Margin Outlook and Headwinds
Q: How will headwinds affect margins in Q4?
A: Significant headwinds from fuel and coal, about $100 million in operating income, plus $50 million impact from the hurricane, will make it challenging to grow operating income and margins in Q4. Margins will be worse than normal seasonality due to these factors and softer auto and metals demand.

Impact of Labor Agreements on Costs
Q: Why did you agree to a 5-year labor deal early?
A: Early agreement avoids past issues of delayed negotiations and builds better labor relations. The deal includes 4% wage increase next year, decreasing to 3% in the fifth year, and allows focus on efficiency, safety, and addressing employee needs beyond wages and benefits.

Pricing Power and Customers
Q: Can you maintain a positive price-cost spread next year?
A: The price-cost spread has been positive all year, as strong as in the last decade. Wage inflation is expected to be less than 4%, with overall inflation around 2–3%. Positive customer discussions focus on delivering improved service to support pricing.

Volume Growth Opportunities
Q: What are your plans for volume growth and truck conversions?
A: Successfully converting truck volumes in the merchandise franchise despite a down trucking market. Opportunities are emerging across all areas, and improved service and efficiency are attracting new business by providing value beyond price.

Export Coal Demand Stability
Q: How stable is export coal demand going forward?
A: Expecting more price stability due to a lack of new supply entering the market. Optimistic about the metallurgical coal business as supply constraints create a healthier environment, with recent China stimulus contributing to demand.

Intermodal Business and Trucking Market
Q: What's the outlook for domestic intermodal amid trucking shifts?
A: Seeing signs of bottoming in domestic intermodal, giving hope we've reached the low point. Anticipating a more normalized peak season, and a tighter trucking market could offer opportunities to convert more volume at better rates. ,

Industrial Project Sensitivity
Q: Are industrial projects sensitive to economic cycles?
A: Economic cycles can impact timing, but many projects have significant capital already invested and are proceeding. Some may slip by 3–6 months, but confidence is high given the substantial investments in larger projects underway.

Competitor Dynamics and Market Share
Q: Is competitor service improvement affecting your business?
A: Competing effectively due to stable leadership and enhanced service. Focused on retaining business and expanding the market, confident in ability to win competitively, and aiming to grow alongside customers.

Employee Retention and Culture Impact
Q: How are culture investments affecting employee retention?
A: Employee Net Promoter Scores have improved significantly over the past two years, though there's more to do. Cultural efforts are leading to better retention, reduced attrition, and improved customer service, reflected in our best customer Net Promoter scores ever.

Impact of Diverted Volumes Due to Labor Talks
Q: How did port labor issues affect your volumes?
A: Experienced modest impact from shipments shifting to the West Coast amid East Coast labor uncertainties. Some lost days from port shutdowns, but minimal disruption overall, and we expect to recover volumes through the rest of the quarter. ,