In an interview with CNBC’s Jim Cramer, CSX Joe Hinrichs detailed how government action is affecting the railroad company, saying its industrial development business is growing as companies react to the U.S.’s efforts to encourage domestic manufacturing.
“We had 37 plants open on our network this year so far already,” Hinrichs said. “At the end of last year, we had 500 projects in the works with companies to find locations on our network — that number is now 600.”
CSX primarily operates railroads on the East Coast. It also helps industrial companies and manufacturers to build “rail-served” factories, plants and facilities. According to Hinrichs, the more products are made in the U.S., the better it is for his company.
But Hinrichs also addressed the impact of higher tariffs on CSX, saying that while the company’s exposure to China is less than 10% of revenue, it’s still an important part of business. The railroad “moves a lot of traffic” that comes from West Coast ports, with items travelling to Chicago, Memphis or somewhere else on CSX’s network, he said, “because two thirds of the population are on our side of the…Mississippi river.”
Hinrichs admitted that difficult weather hurt business in the beginning of the year, and CSX is still feeling the effects of hurricane Helene. The hurricane devastated parts of the East Coast, especially North Carolina and Florida, in September of last year. Hinrichs said CSX lost a fourth of its network going north and south, and it’s still rebuilding.
“It won’t be back until the fourth quarter, but we’re starting to run a lot better, and we feel good about where we are,” he said.
