CSX CEO says railroad to benefit from supply chain snarls

CSX Corp. is expecting to benefit from the supply chain snarls that have tormented other companies.

Joe Hinrichs, the railroad giant’s new chief executive officer, said CSX’s largest customers have told him they’ll shift production to US plants from overseas factories to avoid the supply disruptions that have roiled the economy.

“They are telling us: ‘Listen, after what we’ve experienced the last couple years, chasing some lower labor costs overseas paled in comparison to the costs that we suffered from all the supply chain and logistical issues,’” Hinrichs said in an interview after CSX posted better-than-expected third quarter earnings. “They’re looking at more investment here and bringing things back” to the US.

For CSX that should translate into more freight hauling, especially since much of the investment will be centered in its stronghold in the southeast US. Hinrichs, a former executive at Ford Motor Co., cited two big new auto projects as examples -- Rivian Automotive Inc.’s new Georgia factory and Ford’s new electric vehicle and battery plant in Tennessee. 

“I can tell you with an auto site, they definitely take rail service capacity into the equation of where to locate,” Hinrichs said. “We are seeing some good wins from that.”