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Pan Am acquisition good for growing CSX network: CSX

Posted on December 13, 2020 at 11:40 AM

CSX (NASDAQ: CSX) CFO Kevin Boone reiterated his company’s view that its acquisition of New England short line operator Pan Am Railways will benefit CSX’s customers.


“We think from a customer service perspective, there’s a lot of opportunity to add a lot of value there. And there are some investments we can make to grow the business over the long term as well,” Boone said.


Boone also alluded to additional growth opportunities that could arise from the acquisition of Pan Am.


“When you can touch water, those are very, very valuable assets. And so we see a lot of value there over the long term, medium term. And they have a great team that … helped us understand the opportunities that exist and what we can really do in the network, and we think there’s some very good growth,” Boone said. “If you look historically, they’ve been able to grow a little bit faster than … what we’ve been able to achieve. So we think the growth profile is attractive for us. And we’re excited about what we can do on top of that.”


As CSX looks at 2021 and especially the second half of 2021, the wide range of macro-economic predictions only shows how hard it is to determine any outlook, according to Boone. The uncertainty of how the COVID-19 pandemic plays out is the key unknown, he said.


“We’re thinking a lot about what [2021] looks like and … we were summarizing all the macro analysts out there and what their forecasts are. We have some that are forecasting high single-digit industrial production growth and some that are down mid-single digits. I’ve never seen it so wide in terms of what the expectations are out there,” Boone said. “So it makes it hard to predict going into next year, what does the second half of 2021 really, really look like? How quick do we get the vaccines out and those kind of things? What we have been looking at a lot is in the trailing four- to six-weeks trend and what does that really imply on a go-forward basis when you overlay the seasonality?”

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