grow GDP plus. Many of your peers are using industrial production as a benchmark. In fact, I think one of them has come out and said a couple of years ago that they don't think they can grow faster than GDP going forward, and they think they can try and outpace industrial production instead. A, do you think GDP is the right benchmark for you? And kind of what gives you the ability and confidence to think that you can grow faster than GDP in the long run? Just as a quick follow-up, I think you had said that incentive comp was a tailwind to numbers in 2022. How do we think about incentive comp in 2023? Thank you. Ravi, this is Sean. On your, on your GDP plus comment, look, I think if you look historically and you run the correlations, our business tends to move more closely with the underlying IDP indicators, particularly across the merchandise segment, maybe a little more on GDP in intermodal. You look at this year specifically, the projection for IDP is a decline, and the projection for GDP is growth, and we think we can grow the business. It made a lot of sense this year to peg it off of GDP. On your question on incentive comp, I mean, the year has to play itself out. We always go into the year, planning to hit the targets that we set internally. On that basis, incentive comp would be down a little bit year-over-year versus 2022, but we'll see how that plays out as the year continues. All right. We'll take our next question from Cherilyn Radbourne with TD Securities. Thanks very much. Good afternoon. A question on labor from me. Some of your peers have talked about taking a different approach to furloughs going forward, just given that labor has become more scarce and valuable. I was hoping you could offer some thoughts on how you would approach headcount in the event that freight demand surprises to the downside so that you don't lose the investments you've made in hiring and training this year. Well, Cherilyn, it's Joe. Thanks for the question. It, you know, we got the same stance as we did last quarter. Our T&E workforce is not a workforce that, you know, we would look at furloughing as we move forward. You know, we're looking into the future. Really important that we, you know, Kevin and I obviously are, as we stated here today, work really close together to see not only what's happening today, but what's happening in six months from now, what's happening one year from now. We know that there's customers coming on. You're absolutely right. It, you know, the conductors and filling those positions takes a long time. It can take up to 6 months to fill a conductor's position. We can pull the trigger. Look, if there's a downturn in business, we can use the attrition that's there, which is up to 10%. It's easy for us to hold back classes if we need to to bring those numbers down and rightsize it if we need to. As we continue to move forward, we're looking at continuing to build our numbers up so we can get to a point where we can cover vacation time and making sure that our employees get the time off that at times they've struggled over the last couple of years. We're very close to that number. As you can see from our results, that we're quite happy that we're moving in the right direction with our service. It's a commitment that we've made that we're gonna continue to be looking forward and not doing any knee-jerk reactions, and pull that trigger with respect to attrition if required. Thank you for the time. We'll take our next question from Bascome Majors with Susquehanna. Joe, last time you spoke with us on the October call, you had a few days on the job. That's a few months now. Can you talk a little bit about when or I think you'll be able to roll out, you know, your strategy to the board and investors, and any events like an investor day, other format around that as you look forward to kinda getting to where you wanna be to really kinda put your stamp on the business? Thank you. Yeah. Thanks for the question. You know, just first from a philosophy standpoint, you know, this is a really talented team, we're doing all this together as a leadership team. You know, we get together every Monday, we talk about the business, go through all elements of it. I want to just emphasize that, you know, I'm one piece of that team, but this is a team effort I'm really proud of the team I get to work with every day. It's been, you know, four, five months. Time rolls fast together, but, you know, 20 some visits out in the field and all the other discussions with all customers and regulators and everything else. I feel like I'm learning very quickly, but there's still a long way to go on that learning curve as far as the core business. I'm really excited about the emphasis we have on the customer, and I'm really proud of the progress the team has made on the operating side. All that to say, I'm not sure that, you know, I'm not sure it makes sense to have an investor day just to have an investor day. We wanna do that when we really have some meaningful things to talk about from strategy or technology or some other things. We, you know, trust that we'll do that at the right time when it can be meaningful and not just something we put on the calendar every year just to do. We want it to be impactful. We know everyone it takes everyone's time, we want it to be important. As far as, you know, the strategy and discussion with the board, you know, I hinted this a little bit in October, I spent a lot of time with the board as individuals and collectively in consideration of doing this and their consideration of me. We had