Railroad operator CSX Corp. said Wednesday it predicts double-digit declines in shipping volume to continue through the second quarter, and expects to furlough more employees as a result.
The Jacksonville-based company said Wednesday in a conference call with analysts that sales will continue to fall as demand to ship goods by rail plummets. Railroads face stiff competition from trucking companies that have slashed rates to remain competitive, as well as overall economic weakness.
CSX Corp. reported Tuesday that its first-quarter earnings dropped 30 percent. The railroad transports everything from cars to toys, and its performance - like that of its competitors - is considered an indicator of the nation's overall economic health.
CSX has furloughed about 2,300 employees in the past year, but executives said that more "rightsizing" will be needed as business slows further. At the end of March, CSX had about 30,000 employees.
CSX cut 9 percent of its rail yard crews and 13 percent of its local crews, the workers that connect trains for customers, in the first quarter.
The railroad expects sales in nine of its 10 business segments to fall in the April-to-June period compared with the same time last year. Shipments of agricultural products should not lose ground year-over-year, CSX said.
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