Norfolk Southern Corporation (NSC) Earnings Call Transcript & Summary

All right. Good morning. So we're going to keep things rolling here with Norfolk Southern. I'm Brian Ossenbeck. I cover the transports for JPMorgan. Very happy to have Alan Shaw here. He's the President and soon to be CEO; and Ed Elkins, who is the CMO and the audience, we have Meghan Achimasi from IR and also Mark George as well. So I'm going to turn it over to Alan who's going to make some brief introductory comments, then we'll come back for the Q&A.

Thanks, Brian. I'm going to start with a little bit of housekeeping. The slides that we're going to present today the presentation is on our website as are any non-GAAP reconciliations. Ed Elkins and I, we will make some forward-looking statements today. They are subject to risks and uncertainties. And I would invite you to take a look at our SEC filings for kind of a more comprehensive outlook of our risks and uncertainties. And of course, actual results very well may vary from our outlook. We'll step back for just briefly. 2021 was a final chapter in our previous multiyear plan. We hit our targets. We hit our targets for operating ratio. We lowered at 530 basis points to a 60% OR. We generated 110% in total shareholder return over that time period and shareholder distributions were $10 billion. We're pleased with that progress. We also know we got more to go, and we're very confident in our ability in the future to continue to drive shareholder returns. I'll anchor our productivity journey to the implementation of TOP21 in the summer of 2019. And during that time period, we delivered a 450 basis point improvement in ORR against a headwind due end of a freight recession in the second half of 2019, followed by the pandemic. One of the key drivers of our OR improvement was train length. We improved it by about 20%. And as we move into top SPG that's going to be a focal point of ours going forward. The other key driver of our improvement in OR was the markets that we serve and our ability to deliver growth and our ability to yield up and heads up here because we're intently focused on that as well. Ed, do you want to cover that a little bit what you're seeing in the markets?

Absolutely. Can you hear me? I want to touch on a couple of emerging trends that we have seen really accelerate since the end of the pandemic and also talk about our approach in terms of technology and how we're addressing those trends or at least one way we'll address them. We've really started building our customer-facing products with the idea of the industrial consumer, and that is B2B transactions, but they're informed by our B2C experience. You can name your favorite e-commerce provider. As an example, whether it's Amazon or someone else. We want to make sure that the technology that we're delivering is number one, easy to use, provides real answers and is actionable both for our customers and for us. And the first one that you see here we announced earlier this year that's Insights. The best way to describe it, it is a Zillow like product for customers who are looking to invest along our tracks or looking for capabilities using our railroad. And to put it very bluntly, if you were looking for space to build a facility, a warehouse or an existing facility that can provide services for you this is where you could go, you get a comprehensive look at it. It's a very intuitive, easy-to-use tool. And what we've seen really throughout the pandemic, but it's accelerating is the recognition of greater supply chain resilience as a need for our customer base. And part of what that means is we think forward positioning of inventory closer and closer to the end user. So discretionary investment dollars, as they come back to North America, we believe they're going to be invested in ensuring that there is a supply resiliency. And frankly, probably shorter supply chains in some cases, but this is our first attempt at how we're going to address that with our industry-leading industrial development group, which I'm very proud to be a part of and help lead that organization we are solving problems for customers. If you go to the next slide, we just launched our carbon calculator on Monday, and there are plenty of carbon calculators out there. This one gets informed by that industrial consumer perspective, okay? And this is not just averages between here and there, using the average car and the average train. These are specific calculations for the specific conveyance that a customer might use, whether that's a gondola or an intermodal ride and it's specific to the here and there as well. So it's actually origin and destination. This provides real tangible actionable answers for our customers as they seek to deliver value to their customers. And it helps us, provides us with a platform to talk to them about how we're going to fix their problems and help them move forward. So both of these same concept, different perspectives on emerging trends in the economy. Now looking at the 2022 outlook. We believe there's still a very strong freight environment out there. There's plenty of demand. We have a robust consumer who has proven themselves willing to spend. We see durable goods restocking and consumption, both being quite strong this year. And U.S. light vehicle production will come back later this year. We all are very familiar with what's going on with the chip shortages, et cetera. We're seeing less and less of those problems every week right now. There's still some out there. And certainly, there's plenty of disruption in the geopolitical landscape to make me very reticent to say that we have a clear line of sight on when it gets better. But we think it's going to get better in the second half and probably in the next year. Seaborne coking coal prices, as you see there, we've changed our not from yellow to yellow green. What's happened is you look at the last 3 weeks, which has been extraordinary in terms of commodity markets across the board, certainly for energy, we believe that we have line of sight on stronger pricing, particularly on the export side for our coal business. And the real trajectory for coal is going to be predicated by how much gets produced and there's a ceiling on that right now in the U.S. There is more investment come on. But we believe we have a better line of sight now and stronger pricing. And then lastly, if you look at the quarter to date, we're off to a slow start, quite frankly. Again, you see strength in our coal franchise. You also see strength in our chemicals. A lot of that is coming out of our waste markets as well as NGLs. We have plenty of market demand in our ag space as well as metals and construction and quite frankly, in our intermodal network. Auto has a different set of challenges, but certainly, we believe that that's going to get better. Our network is not producing enough capacity to deliver on the demand that our customers want to give to us right now. There are a couple of things, though, that are going to change that. First is supply chain congestion, we believe, will get better and better as the year progresses, certainly in the second half. And number two, we're going to deliver on our promise to fix our service product, and we are not satisfied with where we're at right now. And I'll turn it back over to Alan so that you can talk a little bit about what we're doing about that.