a lot of good conversation over multiple months about the opportunity here and where, you know, where to put the emphasis and where to really take advantage of the strengths that exist here. I feel really, really good about the alignment we have with our board, with our team here, and the work we're doing. I'm very pleased with the progress we've made on ONE CSX in just, you know, four months time or so. You can feel the momentum on the culture side, you can feel the momentum on what that means for how employees are working together and then the result effects on our service. I don't feel compelled to come out with some, you know, major strategy, you know, just 'cause I put my fingerprints on it, you know, over in some short time period. I think the key thing is we have a talented team here. We have a strong operating model. We have a good business. I mean, we made $6 billion on less than $15 billion of revenue last year, and we didn't perform our best last year. We're now starting to demonstrate those performance levels that we showed, you know, pre-pandemic levels. That's a long way of saying that I'm very optimistic about the business. I'm excited about it. You'll see incremental ideas and initiatives come out. We really have a strong foundation, and really executing off of that foundation and leveraging the strengths we have is our biggest near term opportunity, as you've heard the team talk about tonight. Just trust that when we're ready to have some more meaningful dialogue on some new initiatives and whatnot, we'll have the right forum to do that. In the near term, you'll continue to see us on a weekly, monthly basis talking about the things we're doing, demonstrating where our priorities are. That's really around, as we've said many times, improving our customers' experience with us and our service we deliver to them and the experience our employees have as, you know, team members of ours as part of ONE CSX, and just getting the most out of working together to make that happen. Those points won't change over time, but how we use technology, how we use our operations and other initiatives will change, and we'll talk about that at the right time. You know, just, you know, summarize what our team's been saying here tonight, you know, we're very confident about the things we can control in our business. You know, operating performance, our capacity now with our manpower, the team we have, the skills and the capabilities we have. You know, there's a little uncertainty about what happens with the economy this year. Watch that very carefully. We feel really good about how we come into 2023, how we're performing so far in 2023, and the feedback we're getting from our customers. We'll leverage that to show that we can deliver growth and that we can build an even stronger business. Thanks. Thank you. We'll take our next question from David Vernon with Bernstein. Hey, guys. Thanks for taking the question. Joe, I wanted to ask you a question on the intermodal share take a little bit differently. I'm just curious about your thoughts on what kind of targets you're gonna be holding the team accountable to delivering over, call it a three or five-year view. If you step back and look at the intermodal market in the east, it's grown at about 38 basis points a year for the last seven years. You guys are doing about, you know, three million units, and you were doing about three million units in 2015, 2016. What should we be thinking about on a five-year view about how much share you could actually put onto the railroad? You know, not looking at the guidance for this year because the economy is weak, I get it's tough to forecast. I'm just trying to think like what kind of targets you're putting out there for the team to hit. Yeah. Thanks for the question. You know, I'm not gonna get into specifics about what our targets are long term, but just conceptually, let's talk about it. You know, just stepping back and, you know, learning about this industry and studying it more closely over the last, you know, many months, even before I joined CSX. You know, we interchange a lot with a number of our Class I colleagues. This is an industry issue as well as a CSX issue, and that is around real growth, volume growth. You referenced it. How do we make that happen? We have capacity. We have a strong fixed cost base, a very, you know, a substantial fixed cost base, and incremental margins are really good. That lends itself to really wanting to grow, like most businesses with those kind of... We have strong margins to start with. How do we grow as an industry, as a company? I mean, that's the discussion we're having and the opportunities we're pursuing over the next several years. From our perspective, we need to demonstrate to ourselves and to others that we can grow volume, ideally above either GDP or industrial production, whatever, you know, ways you wanna measure it, you know, year after year and bring the margins that come with that to show growth in the business, not just on pricing, but also on volume. That is something we're looking to do and we'll continue to challenge ourselves to do. With that comes the customer service metrics and demonstrating continual progression there in our, you know, things like Trip Plan Compliance and first mile, last mile, but also in the way the customers measure things. Are the empties there when they need to be there? Do the loads get there when they need to be there so they can manage their manpower and their business, et cetera. Continual progress, Jamie referenced it, on the customer