1 00:00:07,960 --> 00:00:11,040 Speaker 1: Hi everyone, this is Lee Clasgow when We're Talking Transports. 2 00:00:11,160 --> 00:00:15,040 Speaker 1: Welcome to the Bloomberg Intelligence Talking Transports podcast. I'm your host, 3 00:00:15,160 --> 00:00:19,840 Speaker 1: Lee Clasgow, senior Freight, transportation and logistics analysts at Bloomberg Intelligence, 4 00:00:19,840 --> 00:00:22,639 Speaker 1: Bloomberg's and house research of almost five hundred analysts and 5 00:00:22,680 --> 00:00:26,320 Speaker 1: strategists around the world. Before diving in a little public 6 00:00:26,360 --> 00:00:29,600 Speaker 1: service announcement, Your support is instrumental to keep bringing great 7 00:00:29,640 --> 00:00:32,959 Speaker 1: guests and conversations to you, our listeners, and we need 8 00:00:33,000 --> 00:00:36,680 Speaker 1: your support. So please, if you enjoy this podcast, share it, 9 00:00:36,880 --> 00:00:38,839 Speaker 1: like it, and leave a comment. Also, if you have 10 00:00:38,840 --> 00:00:41,840 Speaker 1: any ideas for future episodes, or just want to talk transports, 11 00:00:42,080 --> 00:00:45,320 Speaker 1: please hit me up on the Bloomberg terminal, on LinkedIn 12 00:00:45,680 --> 00:00:49,280 Speaker 1: or on Twitter at Logistics Lee. Now onto our episode. 13 00:00:49,479 --> 00:00:52,120 Speaker 1: I'm very excited to have Michael Miller with us today, 14 00:00:52,159 --> 00:00:54,920 Speaker 1: the CEO of Genesee and Wyoming, a role is hell 15 00:00:55,040 --> 00:00:58,520 Speaker 1: since twenty twenty three. His fifteen year tenure at the 16 00:00:58,520 --> 00:01:03,120 Speaker 1: company also includes role as President of Genesee Wyoming North America, 17 00:01:03,360 --> 00:01:08,480 Speaker 1: overseeing both commercial and operating functions, and Chief Commercial Officer 18 00:01:08,560 --> 00:01:12,480 Speaker 1: of North America, responsible for all commercial functions. Prior to that, 19 00:01:13,000 --> 00:01:17,520 Speaker 1: Michael managed Norfolk Southern's Moralistic supply chain organization and was 20 00:01:17,640 --> 00:01:23,080 Speaker 1: VP of Strategic Development Adruvian and held numerous logistics related 21 00:01:23,120 --> 00:01:28,520 Speaker 1: positions with both Georgia Pacific and Roadway Express. Michael currently 22 00:01:28,560 --> 00:01:32,039 Speaker 1: serves on the board of Directors for the Association of 23 00:01:32,240 --> 00:01:37,679 Speaker 1: American Railroads and Cargo Maddic. Welcome to Talking Transports, Michael, 24 00:01:37,720 --> 00:01:38,479 Speaker 1: Thanks for being here. 25 00:01:38,920 --> 00:01:40,000 Speaker 2: Thanks Lee, good morning. 26 00:01:40,400 --> 00:01:44,039 Speaker 1: So your story is a little different because most people, 27 00:01:44,040 --> 00:01:46,759 Speaker 1: when I think of railroads, think of the large class ones. 28 00:01:47,160 --> 00:01:50,040 Speaker 1: Gennesee Wyoming is not one of those. Can you talk 29 00:01:50,080 --> 00:01:53,120 Speaker 1: about you know, what is Genesee Wyoming? 30 00:01:53,160 --> 00:01:55,840 Speaker 2: What do you do? And just go a little brief 31 00:01:55,880 --> 00:01:56,720 Speaker 2: history of the company. 32 00:01:57,360 --> 00:02:01,280 Speaker 3: Sure, So for those that don't know NESC Woming, it's 33 00:02:01,320 --> 00:02:03,800 Speaker 3: actually a very historic company. 34 00:02:03,840 --> 00:02:05,800 Speaker 2: It dates back to eighteen ninety nine. 35 00:02:06,080 --> 00:02:09,040 Speaker 3: We actually celebrated our one hundred and twenty fifth anniversary 36 00:02:09,160 --> 00:02:12,720 Speaker 3: last year, and believe it or not, we still operate 37 00:02:12,800 --> 00:02:18,320 Speaker 3: the original fourteen mile railroad that served a predecessor of 38 00:02:18,440 --> 00:02:21,960 Speaker 3: gnw's first customer just outside of Rochester, New York. 39 00:02:23,400 --> 00:02:25,160 Speaker 2: You know, as the. 40 00:02:25,080 --> 00:02:28,040 Speaker 3: History of this company was built off serving that one customer. 41 00:02:28,160 --> 00:02:31,120 Speaker 3: That's really what makes short lines who they are today. 42 00:02:31,160 --> 00:02:35,320 Speaker 3: It's typically first mile last miles serving customers and connecting 43 00:02:35,360 --> 00:02:39,200 Speaker 3: to the North American freight network. G ANDW has grown 44 00:02:39,240 --> 00:02:43,079 Speaker 3: a lot since eighteen ninety nine. We've made a lot 45 00:02:43,080 --> 00:02:46,520 Speaker 3: of acquisitions over that time, really most of those acquisitions 46 00:02:46,560 --> 00:02:51,520 Speaker 3: occurring over the last forty years. And GNW has one 47 00:02:51,600 --> 00:02:55,000 Speaker 3: hundred and ten railroads, thirteen thousand track miles that extend 48 00:02:55,040 --> 00:02:59,399 Speaker 3: across forty one states in five Canadian provinces. So that's 49 00:02:59,440 --> 00:03:01,800 Speaker 3: a little bit of about who GNW is and the 50 00:03:01,840 --> 00:03:02,760 Speaker 3: history of the company. 51 00:03:03,400 --> 00:03:03,600 Speaker 2: Right. 52 00:03:03,800 --> 00:03:06,519 Speaker 1: And you're a private organization now used to be a 53 00:03:06,560 --> 00:03:07,720 Speaker 1: public company. 54 00:03:07,919 --> 00:03:09,160 Speaker 2: You're owned by private equity. 55 00:03:09,840 --> 00:03:13,200 Speaker 3: We are we're owned by Brookfield Infrastructure and g C. 56 00:03:14,880 --> 00:03:19,880 Speaker 3: You know that the acquisition of GMW curtain twenty nineteen, 57 00:03:20,440 --> 00:03:24,280 Speaker 3: and it's actually been a really nice transition moving from 58 00:03:24,280 --> 00:03:28,400 Speaker 3: the public market to the private ownership, particularly for an 59 00:03:28,440 --> 00:03:32,440 Speaker 3: asset class that is really long lived assets. You know, 60 00:03:32,520 --> 00:03:36,200 Speaker 3: during COVID, as an example, we made investments and a 61 00:03:36,200 --> 00:03:39,000 Speaker 3: lot of new locomotives to help upgrade our locomotive fleet 62 00:03:39,000 --> 00:03:40,600 Speaker 3: that would have been very difficult to do as a 63 00:03:40,600 --> 00:03:44,400 Speaker 3: public company during COVID, and you know, we actually got 64 00:03:44,400 --> 00:03:47,040 Speaker 3: really good deals on those assets because people were looking 65 00:03:47,080 --> 00:03:50,920 Speaker 3: to monetize those during a down market. So things like 66 00:03:51,000 --> 00:03:54,560 Speaker 3: that really make being a privately held company a good 67 00:03:54,600 --> 00:03:57,400 Speaker 3: opportunity for assets like railroads. 68 00:03:58,000 --> 00:04:01,320 Speaker 2: Okay, great, so you mentioned short line. Can you just 69 00:04:01,560 --> 00:04:05,600 Speaker 2: talk briefly what a short line is relative to a 70 00:04:05,640 --> 00:04:08,800 Speaker 2: regional and a Class one. Yeah. 71 00:04:08,840 --> 00:04:12,560 Speaker 3: So when you think about short line railroads, think about 72 00:04:13,000 --> 00:04:17,120 Speaker 3: a regional airline carrier, or an Amazon delivery truck or 73 00:04:17,320 --> 00:04:20,520 Speaker 3: ups the brown bands that delivery ups. You know, it's 74 00:04:20,920 --> 00:04:24,400 Speaker 3: it's going basically from major hubs to this, you know, 75 00:04:24,600 --> 00:04:29,080 Speaker 3: the small markets into those local customers, and the Class 76 00:04:29,120 --> 00:04:32,240 Speaker 3: one railroads are actually moving from major city to major 77 00:04:32,279 --> 00:04:35,520 Speaker 3: city long haul carriers. You know, when I think about 78 00:04:35,560 --> 00:04:39,359 Speaker 3: it from a delta, you know, regional airline standpoint, you 79 00:04:39,360 --> 00:04:42,480 Speaker 3: think about the regional commuter jets, that's what a short 80 00:04:42,520 --> 00:04:45,320 Speaker 3: line is. And you look at the big you know, 81 00:04:45,560 --> 00:04:48,840 Speaker 3: seven fifty seven seven seven sevens, you. 82 00:04:48,800 --> 00:04:50,160 Speaker 2: Know, those are what the class ones are. 83 00:04:50,160 --> 00:04:53,200 Speaker 3: They're moving a lot of volume across high density lanes, 84 00:04:53,200 --> 00:04:57,440 Speaker 3: and we're actually moving smaller volumes into those local service markets. 85 00:04:57,480 --> 00:04:59,839 Speaker 2: And that's really what a short line is. 86 00:04:59,839 --> 00:05:06,000 Speaker 3: Mean up up typically lower density, higher touch, and you 87 00:05:06,040 --> 00:05:08,720 Speaker 3: know that allows us to operate not a network, but 88 00:05:08,960 --> 00:05:13,200 Speaker 3: really a customized service for those local customers. And that's 89 00:05:13,240 --> 00:05:16,919 Speaker 3: that's really what differentiates a short line from the larger, 90 00:05:17,279 --> 00:05:18,320 Speaker 3: larger class ones. 91 00:05:18,560 --> 00:05:21,040 Speaker 1: And from what I understand, you know, all those class 92 00:05:21,040 --> 00:05:23,080 Speaker 1: ones are all partners of yours. 93 00:05:23,360 --> 00:05:25,880 Speaker 2: You do you touch all them? Mostly? 