Brian, we are going to restore our service that is our #1 priority. And Ed talked about what we're seeing in coal. There's a perfect example. We do have a good service product between the coal fields in the ports in Baltimore and the coal fields and Norfolk. And that's allowing us to take advantage of that market opportunity. And we are convinced that as we restore service moving into the second half of the year, markets stay the same as I articulated, it creates a lot of opportunity for us across our franchise. It's important that we recognize the need to restore service and is important that you know what we're doing to restore service. It's a function of plan, and it's a function of resources. With respect to resources, we are aggressively hiring crews, crew hiring moved up throughout last year. So far, crew hiring to start the year is extremely robust and at a pace much higher than what we saw last year. You can think of the qualification of a crew member of approximately about 4 months. So once we get the person in the door started in the training facility, about 4 months to get that person qualified. If you think about the trajectory and the cadence of our hiring to start the year, then you can start to see an inflection point in our qualified crew members in the second quarter of this year, which gives us some confidence as we move into the second half of the year for crew availability and restoration of service. I was at our crew training facility earlier this week, making sure that the conductor trainees and frankly, are the instructors who are there recognize the importance of what they're doing to the success of Norfolk Southern. The other component, the other lever that we're pulling on is top SPG, a comprehensive redesign of our operating plan. And Brian, hopefully, we'll get an opportunity to discuss that at length on our Q&A. It's in process now. We've got the right people working on it. And we feel like that, coupled with our crew hiring is going to really strengthen our service product in the second half of this year, which will then allow us to take advantage of the market opportunities that Ed presented. We will close by reaffirming the outlook that we presented on our fourth quarter earnings call. We understand that service has been a headwind to volume and been a headwind to revenue in the first quarter. However, it's early in the year. And we fully believe that with the market opportunities and service recovery, we'll be able to recover that -- or pardon me, to still hit our outlook for the year, assuming that the market stays where it is and our service recovers in the second half of the year, which is what we're looking at. It's -- we appreciate the opportunity to be up here. And so now what I'd like to do is continue the conversations with some of your questions.

All right. Thank you, guys. Appreciate it. So obviously, we spent a lot of time earlier on labor and with some of your peers. But at least my perspective, it seems like the labor challenge has really been more acute at Norfolk. And I don't know if you'd necessarily agree with that or not, but was there too many cuts under TOP21? And as we look at the numbers, we see the STB this morning, T&E is up almost 200. So moving in the right direction, I guess, is there something more structural when it comes to Norfolk and the challenges you face from your perspective? And I guess how confident are you that you're really at the inflection point to continue that momentum and to build back to the second half year recovery?

Brian, as you recall, when we implemented TOP21 in the third quarter of 2019, we executed that flawlessly. And in fact, our service improved with that implementation under frankly much higher volume levels. So what we're focused on now is improving our service product through that combination of T&E base and with our operating plan. And as I noted, you can assume 3 to 4 months for qualified crew member. We ramped up our crew hiring or I should say, accelerated it starting in January. And those folks will start becoming qualified as we move into April. And so yes, we believe that as we move through the second quarter, we'll be at an inflection point, which gives us a lot of confidence as we move into the second half of the year on restoring our service product, coupled with the operating plan improvements we anticipate, which will make us less labor intensive.

Okay. Well, obviously, you just finished with the 1 slide reaffirming the outlook. But one thing that has changed for everybody again is the fuel price. And in terms of -- and on we expected to be here and who knows where it will be at the end of the quarter and midyear, but at least in the near term, can you sort of talk about the impact of fuel surcharges in the past, Norfolk has had something a little bit different, but I think it's more standard now on highway diesel? So maybe near-term impact on the fuel surcharge headwind and the timing? And also just from an OR perspective, you've talked about this before, but it's 100% OR, so fuel is going to be a drag on that? So how do you see all that? We're still early as you mentioned, but how do you see all that here in the near term and throughout the year?