side. On the employee side, with our employee surveys and with our relationships with our union leaders and our union partners, et cetera, how do we become the kind of environment where, back, you know, what we've had over time, where you have just all this multi-generational activity because people are so proud to be a part of the CSX team and how we work together and the culture we have around each other. You know, there's ways to measure those things and challenge ourselves to be accountable to showing progress. If you bucket them into those areas. Of course, we'll never forget the financial results. Those are largely outcomes of all the things we're talking about, you know, continuing to look at our operating efficiency, continuing to look at our operating income, of course, we'll. Our cash flow, we will always do that. Without getting specific, you can just think about where the emphasis points are and where the priorities are. I've referenced technology a couple of times here tonight, I wanna, you know, come back to that. You know, how do we leverage technology to be more efficient, to be safer, to better serve our customers, and to modernize our business across the enterprise, whether that's in the office or in the locomotive. We see a lot of potential there. Steve Fortune has joined us. We got a great technology team. We're excited about that too. A number of things to think about and challenge ourselves for the future. We'll have more to say about it over time. You know, when we get to a point where we are definitely where we wanna be with our employee relationship and we have a safe, trusting environment with our union partners, where we look for solutions and work for both sides, and then improve the work life of our employees while also serving our customers better and having a more efficient business, we can achieve all those things together. Those are the objectives and I believe we'll get there, and we'll do it the right way. Okay. Jamie, if I could just stick a little follow on in there. You know, as you think about the headcount plan from where we are today, are you expecting to continue to grow it into the year, or do you think we've got enough sort of resource on the property to maintain the service improvements? I would say we are continuing to qualify conductors every week. We still have another 600 folks out there in training out in the field and some in Atlanta. What we're doing as we move forward, now remember the retention rate has not been all that good with the new hires. If, you know, we continue to work on that retention rate and we have a 10% fallout with respect to just regular attrition as we move forward, I'm looking for another few hundred folks onto our headcount to get us into vacation season as we move forward and some of the growth that Kevin and the team see as we continue to move into the year. I'm comfortable with the headcount we have now while the vacation season is low. Over the next few months, we're gonna see that spike come up, and the way that we are guiding into that or gliding into that, our numbers are gonna be able to hold up for what we need to not only continue where we are with our metrics, but to actually continue to improve on them as we move into the year. It's probably one of the first times in a couple of years I've been on one of these calls, and I can say we're comfortable that our headcount is at a good spot and continuing to move into a good spot as we move as we move into the year. All right. Thank you. We'll take our next question from Allison Poliniak-Cusic with Wells Fargo. Hi, good evening. Just wanna circle back to that last question a little bit more. Joe, you had talked about, you know, some of the processes in doing business easier with rails. Could you maybe expand on that a little bit? Do you feel like, you know, in these customer surveys, the ease of doing business with rails is sort of a key limitation right now for some of that structural share gain? Is that something that's maybe, you know, within the next two to three years that you guys can attack that? Is it a much longer term opportunity there? Yeah. Thanks. It's a great opportunity. We do need to make it easier to do business. We recognize, and we referenced that in our commentary tonight. I mean, you think about, you know, the level of visibility that we have in the rail industry compared to, you know, package goods and, you know, UPS, FedEx, those kind of things. We have to improve in that area, and we will improve in that area. It's an industry issue as well as a CSX issue. That's an example. You know, how do we get even more predictable, and give more visibility to our performance and et cetera? There's a number of ways we need to improve to improve the customer experience in our business, make it easier to do business with us. Kevin referenced, you know, we've got some new things in ShipCSX to help with calculations for emissions reduction and those kind of things. How do we keep helping customers get better and be able to use our systems better and be able to work with us better? There's a number of ways we can make that happen. At the end of the day, the thing they want most from us, of course, is to be there on time and to deliver on time and to be reliable in doing that. That's where obviously where our number one focus is. Clearly, we can make it easier for our customers to do business with us, and we can provide more information and visibility, and that's some of the things that the industry is working on. Great. Thank you. Our next question comes from