94 00:05:26,560 --> 00:05:28,920 Speaker 1: You you interact with csx U, N P and R 95 00:05:28,920 --> 00:05:32,800 Speaker 1: for Southern, But have you know relationships and activity with 96 00:05:32,960 --> 00:05:36,880 Speaker 1: all the class ones? So who owns the customer? When 97 00:05:36,880 --> 00:05:40,640 Speaker 1: you're working with the class one? Does the short line 98 00:05:40,720 --> 00:05:43,120 Speaker 1: like a Genesee wyoming on the customer or is it 99 00:05:43,160 --> 00:05:43,960 Speaker 1: the class one? 100 00:05:44,560 --> 00:05:47,640 Speaker 3: Well, I would say we both own the customer. You know, 101 00:05:47,720 --> 00:05:51,280 Speaker 3: we sell an interline service product. It's an integrated service. 102 00:05:51,320 --> 00:05:53,000 Speaker 3: Our customers don't really care how. 103 00:05:52,920 --> 00:05:53,599 Speaker 2: Good we do. 104 00:05:53,720 --> 00:05:57,120 Speaker 3: They care about how good the interline service product is. 105 00:05:58,640 --> 00:06:01,159 Speaker 3: In many cases, i'd say the short line is closer 106 00:06:01,200 --> 00:06:05,680 Speaker 3: to the customer since we operate locally, particularly the local plants, 107 00:06:07,040 --> 00:06:10,080 Speaker 3: so we have more day to day interactions with them. 108 00:06:10,720 --> 00:06:12,880 Speaker 3: But with all that being said, I would say the 109 00:06:12,880 --> 00:06:16,760 Speaker 3: customer makes the ultimate decision. Who owns the relationship? I think, 110 00:06:16,800 --> 00:06:19,200 Speaker 3: getting the words of Sam Walton, the only boss is 111 00:06:19,560 --> 00:06:22,440 Speaker 3: the customer and they can fire everybody from the CEO 112 00:06:22,600 --> 00:06:26,680 Speaker 3: down to the frontline operator, right. And I think for 113 00:06:26,880 --> 00:06:29,280 Speaker 3: us as an industry to excel, we have to think 114 00:06:29,320 --> 00:06:33,039 Speaker 3: about how do we offer that integrated service product and 115 00:06:33,120 --> 00:06:35,640 Speaker 3: make it easier for our customers to do business with 116 00:06:35,720 --> 00:06:39,800 Speaker 3: the railroad. So I think fragmenting that relationship makes it harder. 117 00:06:40,640 --> 00:06:43,440 Speaker 3: Integrating it and giving it to the customer the easier 118 00:06:43,440 --> 00:06:46,160 Speaker 3: to serve kind of service product makes it easier. 119 00:06:46,160 --> 00:06:48,080 Speaker 2: And that's that's where we focus at. 120 00:06:48,240 --> 00:06:51,000 Speaker 3: It's not about trying to say who owns the customer. 121 00:06:51,360 --> 00:06:53,200 Speaker 3: We both own the customer, and our job is to 122 00:06:53,200 --> 00:06:56,080 Speaker 3: provide the best service product to that customer we possibly can't. 123 00:06:56,080 --> 00:06:59,720 Speaker 1: Speaking of service, you know, services is a key, you know, 124 00:07:00,160 --> 00:07:04,800 Speaker 1: working with your rail partners. How has service been over 125 00:07:04,839 --> 00:07:07,360 Speaker 1: the last couple of years and or the last couple 126 00:07:07,360 --> 00:07:07,640 Speaker 1: of months? 127 00:07:07,640 --> 00:07:09,720 Speaker 2: Should say yeah, I would. 128 00:07:09,520 --> 00:07:14,000 Speaker 3: Say overall, the North American rail network is operating relatively well, 129 00:07:15,720 --> 00:07:19,120 Speaker 3: but there is always some localized or episodic issues. This 130 00:07:19,200 --> 00:07:22,880 Speaker 3: is an outdoor sport, so there's always things that pop up, 131 00:07:23,400 --> 00:07:25,960 Speaker 3: you know. With that said, I would say, note the 132 00:07:26,000 --> 00:07:30,040 Speaker 3: adverb that I use relative, right, I think our industry 133 00:07:30,120 --> 00:07:35,320 Speaker 3: measures service relative to history and I think in order 134 00:07:35,360 --> 00:07:38,320 Speaker 3: for us to move to the next level for growth, 135 00:07:38,560 --> 00:07:41,280 Speaker 3: we have to measure our service against our competition, and 136 00:07:41,360 --> 00:07:45,240 Speaker 3: not just on speed or reliability, but also on the 137 00:07:45,320 --> 00:07:49,840 Speaker 3: overall service experience. I would know, you know, there's a 138 00:07:49,840 --> 00:07:52,559 Speaker 3: few Class Ones that have created this first mile last 139 00:07:52,600 --> 00:07:57,880 Speaker 3: mile programs that has really been beneficial to address. You know, 140 00:07:57,920 --> 00:08:01,239 Speaker 3: I would say short line service issuance with Class Ones, 141 00:08:02,040 --> 00:08:05,000 Speaker 3: and that has actually helped improve the service product we 142 00:08:05,040 --> 00:08:08,200 Speaker 3: get delivered our customers. So, you know, i'd say overall, 143 00:08:08,240 --> 00:08:11,120 Speaker 3: it's better than it has been over the last several years. 144 00:08:12,640 --> 00:08:15,600 Speaker 3: And I feel good about where we're headed as an industry. 145 00:08:15,640 --> 00:08:18,880 Speaker 3: I think that every railroad's invested a lot in infrastructure, 146 00:08:19,440 --> 00:08:23,560 Speaker 3: every railroad's kind of went through PSR and optimized their business, 147 00:08:23,560 --> 00:08:27,120 Speaker 3: and they're operating relatively well. And almost every railroad we 148 00:08:27,160 --> 00:08:29,560 Speaker 3: talk to has pivoted to really focusing on how do 149 00:08:29,560 --> 00:08:32,440 Speaker 3: they grow the business. So with that, I feel pretty 150 00:08:32,480 --> 00:08:34,200 Speaker 3: good about where the industry is right now. 151 00:08:35,000 --> 00:08:38,400 Speaker 2: All right, Well, speaking of growth, how is demand on 152 00:08:38,440 --> 00:08:39,000 Speaker 2: your network? 153 00:08:40,920 --> 00:08:45,040 Speaker 3: You know, I would say it's it's okay, it's not great. 154 00:08:45,240 --> 00:08:47,559 Speaker 3: I think we came into twenty twenty five thinking we 155 00:08:47,600 --> 00:08:51,480 Speaker 3: would see a pretty strong market in twenty twenty five. 156 00:08:52,000 --> 00:08:54,520 Speaker 3: You know, we've been kind of in this freight recession 157 00:08:54,600 --> 00:08:58,959 Speaker 3: for a bit now, particularly in the trucking side, and 158 00:08:59,000 --> 00:09:00,839 Speaker 3: it's just been kind of a okay. You know, the 159 00:09:01,160 --> 00:09:03,800 Speaker 3: year started off slow with a lot of weather challenges, 160 00:09:03,880 --> 00:09:06,840 Speaker 3: particularly for us, and then you've had a lot of 161 00:09:06,920 --> 00:09:11,000 Speaker 3: uncertainty around the tariffs, which is slow down decision making 162 00:09:11,040 --> 00:09:15,080 Speaker 3: for our customers, and because of that, I think we've 163 00:09:15,120 --> 00:09:20,440 Speaker 3: just kind of seen just steady state. Hopefully we'll see, 164 00:09:20,840 --> 00:09:23,040 Speaker 3: you know, the market kind of firm up once tariff 165 00:09:23,080 --> 00:09:26,280 Speaker 3: stuff kind of works its way through, and hopefully we'll 166 00:09:26,280 --> 00:09:30,239 Speaker 3: start to see some additional industries pick up some investments 167 00:09:30,640 --> 00:09:32,679 Speaker 3: and we'll see where it goes. But I'd say it's 168 00:09:32,720 --> 00:09:36,520 Speaker 3: just been kind of okay, and in this uncertain market conditions, 169 00:09:36,559 --> 00:09:39,120 Speaker 3: I don't see anything changing really in the short term, 170 00:09:39,240 --> 00:09:39,400 Speaker 3: you know. 171 00:09:39,440 --> 00:09:41,559 Speaker 2: I think we'll probably work through that through the rest 172 00:09:41,600 --> 00:09:44,560 Speaker 2: of this year. So it's Tennessee Wyoming, you know. 173 00:09:44,600 --> 00:09:49,320 Speaker 1: I know, historically, you know, you've grown through acquisitions and 174 00:09:49,440 --> 00:09:52,240 Speaker 1: have done a lot of them over the years. Today, 175 00:09:52,640 --> 00:09:55,200 Speaker 1: is the majority of your growth organic or is it 176 00:09:55,200 --> 00:09:56,760 Speaker 1: continued to be through acquisitions? 177 00:09:57,240 --> 00:10:00,680 Speaker 3: No, I would say we have since we were acquired 178 00:10:00,720 --> 00:10:05,120 Speaker 3: and became private company, we've really spent a lot of time, energy, 179 00:10:05,160 --> 00:10:09,240 Speaker 3: and effort focused on organic growth. Obviously, organic growth is 180 00:10:09,280 --> 00:10:13,080 Speaker 3: critical to any business, and we have intently focused on 181 00:10:13,120 --> 00:10:15,520 Speaker 3: that over the last few years, really just because the 182 00:10:15,600 --> 00:10:18,120 Speaker 3: M and A market has been more challenging and more competitive. 183 00:10:19,440 --> 00:10:22,680 Speaker 3: You know, as you noted, GMW has been built on 184 00:10:22,800 --> 00:10:27,920 Speaker 3: opportunistic M and A a strategy over the past forty years. 185 00:10:28,400 --> 00:10:31,240 Speaker 3: And we'll always look at acquisition targets, but they need 186 00:10:31,280 --> 00:10:34,440 Speaker 3: to be a creative to the business. And you know, 187 00:10:34,520 --> 00:10:39,480 Speaker 3: with with our acquisition, with the CACS acquisition and the 188 00:10:39,600 --> 00:10:43,400 Speaker 3: limited nature of rail assets, it's a very competitive market 189 00:10:43,480 --> 00:10:46,880 Speaker 3: and people want to own rail rail assets. So you know, 190 00:10:46,920 --> 00:10:49,160 Speaker 3: we're not going to stretch ourselves to make an acquisition. 191 00:10:49,280 --> 00:10:54,679 Speaker 3: We're going to continue to invest in our organic growth strategy, 192 00:10:54,720 --> 00:10:59,640 Speaker 3: which is really track capacity, new rail cars, new locomotives technology. 