“International Intermodal will fully lap last year's tariff volatility in August, and we expect volume to be positive in the second half.”

In context

“Kenny Rocker : Thank you, Jennifer, and good morning. We had a very strong second quarter as freight revenue grew 12% to $6.5 billion. And if you exclude fuel surcharge, grew 4% to $5.5 billion, both were best ever records. Let's walk through the key drivers on Slide 10. Starting with our bulk segment, revenue was up 7% compared to last year on a 1% decline in volume. Grain and grain products had double-digit volume growth in the second quarter, driven by strong export demand, facility expansions and growth in renewable fuels and associated feedstocks. That resulted in record second quarter volume and revenue. Meanwhile, coal volume was challenged by weaker natural gas prices, mild weather across our served locations and customer downtime. These factors adversely impacted overall demand. Shifting to industrial. Revenue was up 8% on a 3% increase in volume. When you exclude fuel surcharge, strong core pricing gains delivered record freight revenue and average revenue per car. Petrochemicals growth was driven by improved demand and new business. In Metals & Minerals, volumes rose on higher domestic steel production and business development wins more than offsetting the ongoing weakness in the export soda ash market. Premium revenue for the quarter increased 21% on a 4% increase in volume and a 16% increase in average revenue per car, reflecting higher fuel surcharge, core pricing and improved business mix. Domestic Intermodal delivered its fourth consecutive record quarter in both volume and revenue. It's evident our outstanding service set the foundation to grow the business. And that's exactly what we're doing. In the second quarter, private asset, rail asset and parcel volumes were all up double digits, benefiting from constrained truck capacity and share gains. Our buffer resources allowed us to respond quickly to increase customer demand. International Intermodal volume was down 14% versus last year. However, we saw improvement as we closed out the quarter, driven by stronger West Coast import volumes. In automotive, results were positive despite market softness due to strong business development results. Looking ahead on Slide 11. Grain and grain products is positioned for further second half growth driven by strong export demand, ongoing business development and new facility openings. I'm excited about AGP's new export facility that opens next week in Grays Harbor, Washington. We also see continued upside from growing renewable fuels and feedstock markets supported by greater policy certainty. In coal, elevated inventory and lower natural gas prices will make for a challenging second half. We will continue to watch this market closely, but Eric and his team have proven they can quickly flex to handle shifts in volume. Business wins are also helping to offset some of the market-driven declines. Moving to Industrial. We still see a south housing market but we remain firmly focused on winning new business and outperforming industrial production. We expect continued strength in metals, well, from industrial development efforts and increased petrochemicals from customer wins like the startup of CP Chem that I mentioned last quarter. And wrapping up with premium, we expect domestic intermodal to continue to perform very well, supported by over-the-road conversions and our service product. International Intermodal will fully lap last year's tariff volatility in August, and we expect volume to be positive in the second half. And for automotive, we expect new business to offset market weakness. So while we're proud of the record second quarter, the team is focused on capturing the opportunities ahead. Our approach does not change. Price of the service we provide, invest for growth and keep winning new business. And with that, I'll turn it over to Eric.”