Walter Spracklen with RBC Capital Markets. Yeah, thanks very much. Good afternoon, everyone. My question for Kevin, looking back now at Quality Carriers, and I know this was a little bit of an experiment when you made that purchase, and I see in your CapEx plan you're devoting a bit of capital toward it. Just curious as to what your take has been on it now that it's been under your umbrella for a little while now. You know, by calling it out in CapEx, are you expanding the fleet? Are you strategically looking at growing your trucking operation relative to your rail operation? Could you be looking for any other avenues outside of the company and from an M&A perspective into that trucking space if you see those opportunities pop up here in 2023? I mean, first of all, Quality is a very, very unique asset in a lot of ways. At first, it touches our most valuable market, our largest market, which is chemicals. I can't tell you how insightful. They have different contacts than we do on the trucking side where those purchase managers have never dealt with truck, and introducing that product to them has been eye-opening, and it's something very, very new. When we talk about the CapEx related to QC this year, it's really a rail product. It's not more trucks that we're investing in. It's the ISO tanks that go on the railroad. I am... You know, if Randy was sitting here today talking about it, he is very, very happy with how it's gone so far. The customer uptake has been pretty incredible. So far, we've seen a lot of success, and our only issue is we haven't gotten them fast enough. That's a good problem to have, and we're gonna continue to take delivery of those. Randy has come from the trucking market for a long time, and he has even been surprised about the service product and how quickly we can turn these assets for him on each side. Things have gone extraordinarily well there. The intermodal network is ideal to convert a lot of this traffic that moves over truck today. It's meeting the customer requirements, and we're getting more and more demand from those customers out there as it gets into the market. That's really where the focus and the uptick in the CapEx that we talked about earlier are coming on that, on that rail product that we're extraordinarily excited about. We just think that, you know, the chemical customers in particular are looking for a holistic solution, and it's pretty powerful to go in there and be able to talk and look at their network and tell them what we think fits from a rail perspective and what fits from a trucking perspective. Just when you think about quality, even on the operating side, we're utilizing our current terminals and yeah, that CapEx is exactly right where we're buying the ISO tanks, and we're preparing. Everything else is already there. That fixed asset's there. This. When we went into this, you know, Kevin and I were somewhat hand in hand looking at this business saying, "Is this what we want? Is this gonna work?" It's really fallen in really well. I would say, on the asset side, it's just we didn't get the ISO tanks. We'd like to get them quicker. We'd like to get more of them because there's more business, I believe that Randy and his team can get working with Kevin and his team. Our intermodal terminals have the capacity, and the trains have the capacity. It's a great product on the operating side and very easy for us to move as well. It fits really, really well. That's great color, Kevin, Jamie. Appreciate it. Thank you. Our next question comes from Jeff Kauffman with Vertical Research Partners. Thank you very much, thanks for squeezing me in. I'll just be quick. Sean, you were talking about employee levels, and it looks like cost inflation on the new contract probably around 5% per employee. Year-on-year employees about 7%-8% for the first half of 2023. If I look away from Q4 where the incentive comp helped lower that, and I looked at kind of what's the right run rate for modeling for labor cost inflation, should I be thinking about something in the high single digit, 10% range for the first half of the year before productivity offsets that? Yeah. Jeff, I think on a gross basis, right, on a full year basis, the impact of inflation on the labor line is in that ballpark, right? Mid-single digits. If you look at the headcount, if we didn't hire anybody additional all year long, we'd be up 4% year-over-year. Mm-hmm. Jamie talked about adding 200 to the headcount, so call that 5% up year-over-year. There's your 10%, but we are confident that, you know, as we, as the network continues to spin, we'll be able to drive some efficiency on the labor line. We'll also cycle, you know, as you alluded to, the true up that we had to make in the third quarter on the back wages. That'll be a little bit of an offset. All right. It'll be a little better in the second half. I guess end of day, how much of that labor cost do you think you can offset through productivity? Is there a target out there? Do we just kinda see what we can achieve? Well, yeah, we've got targets. You know, we're gonna reduce overtime. We're gonna reduce crew travel and some of the ancillary costs that go along with that as the network spins faster. We'll be able to offset a good chunk of it, you know, offsetting 5% inflation or, you know, sort of in that range and another 5% headcount would be a lot in a single year. Mm-hmm. We're on the right track. Okay, great. That's my only question. Thank you. Thank you. That does conclude today's presentation. Thank you for your participation, and you may now disconnect.