193 00:11:00,400 --> 00:11:02,920 Speaker 3: But when there's a good opportunity to make up make 194 00:11:02,960 --> 00:11:06,600 Speaker 3: an acquisition, it's a good strategic fit, it's a good price, 195 00:11:06,679 --> 00:11:09,400 Speaker 3: and it's a creative you know, we're always looking, but 196 00:11:09,480 --> 00:11:11,800 Speaker 3: I would say right now our focus has been primarily 197 00:11:11,840 --> 00:11:13,120 Speaker 3: on organic growth. 198 00:11:14,040 --> 00:11:17,240 Speaker 1: And then you know, some CEOs on the Class One 199 00:11:17,280 --> 00:11:21,800 Speaker 1: have been talking about or been asked about consolidation, you know, 200 00:11:21,840 --> 00:11:26,200 Speaker 1: speaking of mergers within within the rail industry. Obviously after 201 00:11:26,240 --> 00:11:29,920 Speaker 1: the CP Kansas City merger, it's going to. 202 00:11:29,960 --> 00:11:31,079 Speaker 2: Be a lot tougher. 203 00:11:31,600 --> 00:11:34,199 Speaker 1: What are your thoughts of on consolidation. Is it good 204 00:11:34,280 --> 00:11:36,560 Speaker 1: for the industry? Is it good for Gendesee and Wyoming? 205 00:11:37,200 --> 00:11:42,600 Speaker 3: Yeah, I would say overall, I'm a little bit I 206 00:11:42,640 --> 00:11:43,840 Speaker 3: have mixed thoughts on it. 207 00:11:45,000 --> 00:11:45,200 Speaker 2: You know. 208 00:11:45,240 --> 00:11:47,920 Speaker 3: I think in a perfect world, it could yield a 209 00:11:47,960 --> 00:11:52,040 Speaker 3: better service product, and it obviously can con create some 210 00:11:52,160 --> 00:11:59,640 Speaker 3: operationally colls advantages, but it does potentially limit competition. As 211 00:11:59,679 --> 00:12:03,160 Speaker 3: I say earlier, this is a you know, this is 212 00:12:03,200 --> 00:12:08,080 Speaker 3: an ecosystem environment. We all are interconnected, and in order 213 00:12:08,120 --> 00:12:11,360 Speaker 3: for an ecosystem to thrive, everybody has to have share 214 00:12:11,520 --> 00:12:16,160 Speaker 3: values inside of that ecosystem. And obviously the fewer players 215 00:12:16,160 --> 00:12:18,319 Speaker 3: you have an ecosystem, the better chance you have of 216 00:12:18,400 --> 00:12:21,839 Speaker 3: people collaborating, working together. So I think with an acquisition, 217 00:12:21,880 --> 00:12:26,680 Speaker 3: it kind of reduces those competitive tensions and probably creates 218 00:12:26,720 --> 00:12:31,120 Speaker 3: a little more competition, a little more of a seamless 219 00:12:31,160 --> 00:12:33,920 Speaker 3: product to our customers. So I think there's going to 220 00:12:34,000 --> 00:12:36,320 Speaker 3: be service advantages, but I'm not so sure it'd be 221 00:12:36,360 --> 00:12:41,600 Speaker 3: competitive advantages for our customers with that set selfishly, it's 222 00:12:41,600 --> 00:12:46,040 Speaker 3: probably creates opportunities for short lines. Obviously, as people integrate 223 00:12:46,120 --> 00:12:50,280 Speaker 3: and put businesses together, there'll be assets that they just 224 00:12:50,280 --> 00:12:52,920 Speaker 3: don't fit the integrated network, and that may be things 225 00:12:52,960 --> 00:12:55,840 Speaker 3: they want to short line. And obviously when you go 226 00:12:55,960 --> 00:13:01,439 Speaker 3: through these complicated major transactions, there's an opportunity to kind 227 00:13:01,440 --> 00:13:04,400 Speaker 3: of chime in for things with the STB or as 228 00:13:04,440 --> 00:13:07,120 Speaker 3: you go through the regulatory review process, and that may 229 00:13:07,160 --> 00:13:10,319 Speaker 3: create opportunities for short line as well. So I'd say 230 00:13:10,360 --> 00:13:14,439 Speaker 3: I have mixed emotions on it, but I do think 231 00:13:15,160 --> 00:13:19,120 Speaker 3: the more integrated service product we can create in this ecosystem, 232 00:13:19,240 --> 00:13:22,880 Speaker 3: the better chance we have to compete with our competitors 233 00:13:23,200 --> 00:13:25,520 Speaker 3: and provide a better service product for our customers. 234 00:13:26,440 --> 00:13:29,000 Speaker 1: Got ya, And you know you were talking about you know, 235 00:13:29,240 --> 00:13:32,360 Speaker 1: as a private company, you really focus on organic growth. 236 00:13:32,559 --> 00:13:36,280 Speaker 1: So outside of your your your customers just producing more 237 00:13:36,320 --> 00:13:39,600 Speaker 1: widgets or whatever it is that they do, how do 238 00:13:39,640 --> 00:13:43,040 Speaker 1: you grow? Is it through industrial development? Are you very 239 00:13:43,040 --> 00:13:45,240 Speaker 1: active in like in that? Like the class ones are? 240 00:13:45,880 --> 00:13:50,040 Speaker 3: We we are and we've we've actually been very successful 241 00:13:50,120 --> 00:13:53,280 Speaker 3: over the last several years. On the industrial development side, 242 00:13:53,320 --> 00:13:56,280 Speaker 3: we've we've taken concerted effort over the last i'd say 243 00:13:56,320 --> 00:13:59,080 Speaker 3: five or six years and invest it in, you know, 244 00:13:59,160 --> 00:14:01,760 Speaker 3: really getting out front of customers, getting out front of 245 00:14:01,840 --> 00:14:07,719 Speaker 3: economic development agencies, getting out front of utilities, site selection consultants, 246 00:14:08,000 --> 00:14:10,520 Speaker 3: and you know, short lines have a unique offering in 247 00:14:10,600 --> 00:14:13,440 Speaker 3: that you know, if they locate a customer on them, 248 00:14:13,760 --> 00:14:16,680 Speaker 3: potentially the customer has the ability to connect a multiple 249 00:14:16,679 --> 00:14:20,640 Speaker 3: Class one railroad. So it creates more competitive options for 250 00:14:20,760 --> 00:14:23,880 Speaker 3: our customers. And when you look at some of our 251 00:14:23,960 --> 00:14:28,480 Speaker 3: largest growth opportunities over the last two three four years, 252 00:14:29,000 --> 00:14:31,840 Speaker 3: you know, we landed the new Hondai facility in Georgia 253 00:14:32,920 --> 00:14:36,480 Speaker 3: and that's an autopponent plant that it's the largest one 254 00:14:36,480 --> 00:14:39,280 Speaker 3: that Hondi will be building. It's a metaplant, you know, 255 00:14:39,320 --> 00:14:41,600 Speaker 3: we connect to both n S and CSX there and 256 00:14:41,680 --> 00:14:46,920 Speaker 3: create options for that customer. We just are working with 257 00:14:47,000 --> 00:14:51,920 Speaker 3: a GP to develop a new expanded export facility out 258 00:14:51,960 --> 00:14:54,760 Speaker 3: of the Pacific Northwest and that'll double the capacity. And 259 00:14:54,800 --> 00:14:58,320 Speaker 3: that facility is served by US the Puget Sound and 260 00:14:58,360 --> 00:15:00,920 Speaker 3: Pacific Railroad, but it connects the the being and up 261 00:15:02,040 --> 00:15:06,080 Speaker 3: serving a GPS facilities in the Midwest and so that 262 00:15:06,160 --> 00:15:08,600 Speaker 3: creates options for them, and then you look at you know, 263 00:15:08,640 --> 00:15:11,200 Speaker 3: another growth area for US has been the waste industry 264 00:15:12,280 --> 00:15:17,480 Speaker 3: with landfills, you know, reaching capacity, particularly in metropolitan New 265 00:15:17,520 --> 00:15:20,320 Speaker 3: England Northeast market. You know, they're not going to be 266 00:15:20,360 --> 00:15:24,680 Speaker 3: new landfills building those geographies. So moving that trash further 267 00:15:25,600 --> 00:15:28,840 Speaker 3: away creates opportunities for rail. So we're seeing more growth 268 00:15:28,880 --> 00:15:31,560 Speaker 3: in our waste business as we move more and more 269 00:15:31,880 --> 00:15:36,320 Speaker 3: trash and waste with rail solutions going to landfills on 270 00:15:36,360 --> 00:15:36,960 Speaker 3: T ANDW. 271 00:15:37,080 --> 00:15:38,960 Speaker 2: So we are we. 272 00:15:38,880 --> 00:15:42,280 Speaker 3: Are out there selling the site, selling the service, selling 273 00:15:42,320 --> 00:15:45,600 Speaker 3: the dual connectivity, and it's actually probably been one of 274 00:15:45,680 --> 00:15:48,960 Speaker 3: our biggest success stories. When you look at our opportunity pipeline, 275 00:15:49,000 --> 00:15:51,640 Speaker 3: it's as robust as it has been in our history. 276 00:15:52,920 --> 00:15:55,120 Speaker 3: And some of that's just based upon our hustle. Some 277 00:15:55,160 --> 00:15:58,240 Speaker 3: of it's based upon you know, new companies like to 278 00:15:58,280 --> 00:16:00,800 Speaker 3: follow other companies when they locate eight and you know, 279 00:16:00,880 --> 00:16:04,560 Speaker 3: the more success you have as a rail service provider 280 00:16:04,720 --> 00:16:08,600 Speaker 3: landing industries, it's kind of deal momentum here when you 281 00:16:08,640 --> 00:16:11,000 Speaker 3: know we land one company, another company says, well they 282 00:16:11,080 --> 00:16:12,240 Speaker 3: must have a good service offering. 283 00:16:12,320 --> 00:16:13,240 Speaker 2: Let's go talk to them. 284 00:16:13,880 --> 00:16:16,680 Speaker 3: So we're seeing some of that deal momentum flow through 285 00:16:16,680 --> 00:16:19,080 Speaker 3: our id efforts and that's that's a good news store 286 00:16:19,120 --> 00:16:20,760 Speaker 3: for us over the long term. 287 00:16:20,960 --> 00:16:22,840 Speaker 1: Right, So, Jenessie Will, I mean, it's a little different 288 00:16:22,840 --> 00:16:25,000 Speaker 1: story than some of the Class ones because you're really 289 00:16:25,000 --> 00:16:27,560 Speaker 1: not that exposed to intermodial, at least from what I 290 00:16:27,600 --> 00:16:30,080 Speaker 1: can tell. Could you talk about, you know what the 291 00:16:30,240 --> 00:16:32,880 Speaker 1: major commodity subcategories. 