CSX'S CAPEX STRATEGY

In an interview, CSX president and CEO Michael Ward discussed how the capex program starts with the customer. Ward said that they've been spending consistently on the track structure -- some $700 million-to-$800 million a year -- as their volumes grow because having good track makes a huge difference in the service you can provide. It's a fact of life in the railroad business that failures on one place cascade down through the system to cause service failures elsewhere. They have more reliable power, nearly eliminating line-of-road failures. They're getting a handle on equipment failures, starting with an aggressive wheel-replacement program. Running to Plan gives the customers what they want: be here when you say you'll be here and tell them if you can't. You may recall the big push they had for their Total Service Integration plan for the intermodal and unit trains. They wanted to get to the ideal train configuration -- power, OD pairs, crews, track time and so on.