Yes. Through the first quarter, it will be a headwind. And it could be up to 100 basis points in OR. Again, we are reaffirming our outlook for OR improvement throughout the year because we fully believe that the markets are going to hold and our service product is going to improve as we move into the second quarter of the year.

Okay. So at the flip side, you mentioned the one back a little bit more green. We see the prices they're quite strong. But I guess the question is you mentioned some constraints on the coal side just because the prices there doesn't mean we can actually move it or there's capacity to move it on the network. So do you see any early indications of the stronger commodity price picking up in volume? And just how do you think this plays out? Are you expecting some sourcing shifts to happen here? What are the customers telling you?

It's funny. We're seeing really, really close to our customers right now because like I said, the last month has had a number of things happened that we've never really seen before. Commodity prices are higher now than they have been since really the 1970s in most cases. That includes energy. The story we think coming out of the geopolitical tension that's going on right more than tension that's going on right now is really about agriculture and energy. That's how it's going to manifest itself, I think, in the U.S. and the role that we're going to play and maybe the U.S. railroads are going to play. Can we deliver the calories that the world needs? Can we deliver the BTUs that they need in whatever form that is. Generally high commodity prices are good for railroads. Historically, that's been true. We are preparing ourselves to be very opportunistic about not only for grain, corn, also for ethanol, coal, other forms of energy. So there's a lot going on. We're staying extremely close to our customers right now.

Okay. So on the top SPG plan, I do want to spend some time on that. Can you just give us an overview of how -- what inning are you in, when it starts, just to kind of level set expectations? And then just a high level how you're looking at network balance, you're looking at longer, bigger, heavier trains, better executability? Maybe you can just start off with the overview of how that's working so far, at least what you picture it doing?

Yes, it's grounding all those facets of PSR. It's network balance, it's reduced complexity. It's -- we fully anticipate it's going to generate longer trains, which will improve labor efficiency, fuel efficiency, locomotive efficiency. And first and foremost, it has to be something that's executable on a daily basis. We're starting with the intermodal network still in design phases now. That has a lot of appeal to me for a number of reasons. Intermodal is the most service-sensitive and it's the 1 where schedules matter the most. And so you take a clean railroad and you overlay the intermodal network on top of it. How you want that to run, how you want that to move the balance that you need in order to be efficient and reliable. And then you layer on top of that the merchandise network, in which, as Ed will tell you, it's more reliability and consistency that matters in merchandise than speed or schedule. And then you also put on the bulk network. And the bulk network will be probably a multiyear plan as we work with our customers to length the trains, lengthen sidings, lengthen their own capacity. We anticipate rolling it out sometime later in the second quarter. We are going to take our time to make sure that we get it right. We are going to take our time to make sure that we communicate with our customers, we communicate with our employees. We can communicate with any constituents that are going to be impacted by this. That's our no-surprises approach to PSR. That's the formula that we utilized in 2019 with great success.

So in terms of the -- I guess, the management team from a strategy perspective and also in the field executing this. We saw some announcements recently about some new hires and internal promotions, I guess, and some retirements. So was that already part of the plan was that more indicative of recent performance, and I guess, overall, do you feel like you have the right people now in the right spots to execute on this?

Yes. We've got a great team. We're sorry to see John Friedman in his 27-year career retire. We were very fortunate in order to attract somebody of Paul Dunkin's caliber and qualifications. Here's somebody who's a leader on teams that improved OR, improved efficiency, lengthen train size, improved market share and improve service. And that's what we want, right? That's that balance that we're looking for. And he has delivered that in spades. He has come over as our Vice President network planning and operations that allows us to have our Vice President of Transportation, intently focused on execution out in the field, having Paul in place as we implement and design top SPG is a real benefit for us, our customers and our shareholders. . We also have Mike McClellan who has moved into the role of EVP -- pardon me, Senior Vice President and Chief Strategy Officer. Mike, just like Paul, is a thought leader in the industry, and he's highly regarded. And as we look to strengthen our strategic planning team, we tie it at the hip with Mark's FP&A team, we're building a really strong team. It also indicates just those 2 moves indicates our willingness to look inside Norfolk Southern and outside Norfolk Southern to enhance our talent. And we're happy that those 2 folks want to continue their careers with Norfolk Southern says something about where they think Norfolk Southern is headed.

So I guess to kind of run off the SPG discussion, it sounds like it is more -- a little bit more revolutionary than evolutionary I guess that was sort of the questions we're having from investors as announced and what exactly is it? Is this just a continuation of what you've been doing? Or -- and it sounds like it's much more involved if you're going to have a second quarter rollout and work with the customers and really just redesign anything. So I guess that's the that's the main question. Is this a big step change? Or is it kind of more of the same as what you've done before?