292 00:16:34,320 --> 00:16:37,080 Speaker 2: Yeah, so we are not that exposed to innermotive. 293 00:16:37,120 --> 00:16:40,320 Speaker 3: We do serve a couple of ports, and we actually 294 00:16:40,680 --> 00:16:43,320 Speaker 3: developed build intermotial trains for our Class one partners, but 295 00:16:43,440 --> 00:16:45,880 Speaker 3: intermotive is a very very small piece of our business. 296 00:16:46,800 --> 00:16:49,360 Speaker 3: When you go back to the history of g ANDW, GNW, 297 00:16:49,520 --> 00:16:52,480 Speaker 3: for for many many years in their history, only had 298 00:16:52,520 --> 00:16:58,320 Speaker 3: one commodity, one customer, one geography. So there was obviously 299 00:16:58,360 --> 00:17:02,040 Speaker 3: a desire to diversify over time. And you go all 300 00:17:02,040 --> 00:17:04,600 Speaker 3: the way back to like the late nineteen nineties early 301 00:17:04,640 --> 00:17:08,240 Speaker 3: two thousands, forty fifty percent of gmw's volume was tied 302 00:17:08,280 --> 00:17:12,040 Speaker 3: to coal. Today today that's only it's less than eight 303 00:17:12,080 --> 00:17:15,879 Speaker 3: percent of our business, and we have become very diversified. 304 00:17:16,280 --> 00:17:19,399 Speaker 3: When you look across all the commodity sectors. We touch 305 00:17:19,560 --> 00:17:31,160 Speaker 3: almost every major commodity that's moved by rail, agriculture, metals, aggregates, lumber, paper, steel, chemicals, plastics, 306 00:17:31,520 --> 00:17:34,479 Speaker 3: all of those. Our largest commodity group is agriculture products, 307 00:17:34,560 --> 00:17:36,360 Speaker 3: represents about fifteen percent. 308 00:17:36,080 --> 00:17:37,320 Speaker 2: Of our overall volume. 309 00:17:38,000 --> 00:17:42,040 Speaker 3: But within that commodity group, when you look across our footprint, 310 00:17:42,160 --> 00:17:45,359 Speaker 3: you know, it's different geographies. It's the Southeast, it's the 311 00:17:45,560 --> 00:17:50,280 Speaker 3: Upper Midwest, it's the you know, the corn belt in Iowa, Indiana, 312 00:17:51,480 --> 00:17:55,880 Speaker 3: and we handle corn, soybeans, soy mill, milo, sorgum, wheat. 313 00:17:56,480 --> 00:18:00,000 Speaker 3: So we're very diversified inside of that one commodity group. 314 00:18:00,119 --> 00:18:02,960 Speaker 3: So even though it represents fifteen percent of our business, 315 00:18:03,080 --> 00:18:06,399 Speaker 3: is very diversified from a geography and a subcategory group. 316 00:18:06,480 --> 00:18:10,320 Speaker 3: So we feel very good about our commodity mix. And 317 00:18:10,320 --> 00:18:13,679 Speaker 3: that's been part of our strategy even through acquisitions, is 318 00:18:13,720 --> 00:18:16,840 Speaker 3: does this diversify our book of business to de risk 319 00:18:16,960 --> 00:18:19,679 Speaker 3: us on a long term basis, so we're not exposed 320 00:18:19,680 --> 00:18:22,960 Speaker 3: to one commodity or one geography or one customer. And 321 00:18:23,040 --> 00:18:25,680 Speaker 3: that's been part of our strategy over time is as 322 00:18:25,720 --> 00:18:29,720 Speaker 3: we acquire, as we develop, we want diversity and we 323 00:18:29,800 --> 00:18:32,560 Speaker 3: want to de risk the portfolio, so if one commodity 324 00:18:32,640 --> 00:18:35,879 Speaker 3: has a bad, bad year, it doesn't flow through an 325 00:18:35,880 --> 00:18:37,160 Speaker 3: impacted company as a whole. 326 00:18:38,000 --> 00:18:43,000 Speaker 2: Right, And speaking of diverse you know a diversified network. 327 00:18:43,440 --> 00:18:46,920 Speaker 2: Can you talk about your exposure outside of the United States. 328 00:18:48,200 --> 00:18:51,840 Speaker 3: Yes, so you know, obviously when the tearfund certainty hit, 329 00:18:52,880 --> 00:18:55,040 Speaker 3: there was a real big concern from our shareholders and 330 00:18:55,040 --> 00:18:57,360 Speaker 3: from everybody what does that mean to our book of business? 331 00:18:57,400 --> 00:19:03,320 Speaker 3: And really our cross border traffic and our international business 332 00:19:03,359 --> 00:19:07,440 Speaker 3: represents about nine percent of our overall book of business, 333 00:19:07,840 --> 00:19:10,439 Speaker 3: and inside of that nine percent, a big chunk of 334 00:19:10,480 --> 00:19:13,719 Speaker 3: that stage within say Canada as an example, we have 335 00:19:13,840 --> 00:19:19,600 Speaker 3: operations in Canada, so Canadian traffic moves inside into Canada. 336 00:19:19,720 --> 00:19:23,080 Speaker 2: We do have cross border traffic, and. 337 00:19:23,040 --> 00:19:25,080 Speaker 3: We had some concerns what that made look like on 338 00:19:25,119 --> 00:19:29,600 Speaker 3: the tariff side, but we really haven't seen any major impact. Obviously, 339 00:19:29,760 --> 00:19:35,240 Speaker 3: freight flows in the most efficient supply chains. When you 340 00:19:35,320 --> 00:19:39,359 Speaker 3: when you really unpack everything, freight will typically find the 341 00:19:39,440 --> 00:19:41,000 Speaker 3: cheapest and easiest way to move. 342 00:19:41,840 --> 00:19:42,879 Speaker 2: It's kind of like water. 343 00:19:44,280 --> 00:19:47,119 Speaker 3: And when tariffs come in and actually impact that, it 344 00:19:47,240 --> 00:19:50,199 Speaker 3: actually changes how freight is actually sourced or moved, and 345 00:19:50,240 --> 00:19:54,480 Speaker 3: that may actually create even more upside opportunity for some 346 00:19:54,600 --> 00:19:58,200 Speaker 3: of our properties. You know, a great example would be lumber, 347 00:19:58,720 --> 00:20:01,199 Speaker 3: Canadian lumber that comes across the border into the New 348 00:20:01,200 --> 00:20:04,399 Speaker 3: England market. If tariffs were actually to push some of 349 00:20:04,440 --> 00:20:08,040 Speaker 3: that lumber away and keep it north of the border, 350 00:20:08,480 --> 00:20:11,479 Speaker 3: we may actually pick up some southern yellow pine traffic 351 00:20:11,560 --> 00:20:14,200 Speaker 3: moving from the southeast going to New England to replace 352 00:20:14,280 --> 00:20:18,120 Speaker 3: that lumber. So we haven't seen a really big impact 353 00:20:18,960 --> 00:20:23,119 Speaker 3: on the tariff side of the house. And actually we 354 00:20:23,200 --> 00:20:25,560 Speaker 3: don't feel like it's going to be a net negative 355 00:20:25,560 --> 00:20:28,360 Speaker 3: for us. Kind of it's net neutral to net positive 356 00:20:28,440 --> 00:20:31,440 Speaker 3: over the long term. And you know, obviously if more 357 00:20:31,600 --> 00:20:34,640 Speaker 3: facilities move back into the US and more productions moved 358 00:20:34,640 --> 00:20:37,119 Speaker 3: into the US, that actually creates more long term value 359 00:20:37,160 --> 00:20:37,600 Speaker 3: as well. 360 00:20:37,960 --> 00:20:40,240 Speaker 2: Oh and that's that's very interesting. 361 00:20:40,440 --> 00:20:42,960 Speaker 1: So you know, so, you know you mentioned earlier, you know, 362 00:20:43,000 --> 00:20:48,479 Speaker 1: the uncertainty created by the tariffs is limiting customers spend 363 00:20:48,520 --> 00:20:51,040 Speaker 1: and investments and all that. So is that really the 364 00:20:51,040 --> 00:20:53,440 Speaker 1: only impact that you're feeling right now from tariffs, where 365 00:20:53,440 --> 00:20:56,560 Speaker 1: the actual tariffs themselves, like you said, as a neutral 366 00:20:56,600 --> 00:20:57,440 Speaker 1: to a net positive. 367 00:20:57,680 --> 00:21:00,520 Speaker 2: Yeah, it's really more of the uncertainty right now. 368 00:21:00,880 --> 00:21:03,399 Speaker 3: I mean there's obviously you know, I think you know, 369 00:21:03,400 --> 00:21:06,600 Speaker 3: if you're exposed to international intermodal, you could obviously see 370 00:21:06,600 --> 00:21:09,679 Speaker 3: some fits and starts on that for sure, But we 371 00:21:09,760 --> 00:21:12,800 Speaker 3: don't have that much exposure there. And when you look 372 00:21:12,800 --> 00:21:15,920 Speaker 3: at what we move, it's really basic materials and things 373 00:21:15,920 --> 00:21:18,800 Speaker 3: that are core to the economy. So it's really more 374 00:21:18,840 --> 00:21:22,360 Speaker 3: the uncertainty than than just the shifting patterns. I mean, 375 00:21:23,080 --> 00:21:24,840 Speaker 3: you know, we're always going to need to move grain. 376 00:21:25,320 --> 00:21:27,720 Speaker 3: The questions where does the grain move or when does 377 00:21:27,760 --> 00:21:30,919 Speaker 3: the grain move? So I think it's more the uncertainty 378 00:21:30,960 --> 00:21:33,680 Speaker 3: that's impacting us right now than anything else. 379 00:21:35,280 --> 00:21:38,760 Speaker 1: So you know, you're a large company, but interesting enough, 380 00:21:38,760 --> 00:21:41,960 Speaker 1: a lot of your networks don't touch each other. So 381 00:21:42,119 --> 00:21:44,800 Speaker 1: how does this How does your size work in your 382 00:21:44,800 --> 00:21:48,000 Speaker 1: favor because I'm assuming it's not easy to move a 383 00:21:48,000 --> 00:21:52,159 Speaker 1: locomotive that operates in the in the in the northeast, 384 00:21:52,359 --> 00:21:53,600 Speaker 1: uh to the southwest. 