Railroad Operator CSX Sees Rise In Industrial Development Following Trump Tariffs

Railroad operator CSX’s CEO, Joe Hinrichs, said on Wednesday that the company has seen a rise in its industrial development business as companies rush to onshore production units amid rising tariff uncertainty.

“We had 37 plants open on our network this year so far already,” Hinrichs said in an interview with CNBC’s Jim Cramer. “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 is a railroad company primarily operating in the eastern United States and the Canadian provinces of Ontario and Quebec. It also assists businesses in building facilities connected to its rail network for supplies.

The U.S. is currently negotiating trade deals with several partners, as a 90-day pause has kept import tariffs at 10% for most products from countries excluding China.

While President Trump’s administration has agreed to lower tariffs on Chinese goods to 30%, U.S. businesses are beginning to shift their manufacturing units out of the world’s second-largest economy.

Hinrichs said that while the company’s exposure to China is less than 10% of revenue, it’s still an essential part of the business.

He said the railroad “moves a lot of traffic” from West Coast ports, transporting items to Chicago, Memphis, or somewhere else on CSX’s network.

The company reported a 7% decline in revenue in the first quarter, while its total volume decreased by 1% compared to last year.

Adverse weather, the Howard Street Tunnel, and the rebuilding of the Blue Ridge subdivision impacted the company's earnings.

Hinrichs said CSX lost a fourth of its network going north and south, and it’s still in process of restoring its network due to hurricanes in the region.

“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,” Hinrichs said.

CSX stock has fallen 6.3% year to date (YTD).

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