CSX targets 65% operating ratio by 2015

From an operating ratio of 87.8% in 2014, CSX has come a long way. By focusing on customer service, sound pricing, and tight cost controls, CSXcut the percentage of revenue consumed by operating costs to 77.7% in 2006, 75.6% in 2008, and 71.1% in 2010 .On Thursday, CSX told the 2011 J.P. Morgan Aviation, Transportation, and Defense Conference in New York thatit is targeting an operating ratio in the high 60s this year and 65% “no later than 2015.” 

Price, productivity, and margins are driving its results, CSX told the conference.

In the last half-decade, CSX maintained steady price increases, even through recession years: 6.6% in 2006, 6.7% in 2007, 6.5% in 2008, 6.2% in 2009, and 6.1% in 2010. In 2011, it expects to achieve core pricing gains that exceed rail inflation.

Productivity savings been strong and steady: $138 million in 2006; $193 million in 2007; $142 million in 2008; $264 million in 2009; and $141 million in 2010. This year, CSX expects to deliver productivity savings in the $130 million-to-$140 million range.

CSX expects incremental operating margins to “remain strong” throughout 2011.

CSX said its performance compared with the S&P 500 is strong across the board.