385 00:21:54,280 --> 00:21:55,359 Speaker 2: No, it is not. 386 00:21:56,880 --> 00:21:59,520 Speaker 3: You know, I would say our scale helps us in 387 00:21:59,560 --> 00:22:02,840 Speaker 3: a couple of areas. One, it obviously helps us relationally 388 00:22:03,720 --> 00:22:07,159 Speaker 3: with our customers and with our Class one partners. You know, 389 00:22:07,280 --> 00:22:10,600 Speaker 3: size does matter in that regard. The more touch points 390 00:22:10,600 --> 00:22:14,760 Speaker 3: we have, the more ability we have to either strengthen 391 00:22:14,960 --> 00:22:19,320 Speaker 3: or serve those customers or those partners better. Obviously, the 392 00:22:19,400 --> 00:22:26,240 Speaker 3: scale helps us from an operational standpoint, like our railcar 393 00:22:26,359 --> 00:22:30,080 Speaker 3: fleet as an example, when I talked about our agriculture business, 394 00:22:30,119 --> 00:22:34,040 Speaker 3: we have covered hoppers that support our agriculture business. You know, 395 00:22:34,160 --> 00:22:37,000 Speaker 3: if there's a drought in Kansas and we have a 396 00:22:37,040 --> 00:22:40,360 Speaker 3: fleet there and the crop is really good in South Dakota, 397 00:22:40,440 --> 00:22:42,119 Speaker 3: we can move that fleet up in the South to 398 00:22:42,560 --> 00:22:46,840 Speaker 3: CODA and utilize that asset. Other people who don't have 399 00:22:46,920 --> 00:22:50,239 Speaker 3: that geographic scale can't do things like that, So that 400 00:22:50,320 --> 00:22:53,200 Speaker 3: gives us some flexibility to move the assets around. 401 00:22:53,760 --> 00:22:54,480 Speaker 2: And then when you just. 402 00:22:54,440 --> 00:22:57,920 Speaker 3: Look at our sheer size, things like back office investments. 403 00:22:58,200 --> 00:22:59,879 Speaker 3: You know, when you think about what we can do 404 00:22:59,880 --> 00:23:02,560 Speaker 3: on the training side of the house, on the technology 405 00:23:02,640 --> 00:23:06,520 Speaker 3: side of the house, on procurement, you know, buying ties 406 00:23:06,640 --> 00:23:10,240 Speaker 3: for all of gnw's railroads versus in each independent one, 407 00:23:10,280 --> 00:23:14,520 Speaker 3: you get some procurement advantages. So scale does help us there, 408 00:23:15,600 --> 00:23:18,480 Speaker 3: but operationally it's it's really hard to leverage it because 409 00:23:18,480 --> 00:23:21,760 Speaker 3: we're not totally interconnected like a Class one network is. 410 00:23:21,960 --> 00:23:25,680 Speaker 3: But it definitely has us advantages. I would say reputational 411 00:23:25,720 --> 00:23:28,960 Speaker 3: and relational, so they advantages with customer partners. And then 412 00:23:29,600 --> 00:23:31,840 Speaker 3: the scale when you think of economies of scale on 413 00:23:32,160 --> 00:23:34,920 Speaker 3: operational efficiency things really helps us there. 414 00:23:35,600 --> 00:23:38,439 Speaker 1: So a couple of things you know, on your employees, 415 00:23:38,720 --> 00:23:42,679 Speaker 1: I'm assuming their unionized, and are they all part of 416 00:23:42,720 --> 00:23:46,280 Speaker 1: one union? And if you're a person working on a 417 00:23:46,359 --> 00:23:50,399 Speaker 1: short line in New Jersey, do they like say, like, 418 00:23:50,680 --> 00:23:53,200 Speaker 1: you know, can you move them to another short line 419 00:23:53,200 --> 00:23:56,560 Speaker 1: somewhere in the country or are they kind of they 420 00:23:56,880 --> 00:23:59,520 Speaker 1: they work for that short line and they stay with 421 00:23:59,520 --> 00:24:02,320 Speaker 1: that trial, which I was assuming is good because you 422 00:24:02,359 --> 00:24:03,360 Speaker 1: don't have a lot of turnover. 423 00:24:03,960 --> 00:24:08,000 Speaker 3: Yeah, you know, we're not one hundred percent unionized. I 424 00:24:08,040 --> 00:24:10,840 Speaker 3: would say we're kind of sixty forty union non union. 425 00:24:11,880 --> 00:24:15,560 Speaker 3: We don't operate under a national agreement. Every one of 426 00:24:15,560 --> 00:24:18,600 Speaker 3: our railroads has their own agreements that are negotiated with 427 00:24:19,000 --> 00:24:20,200 Speaker 3: the local unions there. 428 00:24:22,200 --> 00:24:25,160 Speaker 2: So we tend to like to promote from within. 429 00:24:25,280 --> 00:24:27,480 Speaker 3: So if we have an employee working on railroad that 430 00:24:27,520 --> 00:24:29,400 Speaker 3: wants to go some other place and they're a good 431 00:24:29,560 --> 00:24:31,679 Speaker 3: employee and good standing and we feel like they have 432 00:24:31,760 --> 00:24:34,560 Speaker 3: growth opportunities, we're more than happy to try to accommodate 433 00:24:34,600 --> 00:24:38,600 Speaker 3: that move. Obviously, one of the advantages of short lined 434 00:24:38,720 --> 00:24:42,200 Speaker 3: is we don't have people don't have to move. They 435 00:24:42,200 --> 00:24:44,040 Speaker 3: get to be home every night, they get to spend 436 00:24:44,040 --> 00:24:45,440 Speaker 3: time with their family, they get to. 437 00:24:45,400 --> 00:24:47,040 Speaker 2: Be in the communities they grew up in. 438 00:24:47,720 --> 00:24:50,600 Speaker 3: And we don't see people, particularly at the craft level, 439 00:24:50,680 --> 00:24:54,000 Speaker 3: wanting to move that much. So that's one of the 440 00:24:54,000 --> 00:24:57,000 Speaker 3: big advantages we try to try to leverage is the 441 00:24:57,040 --> 00:24:59,040 Speaker 3: fact that you know, our people can stay home, they 442 00:24:59,040 --> 00:25:02,280 Speaker 3: can be part of the communityity. You know, their kids 443 00:25:02,320 --> 00:25:04,400 Speaker 3: get they get to go watch their kids baseball games 444 00:25:04,400 --> 00:25:06,200 Speaker 3: and are going to be staying away in a hotel 445 00:25:06,240 --> 00:25:08,840 Speaker 3: and you know from big line hall move and those 446 00:25:08,840 --> 00:25:11,760 Speaker 3: are advantages that we try to sell and we definitely 447 00:25:11,840 --> 00:25:14,880 Speaker 3: leverage that. But you know, we're open. We definitely want 448 00:25:14,920 --> 00:25:17,359 Speaker 3: our employees to be have the ability to move if 449 00:25:17,359 --> 00:25:19,760 Speaker 3: they can, if they're good employee, well we'll work with them. 450 00:25:19,960 --> 00:25:21,800 Speaker 1: You know, not to go back to the pandemic, but 451 00:25:21,840 --> 00:25:24,199 Speaker 1: a lot of class ones kind of didn't do a 452 00:25:24,200 --> 00:25:28,560 Speaker 1: great job but managing their resources. You know, they kind 453 00:25:28,600 --> 00:25:31,920 Speaker 1: of furlough too many and demand snap back to did 454 00:25:31,960 --> 00:25:34,000 Speaker 1: you guys have any of those sort of problems? 455 00:25:34,720 --> 00:25:36,760 Speaker 3: You know, I would say this is probably one of 456 00:25:36,800 --> 00:25:39,320 Speaker 3: the things I'm very proud of, and it helped us. 457 00:25:39,320 --> 00:25:44,280 Speaker 3: Being a private company, we didn't furlough any employees during COVID, 458 00:25:44,840 --> 00:25:49,280 Speaker 3: and when the volume snapped back, we had unbelievably good 459 00:25:49,320 --> 00:25:53,320 Speaker 3: service levels, and we survey our customers, every one of 460 00:25:53,359 --> 00:25:58,360 Speaker 3: our customers every two years, and our satisfaction survey scores 461 00:25:58,680 --> 00:26:02,520 Speaker 3: in twenty twenty one were the best they've been in 462 00:26:02,520 --> 00:26:05,840 Speaker 3: our entire history. And the delta between US and other 463 00:26:05,960 --> 00:26:09,920 Speaker 3: railroads and US and the trucking industry was by far 464 00:26:10,040 --> 00:26:12,600 Speaker 3: the greatest delta that we've ever seen, and it was 465 00:26:12,640 --> 00:26:16,200 Speaker 3: because we didn't furlow people. And part of the reason 466 00:26:16,240 --> 00:26:21,159 Speaker 3: we didn't furlough people was because we felt a need 467 00:26:22,040 --> 00:26:26,280 Speaker 3: to really protect our people, and not knowing how long 468 00:26:26,320 --> 00:26:29,320 Speaker 3: COVID was going to last, we just said, look, you 469 00:26:29,359 --> 00:26:31,760 Speaker 3: know what, let's make the investment, let's keep people working. 470 00:26:31,840 --> 00:26:34,840 Speaker 3: Volumes were down twenty percent, but we wanted to make 471 00:26:34,880 --> 00:26:36,680 Speaker 3: sure we took care of our people. 472 00:26:36,640 --> 00:26:41,520 Speaker 2: And it really paid dividends for us after COVID. That's great, 473 00:26:41,680 --> 00:26:42,400 Speaker 2: that's really great. 474 00:26:42,680 --> 00:26:45,359 Speaker 1: You know you mentioned earlier PSR, and for those that 475 00:26:45,400 --> 00:26:48,680 Speaker 1: don't know psr's Precision Scheduling Railroading, it's pretty much six 476 00:26:48,680 --> 00:26:50,639 Speaker 1: sigma for the rail industry, as that we had to 477 00:26:50,680 --> 00:26:53,200 Speaker 1: operate kind of in a lean matter. 