CSX Corporation issued an improved full-year outlook after posting broad-based volume and revenue gains in the second quarter, signaling a continued freight recovery even as operational metrics showed strain from stronger-than-expected demand.
Volume and Revenue Surge Across Segments
According to FreightWaves, CSX reported second-quarter revenue of $3.93 billion, a 10% increase year over year, while operating income rose 17% to $1.5 billion. Earnings per share climbed 23% to 54 cents. The railroad’s operating ratio improved by 2.4 points to 61.7%.
Overall volume increased 6%, led by intermodal which surged 9%. Merchandise and coal carloads each grew 4%. Within merchandise, all commodity categories were up except automotive (down 1%) and forest products (unchanged).
| Metric | Q2 2026 | Year-over-Year Change |
|---|---|---|
| Revenue | $3.93B | +10% |
| Operating Income | $1.5B | +17% |
| EPS | $0.54 | +23% |
| Operating Ratio | 61.7% | -2.4 pts |
| Total Volume | — | +6% |
| Intermodal Volume | — | +9% |
| Merchandise Volume | — | +4% |
| Coal Volume | — | +4% |
“We now expect full-year revenue growth in the mid to high single-digits, operating margin expansion of greater than 350 basis points, and free cash flow growth of greater than 80%,” said Chief Executive Steve Angel on the earnings call.
Previously, CSX had guided for mid-single digit revenue growth and operating margin improvement of two to three points.
Service Metrics Show Strain from Demand Surge
Despite strong financial results, operational performance was mixed. Average train speed improved 3%, but terminal dwell increased 6%. Intermodal trip-plan performance fell two points to 88%, while carload trip-plan performance dropped four points to 71%. On-time train departures improved one point to 70%, but on-time arrivals slipped one point to 54%.
Chief Operating Officer Mike Cory acknowledged the imbalance: “The demand came in much stronger than we expected, and we were tighter on crews in some of our locations. But we managed through that by being safer and more efficient.” He also noted a planned “modest increase” in headcount to address crew shortages.
On efficiency gains, Cory pointed to a 5% increase in average tonnage per merchandise train, while Chief Financial Officer Kevin Boone highlighted a 4% improvement in fuel efficiency. However, Boone flagged fuel cost volatility as a major risk: “We’ve seen a lot of volatility in the fuel price. … We saw a pretty dramatic increase this past week.”
Shipper Implications and Recommended Actions
The improved outlook and strong volume growth suggest CSX is capturing market share from truck as tight truck supply and strong demand drive highway-to-rail conversions. Chief Commercial Officer Maryclare Kenney said, “Customers are increasingly turning to rail for their supply chain needs.”
However, the deterioration in dwell time and trip-plan performance means shippers may face inconsistent service reliability, especially on carload moves. Freight forwarders and logistics managers should monitor CSX’s crew hiring plans and fuel cost management, as these will influence both pricing and service levels in the second half of 2026. CSX expects stable to slightly positive coal volumes and ongoing intermodal growth, but the ability to maintain fluidity amid rising demand will be key.
Watch List
- Fuel costs: CFO Kevin Boone warned of volatility and a “dramatic increase” in fuel prices, which could pressure margins and potentially lead to fuel surcharges.
- Crew availability: COO Mike Cory cited tighter crews in some locations as a factor behind higher dwell and lower trip-plan performance; a modest hiring increase is planned.
- Demand strength: If volume continues to outpace expectations, further service disruptions could occur, affecting transit times for intermodal and merchandise shipments.
- Highway-to-rail conversion: Ongoing tight truck supply and strong demand may sustain intermodal growth, but CSX must balance capacity with service quality.
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