478 00:26:54,000 --> 00:26:58,960 Speaker 2: Do you guys deploy PSR Genesseee, Wyoming? I would say 479 00:26:59,000 --> 00:26:59,600 Speaker 2: we don't. 480 00:27:00,680 --> 00:27:03,679 Speaker 3: You know, each one of our operations is very independent, 481 00:27:03,720 --> 00:27:07,520 Speaker 3: so it's not a network, and we're very dependent upon 482 00:27:07,520 --> 00:27:10,760 Speaker 3: what our Class one partners do. So when you think 483 00:27:10,800 --> 00:27:17,240 Speaker 3: about PSR, it's really governed by seven service design principles. 484 00:27:17,600 --> 00:27:21,000 Speaker 3: And obviously some of those service design principles would apply 485 00:27:21,200 --> 00:27:27,440 Speaker 3: to short lines, like minimizing car dewdoil or minimizing car classifications, 486 00:27:27,480 --> 00:27:31,359 Speaker 3: handling or you know, balancing train mode things like that, 487 00:27:31,440 --> 00:27:34,320 Speaker 3: But in general, when you think about short lines, we're 488 00:27:34,359 --> 00:27:37,200 Speaker 3: just built different. You know, we're built to serve customers 489 00:27:37,240 --> 00:27:40,159 Speaker 3: and we're built to serve Class ones at the highest level. 490 00:27:41,040 --> 00:27:44,720 Speaker 3: And Class one interchanges can change with us. So one 491 00:27:44,800 --> 00:27:48,439 Speaker 3: day they may bring fifty cars to us at three pm. 492 00:27:48,560 --> 00:27:51,320 Speaker 3: The next day they may bring us twenty five cars 493 00:27:51,400 --> 00:27:54,040 Speaker 3: at five pm. And it's really hard to run a 494 00:27:54,040 --> 00:27:57,440 Speaker 3: precision schedule wheilroad with that level of variability. So our 495 00:27:57,520 --> 00:28:02,719 Speaker 3: focus has been look, just be flexible, be nimble, and 496 00:28:02,840 --> 00:28:05,160 Speaker 3: provide the highest level of service we can to our 497 00:28:05,200 --> 00:28:08,720 Speaker 3: customers based upon what our Class one partners provide us. 498 00:28:09,240 --> 00:28:11,640 Speaker 3: That doesn't mean we're going to operate inefficient and we're 499 00:28:11,680 --> 00:28:13,760 Speaker 3: not going to utilize assets the best we can. But 500 00:28:13,840 --> 00:28:18,000 Speaker 3: our ultimate goal here is to differentiate ourselves at the 501 00:28:18,000 --> 00:28:21,800 Speaker 3: customer service level, but also provide value to the Class 502 00:28:21,840 --> 00:28:23,800 Speaker 3: one and try to help them. We kind of view 503 00:28:23,840 --> 00:28:27,600 Speaker 3: ourselves as a shock absorber in the supply chain because 504 00:28:28,240 --> 00:28:30,639 Speaker 3: you know, we can actually kind of take on some 505 00:28:30,760 --> 00:28:33,040 Speaker 3: of the changes that happen at the Class one level 506 00:28:33,119 --> 00:28:36,399 Speaker 3: or the customer level and mitigate that as we interchange 507 00:28:36,400 --> 00:28:38,600 Speaker 3: with our partners or serve our customers. 508 00:28:39,200 --> 00:28:39,640 Speaker 2: Gotcha. 509 00:28:41,360 --> 00:28:44,160 Speaker 1: So you know one of the reasons why I guess 510 00:28:44,240 --> 00:28:48,480 Speaker 1: Wall Street loves PSR. It kind of pushes margins up 511 00:28:48,600 --> 00:28:53,320 Speaker 1: where operating ratio is down, which is good for profitability. 512 00:28:53,960 --> 00:28:57,360 Speaker 1: And Wall Street tends to be a little myopic when 513 00:28:57,400 --> 00:29:00,400 Speaker 1: when they're looking at margins. You know, I'm kind of 514 00:29:00,400 --> 00:29:03,520 Speaker 1: a fan of profitable growth. So, you know, how do 515 00:29:03,560 --> 00:29:05,760 Speaker 1: you how do you benchmark your business as a private 516 00:29:05,840 --> 00:29:09,160 Speaker 1: because it's private, so obviously it's not it's all about margins, 517 00:29:09,280 --> 00:29:12,240 Speaker 1: is about our return invested capital. How do you kind 518 00:29:12,240 --> 00:29:15,520 Speaker 1: of measure financial success to the company I mean, all 519 00:29:15,560 --> 00:29:18,320 Speaker 1: the metrics you know, are very similar. 520 00:29:18,360 --> 00:29:20,280 Speaker 3: I mean, you know, we can look at operating ratio, 521 00:29:20,360 --> 00:29:22,400 Speaker 3: we can look at return on invested capital, and all 522 00:29:22,400 --> 00:29:24,560 Speaker 3: those are really kind of important, but we don't really 523 00:29:24,560 --> 00:29:27,160 Speaker 3: have a true benchmark. What we look at is really 524 00:29:27,200 --> 00:29:30,880 Speaker 3: free cash flow generation. What we want to do is 525 00:29:30,920 --> 00:29:33,160 Speaker 3: try to generate as much free cash flow as we 526 00:29:33,200 --> 00:29:36,160 Speaker 3: possibly can from the assets we have. So you're you're 527 00:29:36,200 --> 00:29:41,080 Speaker 3: managing operational efficiency, you're managing pricing, you're managing growth, you're 528 00:29:41,120 --> 00:29:45,120 Speaker 3: managing capital deployment, all of those things. And really, when 529 00:29:45,160 --> 00:29:48,160 Speaker 3: you look at railroads, we're a high fixed costs industry. 530 00:29:48,720 --> 00:29:51,760 Speaker 3: The ultimate value creation we can do is put more 531 00:29:51,800 --> 00:29:56,960 Speaker 3: business through these fixed cost assets. The most profitable railcar 532 00:29:57,600 --> 00:29:59,400 Speaker 3: is the last railcar you put on the train. 533 00:30:00,200 --> 00:30:01,840 Speaker 2: I mean, it's just like lying on a plane. 534 00:30:01,960 --> 00:30:05,400 Speaker 3: So our view is as we really focus on growth 535 00:30:05,480 --> 00:30:07,520 Speaker 3: and we really try to put as much as we 536 00:30:07,600 --> 00:30:11,280 Speaker 3: can through the physical plant, because the most profitable, the 537 00:30:11,320 --> 00:30:14,040 Speaker 3: most you know, free cast flow jender to you know, 538 00:30:14,160 --> 00:30:14,800 Speaker 3: railcar is. 539 00:30:14,760 --> 00:30:17,720 Speaker 2: Going to be that last railcar we put into our operation. Guy. 540 00:30:17,920 --> 00:30:21,880 Speaker 1: You know, you mentioned railroading is obviously acid intensive, so 541 00:30:21,920 --> 00:30:23,720 Speaker 1: there's got to be you know, a large amount of 542 00:30:23,720 --> 00:30:27,440 Speaker 1: cap backs that you're pouring back into the to the network. Roughly, 543 00:30:28,160 --> 00:30:31,120 Speaker 1: what percentage of your revenue, Uh, do you guys spend 544 00:30:31,160 --> 00:30:34,440 Speaker 1: on cap backs and what percentage at as maintenance versus growth? 545 00:30:34,840 --> 00:30:39,720 Speaker 3: Yeah, I would say it's super dependent depending upon what 546 00:30:39,760 --> 00:30:42,280 Speaker 3: I mean. Last year as a great example, and you 547 00:30:42,320 --> 00:30:43,880 Speaker 3: know we're not public so I don't want to get 548 00:30:43,880 --> 00:30:46,000 Speaker 3: into much of the information on the private side of 549 00:30:46,040 --> 00:30:49,480 Speaker 3: the house. But you know, we invested more capital in 550 00:30:49,600 --> 00:30:53,040 Speaker 3: gnw's infrastructure last year than any time in our history, 551 00:30:53,600 --> 00:30:56,680 Speaker 3: and that was driven primarily by two things. One is, 552 00:30:56,840 --> 00:31:00,760 Speaker 3: you know, growth as well well as some of the 553 00:31:00,760 --> 00:31:02,840 Speaker 3: things we're able to secure on the grant side of 554 00:31:02,880 --> 00:31:03,280 Speaker 3: the house. 555 00:31:05,080 --> 00:31:05,800 Speaker 2: You know, when you. 556 00:31:05,680 --> 00:31:09,840 Speaker 3: Think about our core capital and our maintenance capital, I 557 00:31:09,880 --> 00:31:12,600 Speaker 3: would say not a lot has changed since we're publicly traded. 558 00:31:12,640 --> 00:31:14,480 Speaker 3: I think when we're publicly traded, if you go back 559 00:31:14,480 --> 00:31:16,920 Speaker 3: and look in twenty eighteen, twenty nineteen, or two hundred, 560 00:31:16,920 --> 00:31:20,600 Speaker 3: two hundred and twenty five million dollars a year of maintenance. 561 00:31:20,120 --> 00:31:22,320 Speaker 2: Capex when you look at our physical plant. 562 00:31:23,520 --> 00:31:26,040 Speaker 3: But we have certainly expanded on that as we look 563 00:31:26,120 --> 00:31:29,960 Speaker 3: to grow, invest in new locomotives, invest in new expansions 564 00:31:29,960 --> 00:31:34,480 Speaker 3: to support this organic growth. And then on the grand side, 565 00:31:34,680 --> 00:31:37,720 Speaker 3: you know, we're really looking to really invest and upgrade 566 00:31:37,760 --> 00:31:41,000 Speaker 3: some of the infrastructure. So over the next twenty thirty 567 00:31:41,040 --> 00:31:45,600 Speaker 3: forty years, your maintenance capex may come down because you've 568 00:31:45,640 --> 00:31:49,080 Speaker 3: replaced a lot of rail you replaced bridges, and a 569 00:31:49,160 --> 00:31:51,920 Speaker 3: big thing around maintenance capex for short lines. 570 00:31:51,960 --> 00:31:53,600 Speaker 2: When you think about it. 571 00:31:53,280 --> 00:31:56,160 Speaker 3: These lines were lines that came from Class one railroads 572 00:31:56,160 --> 00:32:00,320 Speaker 3: that were under invested that they actually leased or sold 573 00:32:00,360 --> 00:32:03,960 Speaker 3: these lines because they couldn't reinvest in them. So now 574 00:32:04,000 --> 00:32:06,560 Speaker 3: twenty years thirty years later, they're coming due for a 575 00:32:06,600 --> 00:32:09,800 Speaker 3: big capital infusion. So our focus is how do we 576 00:32:09,840 --> 00:32:12,880 Speaker 3: get that infusion in there at the lowest cost dollar, 577 00:32:13,520 --> 00:32:15,640 Speaker 3: because once it's in there, you've got another thirty or 578 00:32:15,640 --> 00:32:17,240 Speaker 3: forty years of life in that asset. 579 00:32:17,680 --> 00:32:20,280 Speaker 1: G You know, on the pricing front, you know, the 580 00:32:20,280 --> 00:32:22,959 Speaker 1: Class ones are able to you know, they've have pricing 581 00:32:23,000 --> 00:32:26,440 Speaker 1: power for quite some time. You know, they most years 582 00:32:26,440 --> 00:32:30,480 Speaker 1: are able to raise rates to you know, cover their 583 00:32:30,760 --> 00:32:34,120 Speaker 1: rising costs. As a short line operator, what kind of 584 00:32:34,120 --> 00:32:36,320 Speaker 1: pricing power do you have? Are you able to kind 585 00:32:36,320 --> 00:32:43,080 Speaker 1: of offset inflationary factors? Yeah, we typically in aggregate can 586 00:32:43,080 --> 00:32:46,640 Speaker 1: offset inflation. Obviously, every road's a little bit different. Some 587 00:32:46,720 --> 00:32:49,600 Speaker 1: of our roads we have pricing freedom. Some of our 588 00:32:49,640 --> 00:32:54,080 Speaker 1: railroads we have index based pricing. Some of our roads 589 00:32:54,080 --> 00:32:56,840 Speaker 1: we have agreements that we get in the same pricing 590 00:32:56,920 --> 00:32:58,480 Speaker 1: increases as our partners do. 591 00:32:59,760 --> 00:33:03,040 Speaker 2: So you know, it's a mix of everything there, and. 592 00:33:03,080 --> 00:33:06,560 Speaker 3: Because of that, I would say on a weighted average basis, 593 00:33:06,600 --> 00:33:11,360 Speaker 3: we typically get you know, we're not going backwards typically 594 00:33:12,120 --> 00:33:14,760 Speaker 3: some of these agreements. Historically, you know, when you have 595 00:33:14,840 --> 00:33:17,640 Speaker 3: high inflation, you may get behind the eight ball a 596 00:33:17,640 --> 00:33:22,320 Speaker 3: little bit. But obviously our partners understand what high inflation 597 00:33:22,440 --> 00:33:24,320 Speaker 3: looks like and they don't want us to go backwards. 598 00:33:24,360 --> 00:33:27,320 Speaker 3: So we negotiate with them and work out, you know, 599 00:33:27,440 --> 00:33:29,520 Speaker 3: things where we're trying to make sure we're not falling 600 00:33:29,600 --> 00:33:32,760 Speaker 3: behind and we're not digging ourselves a whole over the 601 00:33:32,800 --> 00:33:33,400 Speaker 3: long term. 602 00:33:33,400 --> 00:33:36,640 Speaker 2: But our goal is to price at or above inflation 603 00:33:36,760 --> 00:33:37,240 Speaker 2: for sure. 604 00:33:37,320 --> 00:33:39,640 Speaker 1: And you know, for productivity gains, obviously a lot of 605 00:33:39,640 --> 00:33:44,200 Speaker 1: people are deploying new technologies. I'm assuming you guys are 606 00:33:44,280 --> 00:33:48,600 Speaker 1: as well. Are you investing in machine learning or AI 607 00:33:48,960 --> 00:33:50,520 Speaker 1: or any other productivity tools. 608 00:33:50,680 --> 00:33:53,120 Speaker 3: Yeah, I would say on the technology front, that's one 609 00:33:53,160 --> 00:33:56,240 Speaker 3: area GNW has done a lot more investing over the 610 00:33:56,320 --> 00:34:00,640 Speaker 3: last three to five years, and we're obviously looking at everything, 611 00:34:01,960 --> 00:34:05,880 Speaker 3: whether that's just technology from an AI standpoint, or technology 612 00:34:05,880 --> 00:34:09,880 Speaker 3: from an autonomy standpoint, or technology we can take better 613 00:34:11,200 --> 00:34:16,120 Speaker 3: you know, testing and inspection of technology, whether that's camera, 614 00:34:16,239 --> 00:34:20,160 Speaker 3: machine learning, visioning, things like that. All of those have 615 00:34:20,239 --> 00:34:23,759 Speaker 3: a real application across our industry. It's also one of 616 00:34:23,800 --> 00:34:25,800 Speaker 3: the areas where we've had some of the biggest challenges 617 00:34:25,800 --> 00:34:30,680 Speaker 3: from a regulatory front. You know, when you think about autonomy, 618 00:34:31,120 --> 00:34:35,280 Speaker 3: rail is a great I would say probably the best 619 00:34:35,320 --> 00:34:39,000 Speaker 3: place to deploy autonomous solutions because it's it's integrated, it's 620 00:34:39,040 --> 00:34:43,000 Speaker 3: a closed network, it's not intertwined into the highway system 621 00:34:43,040 --> 00:34:47,399 Speaker 3: with passengers, it's two dimensional. But we've obviously had more 622 00:34:47,480 --> 00:34:52,920 Speaker 3: challenges deploying autonomous solutions in the US and we're working 623 00:34:52,960 --> 00:34:55,799 Speaker 3: through that. We're actually in the in the midst of 624 00:34:55,800 --> 00:34:59,160 Speaker 3: a pilot program with a company called Parallel Systems in Georgia, 625 00:34:59,800 --> 00:35:01,680 Speaker 3: and and you know, we have a waiver that we 626 00:35:01,719 --> 00:35:04,080 Speaker 3: got from the FRA and we're going through a pilot 627 00:35:04,120 --> 00:35:09,280 Speaker 3: program to test seven phases of this autonomous solution and hopefully, 628 00:35:09,600 --> 00:35:11,840 Speaker 3: you know, we'll get that progress, we'll get that solution 629 00:35:11,920 --> 00:35:14,040 Speaker 3: that I'll create a new growth avenue for us. 630 00:35:14,040 --> 00:35:17,040 Speaker 2: As a short line, you know, we were talking about 631 00:35:17,080 --> 00:35:18,120 Speaker 2: margins earlier. 632 00:35:18,400 --> 00:35:21,760 Speaker 1: I'm assuming you know, is there a big delta between 633 00:35:21,800 --> 00:35:23,600 Speaker 1: your different networks in terms of. 634 00:35:23,800 --> 00:35:27,399 Speaker 2: The margin profile that they have or are they kind 635 00:35:27,400 --> 00:35:30,000 Speaker 2: of all around the average for the most part, Like 636 00:35:30,200 --> 00:35:33,200 Speaker 2: do you have things that are operating at a ninety 637 00:35:33,239 --> 00:35:35,560 Speaker 2: five operating ratio and some things that are operating at 638 00:35:35,560 --> 00:35:37,000 Speaker 2: a forty five operating ratio? 639 00:35:37,120 --> 00:35:41,000 Speaker 3: Like yeah, It's it's all over the board, and you know, 640 00:35:41,120 --> 00:35:43,960 Speaker 3: some of that's driven by the asset itself. Obviously, you 641 00:35:44,000 --> 00:35:46,279 Speaker 3: need to have more margin in a railroad this six 642 00:35:46,360 --> 00:35:48,879 Speaker 3: hundred miles long than a railroad this two miles long, 643 00:35:49,120 --> 00:35:51,400 Speaker 3: because you're investing a lot more capital back in that 644 00:35:51,520 --> 00:35:54,560 Speaker 3: larger asset. So it's kind of all over the board. 645 00:35:54,680 --> 00:35:57,160 Speaker 3: It depends on our commercial arrangements, it depends on the 646 00:35:57,200 --> 00:36:00,920 Speaker 3: asset itself, it depends on the cap the intensity of 647 00:36:00,960 --> 00:36:05,440 Speaker 3: that asset. And like I said, we're not looking just 648 00:36:05,480 --> 00:36:07,920 Speaker 3: at o R or margin, We're looking at free cash 649 00:36:07,920 --> 00:36:11,120 Speaker 3: flow generation. So if you're not deploying as much capital 650 00:36:11,239 --> 00:36:14,759 Speaker 3: support that asset, a ninety operating ratio maybe be just 651 00:36:14,840 --> 00:36:17,759 Speaker 3: fined from a free cash flow generation standpoint, and that's 652 00:36:17,760 --> 00:36:19,320 Speaker 3: a good business to own and operate. 653 00:36:19,440 --> 00:36:21,560 Speaker 2: So that's kind of how we look at it. 654 00:36:21,719 --> 00:36:24,560 Speaker 3: Obviously, you want to be as efficient and have the 655 00:36:24,600 --> 00:36:27,800 Speaker 3: highest margin you possibly can, but you know, the market 656 00:36:27,840 --> 00:36:30,480 Speaker 3: dictates what margin what what what can be born in 657 00:36:30,480 --> 00:36:30,880 Speaker 3: the market. 658 00:36:30,920 --> 00:36:33,759 Speaker 1: Okay, you know you mentioned you know, regulatory hurdles that 659 00:36:33,760 --> 00:36:39,360 Speaker 1: you're dealing with with autonomy is the new you know, 660 00:36:39,400 --> 00:36:42,160 Speaker 1: Chairman of the STV and you know the Trump administration 661 00:36:42,239 --> 00:36:47,200 Speaker 1: obviously they're more you know, light or more business friendly. 662 00:36:47,800 --> 00:36:49,040 Speaker 2: Is uh Are those. 663 00:36:48,880 --> 00:36:52,000 Speaker 1: Changes good for you guys or are there any regulatory 664 00:36:52,520 --> 00:36:55,520 Speaker 1: things happening that are concerned now? 665 00:36:55,600 --> 00:36:58,319 Speaker 3: I would say all the changes we've seen to date 666 00:36:58,600 --> 00:37:01,719 Speaker 3: under the new administration and new leadership in the regulatory 667 00:37:01,760 --> 00:37:05,839 Speaker 3: side of the house is all positive. You know, we 668 00:37:05,920 --> 00:37:08,880 Speaker 3: always have our goal is to have great relationships with 669 00:37:08,920 --> 00:37:13,640 Speaker 3: our regulators, whether that's the STB or the FRA. But 670 00:37:13,760 --> 00:37:17,040 Speaker 3: I do think there's a sense of more business focus 671 00:37:17,360 --> 00:37:20,600 Speaker 3: from the regulatory environment today. You know, the Chairman of 672 00:37:20,640 --> 00:37:22,839 Speaker 3: the STB really wants to try to speed up the 673 00:37:22,880 --> 00:37:24,880 Speaker 3: processing of rulings through the STB. 674 00:37:25,520 --> 00:37:27,880 Speaker 2: He understands time kills deals. 675 00:37:29,920 --> 00:37:34,160 Speaker 3: Also, the FRA is much more focused on technology and 676 00:37:34,200 --> 00:37:38,040 Speaker 3: innovation now than the previous leadership of the FRA, So 677 00:37:38,120 --> 00:37:39,839 Speaker 3: I think that'll help the industry as well. 678 00:37:39,840 --> 00:37:42,120 Speaker 2: And we're seeing some of that flow through in this 679 00:37:42,320 --> 00:37:43,200 Speaker 2: like this waiver. 680 00:37:43,200 --> 00:37:45,400 Speaker 3: That they gave us to test the autonomous vehicle in 681 00:37:45,440 --> 00:37:48,960 Speaker 3: Georgia that was done under the current administration. 682 00:37:49,080 --> 00:37:52,279 Speaker 1: So those are positives for us for sure. Gotcha, and 683 00:37:52,560 --> 00:37:55,160 Speaker 1: so just you know, switching gears a little bit. How 684 00:37:55,200 --> 00:37:57,160 Speaker 1: did you get into the railroading business. 685 00:37:57,600 --> 00:38:00,920 Speaker 3: Yeah, so I actually started my career in the trucking industry. 686 00:38:01,000 --> 00:38:03,480 Speaker 3: I grew up in trucking. My dad was a terminal 687 00:38:03,520 --> 00:38:06,560 Speaker 3: manager for LTL carriers his whole life, so I spent 688 00:38:06,640 --> 00:38:09,400 Speaker 3: sundays on the dock, you know, playing on forklifts. 689 00:38:11,239 --> 00:38:12,760 Speaker 2: I started my career in trucking. 690 00:38:13,480 --> 00:38:18,319 Speaker 3: I worked through a teamster strike and realized as I 691 00:38:18,440 --> 00:38:20,680 Speaker 3: was loading trucks it was a lot more efficient to 692 00:38:20,760 --> 00:38:24,239 Speaker 3: move containers by rail. It took you know, a crew 693 00:38:24,280 --> 00:38:27,160 Speaker 3: to move three hundred containers, and it took me three 694 00:38:27,239 --> 00:38:29,320 Speaker 3: hundred drivers to move the same amount of traffic. 695 00:38:29,480 --> 00:38:32,120 Speaker 2: So I thought rail would be a good space to 696 00:38:32,160 --> 00:38:32,680 Speaker 2: go into. 697 00:38:35,560 --> 00:38:37,480 Speaker 3: I went towards rail when I went to work for 698 00:38:37,560 --> 00:38:40,360 Speaker 3: GP as a customer of the railroads. And believe it 699 00:38:40,480 --> 00:38:43,319 Speaker 3: or not, my wife actually worked at Norfolk Southern and 700 00:38:44,000 --> 00:38:45,000 Speaker 3: we lived in Atlanta. 701 00:38:45,000 --> 00:38:45,799 Speaker 2: I worked for GP. 702 00:38:46,000 --> 00:38:49,640 Speaker 3: GP wanted us to relocate and she didn't want to 703 00:38:49,680 --> 00:38:53,680 Speaker 3: relocate from Atlanta, and I said, well, I need another job, 704 00:38:53,719 --> 00:38:57,439 Speaker 3: and I gave her my resume and ultimately I got 705 00:38:57,440 --> 00:38:58,640 Speaker 3: a job at Norfolk Southern. 706 00:38:58,680 --> 00:39:00,600 Speaker 2: And that's kind of how I got into railroading. 707 00:39:01,880 --> 00:39:04,160 Speaker 3: After my wife got me the job, she decided we 708 00:39:04,320 --> 00:39:08,440 Speaker 3: would have kids and she retired, so so she. 709 00:39:08,160 --> 00:39:09,920 Speaker 2: She got me in and that's where I've been. It's 710 00:39:10,200 --> 00:39:13,879 Speaker 2: it's been a really good career. That sounds fantastic. And 711 00:39:13,920 --> 00:39:16,480 Speaker 2: what at your current job, you know, what do you 712 00:39:16,520 --> 00:39:17,399 Speaker 2: like most about it? 713 00:39:17,840 --> 00:39:19,759 Speaker 3: I would say the best job I've ever had is 714 00:39:20,080 --> 00:39:22,400 Speaker 3: the chief commercial officer. I love selling, I love being 715 00:39:22,400 --> 00:39:25,560 Speaker 3: in front of the customers. But what I really like 716 00:39:25,640 --> 00:39:29,719 Speaker 3: about this industry is the history. You think about railroading, 717 00:39:29,760 --> 00:39:32,560 Speaker 3: it really built America. It made us what we are today. 718 00:39:34,200 --> 00:39:37,840 Speaker 3: But it's also an industry that we should all be 719 00:39:37,960 --> 00:39:42,440 Speaker 3: very proud of. It's the safest mode of land form transportation, 720 00:39:42,560 --> 00:39:46,960 Speaker 3: it's the most environmentally form of land transportation. It pays 721 00:39:46,960 --> 00:39:49,520 Speaker 3: for its own infrastructure. It doesn't tear up roads. It 722 00:39:50,280 --> 00:39:53,160 Speaker 3: keeps you know, freight off the highway, so you know, 723 00:39:53,800 --> 00:39:56,239 Speaker 3: my family can move up and down the highway less 724 00:39:56,239 --> 00:39:59,839 Speaker 3: trucks on. It is safer, It requires less capital from 725 00:40:00,040 --> 00:40:03,600 Speaker 3: from taxpayers because we pay for own infrastructure. There's so 726 00:40:03,760 --> 00:40:07,880 Speaker 3: many positives of the rail industry. It checks the box 727 00:40:07,920 --> 00:40:13,200 Speaker 3: for customers, for communities, for employees, for you know, the 728 00:40:13,360 --> 00:40:16,799 Speaker 3: environment is so good that it makes you proud to 729 00:40:16,800 --> 00:40:19,800 Speaker 3: be part of it. And the other thing about the 730 00:40:19,880 --> 00:40:22,680 Speaker 3: rail industry that it's also really good. As big as 731 00:40:22,680 --> 00:40:25,400 Speaker 3: we think we are, we're actually a relatively small industry 732 00:40:25,760 --> 00:40:28,880 Speaker 3: and it's pretty interconnected. So you know your partners, you 733 00:40:28,960 --> 00:40:32,640 Speaker 3: know your vendors, you know, you know most people in 734 00:40:32,719 --> 00:40:36,080 Speaker 3: this space. So you create really good relationships with those people. 735 00:40:36,080 --> 00:40:38,160 Speaker 3: And it makes for a fun day in the office 736 00:40:38,160 --> 00:40:41,840 Speaker 3: when you can check all those boxes, have great relationships 737 00:40:42,400 --> 00:40:44,560 Speaker 3: and do a lot of good for the country. 738 00:40:44,840 --> 00:40:47,240 Speaker 1: And you know, before I let you go, I always 739 00:40:47,239 --> 00:40:49,640 Speaker 1: like to ask my guests, you know, if they have 740 00:40:49,680 --> 00:40:52,160 Speaker 1: a book about the industry that they work in or 741 00:40:52,160 --> 00:40:55,120 Speaker 1: in leadership that's kind of close to your heart that 742 00:40:55,120 --> 00:40:56,560 Speaker 1: you'd recommend to our listeners. 743 00:40:57,000 --> 00:41:00,880 Speaker 3: Yeah, I would say my focus is on leadership because 744 00:41:02,440 --> 00:41:06,480 Speaker 3: you know, I think leadership is foundational in any great company, 745 00:41:06,520 --> 00:41:09,319 Speaker 3: and it'd be hard not to say Good to Great 746 00:41:09,320 --> 00:41:13,040 Speaker 3: by Jim Collins is a great leadership book. One that 747 00:41:13,120 --> 00:41:16,279 Speaker 3: I pass around in our organization is The Ideal Team 748 00:41:16,360 --> 00:41:21,239 Speaker 3: Player by Patrick LYNCIONI. And you know I'm a man 749 00:41:21,280 --> 00:41:23,400 Speaker 3: of faith, so my all time favorite is the Bible 750 00:41:23,640 --> 00:41:27,719 Speaker 3: and the Servant Leadership Principles Demonstrated demonstrated by Jesus Christ. 751 00:41:27,800 --> 00:41:30,800 Speaker 3: So those are kind of three leadership books that I 752 00:41:31,400 --> 00:41:34,759 Speaker 3: focus a lot of time on. But I think it's 753 00:41:34,880 --> 00:41:38,280 Speaker 3: really important for people that sit in a seat like mine, 754 00:41:39,040 --> 00:41:41,080 Speaker 3: uh to be a good leader, to be a good 755 00:41:41,120 --> 00:41:43,759 Speaker 3: servant to the people we lead, because leadership is a 756 00:41:43,800 --> 00:41:47,080 Speaker 3: gift and it's given to us by those who follow us, 757 00:41:47,120 --> 00:41:47,479 Speaker 3: and it's. 758 00:41:47,400 --> 00:41:51,040 Speaker 2: Our job to be good shepherds of that. All right, great, well, Michael, 759 00:41:51,120 --> 00:41:52,719 Speaker 2: I really want to thank you for your time. 760 00:41:53,080 --> 00:41:56,080 Speaker 1: It was great, you know, meeting you and catching up 761 00:41:56,120 --> 00:41:57,960 Speaker 1: on the Genesee, Wyoming story. 762 00:41:58,239 --> 00:42:01,640 Speaker 2: Thanks Lee, and look forward to catching up sometimes in 763 00:42:01,680 --> 00:42:02,920 Speaker 2: the future, I hope so. 764 00:42:03,440 --> 00:42:05,520 Speaker 1: And I want to thank you for tuning in if 765 00:42:05,520 --> 00:42:07,919 Speaker 1: you liked the episode, please subscribe. 766 00:42:07,320 --> 00:42:08,200 Speaker 2: And leave a review. 767 00:42:08,560 --> 00:42:11,080 Speaker 1: We've lined up a number of great guests for the podcast, 768 00:42:11,120 --> 00:42:17,120 Speaker 1: so please check back to hear conversations with C suite executives, shippers, regulators, 769 00:42:17,160 --> 00:42:20,440 Speaker 1: and decision makers within the freight markets. Also, if you 770 00:42:20,440 --> 00:42:23,600 Speaker 1: want to learn more about the freight transportation markets, please 771 00:42:23,680 --> 00:42:24,680 Speaker 1: check out our work on. 772 00:42:24,800 --> 00:42:28,480 Speaker 2: The Bloomberg Terminal at BIGO and on social media. 773 00:42:28,800 --> 00:42:31,720 Speaker 1: This is Lee Glasgow signing off and thanks for talking 774 00:42:31,760 --> 00:42:32,680 Speaker 1: transports with me.