Well, it's more of the same of what we did in 2019. However, it's revolutionary from 2019 and that we're involving intermodal as well. When we did TOP21, it was merchandise and bulk. And we've made iterative changes to our intermodal franchise every year since 2013. And here, we're doing an overview and redesign of the intermodal franchise to drive better balance, less complexity, better executability. At the same time, we're including merchandise and bulk is grounded in the fact that we're going to deliver something that the folks in the field can execute on a daily basis. .

And when you think about benchmarking and looking at where you want to go, where you've been some of the improvements you mentioned on fuel on train lengths. Is there anything in your mind, structural that would keep Norfolk in the network and the mix as it is from getting to similar levels from operational perspective, from an OR perspective as some of the peers who have gone through their PSR experiences earlier already?

It's -- we lowered our OR by 430 basis points last year and narrowed the gap. We fully intend to continue to narrow the gap. And we're going to pull hard on levers associated with revenue growth, with revenue quality and with productivity. We're confident that as we implement top SPG, that's going to be a lever for improving our service product as well. And so that is going to help us generate more revenue through our network.

So Ed, maybe going to the end markets and the back half recovery, assuming the service product improves and you get the assets and the turn times that you want, what's sort of underpinning the guidance as it is -- now clearly, the first half has been the first quarter, rather, it's been weak for just about everybody. But I guess what are you counting on the most? In Canada, you've got Canadian green, but here, you've probably got a much wider mix of different markets?

Sure. Well, there's a lot of 2022 left, and we are very confident in our ability to deliver the service that our customers need in the second half. So we are going to fix the service. The end markets that we serve are very strong. We are very, very fortunate to have a portfolio of customers who want to do business with us that want to grow. And we thank them every day for that and appreciate their business and their willingness to share with us ways that they want to grow with us. So we have a great portfolio of customers. We have wonderful markets and geography that we're serving that has a lot of pent-up demand right now. supply chain congestion issues, which extend well beyond the railhead, they're going to get fixed. They will. Later this year, we think they're going to be better than they are now, and they will continue to improve. And when that happens, we're going to unlock a lot of value. And as we fix our service, we're going to unlock additional value for our customers. And again, our customers want to grow, whether it's on the consumer side where there's a tremendous amount of opportunity, we believe, whether it's on the industrial side, whether it's grain or it was ag or energy like we talked about. But there's a lot of pent-up demand to not only restock, but also expand industrial potential in this country. So I think all of the post-pandemic trends that we've talked about in various places, whether it's the recognition of supply chain resiliency as an important component now, whether it is the idea of sustainability is more than just a headline, but it's something that you need to deliver value on. Whether it is incremental investment dollars coming back to North America, we're positioning ourselves very well as those trends start to evolve even further.

From the supply chain improvement perspective, is that still -- like what's the main pinch point as you go out there and you feel like, what would you what more of equipment wise, obviously, you want better turn times, but is this still chassis? Is it labor? If the warehouses like where are you seeing the biggest bottlenecks? And I guess therefore how confident are you that they actually do this all?

It's an ecosystem. It really is. each link relies on the next link for part of its success, whether that's the warehouses reliant on the drayman or the drayman reliant on the railroads or the railroads reliant on the port. So I can keep going back in the supply chain. It all has to improve. And certainly, labor has been a portion of that for everybody. We've invested a lot in new chassis this year that are coming online. But the best cure for congestion is really decongestion throughout the supply chain, and that's going to unlock what I believe is enormous value for our customers and also capacity, not only on the railhead but also inside the warehouse, inside the port, inside the factory floor. There's a lot of opportunity out there, and there are a lot of smart people working on how we're going to get out of this, not only on the railroad, but again, across the supply chain that's going to have an impact this year.

And how do you think about market share, we talk about truck in a minute, but just in the east from a rail perspective, we've seen originated percentage more go towards your peer for the last several years, and there's different reasons for that. But it feels like coal contracts go back and forth every once in a while. Assuming SPG helps you get where you won, is that an opportunity to kind of bring some of that back? Do you feel like you've lost it? Is that part of what we can consider potential upside with a better service and lower cost product?

Sure. Well, it's -- there's in the top SPG for a reason, it's growth. And that's what we're going to do. We're going to grow and we're going to grow adding value for our customers. And we think about consumer markets, we call it flexible freight, right? It's freight that has a choice between whether it's going to go on the highway or whether it's going to use rail. It has a choice predicated off the value that each conveyance can deliver. So we're going to deliver the value that is going to make a compelling case for that flexible freight market to decide to use rail, whether it's part of the sustainability story that is becoming more and more real every day, whether it's part of the price story and the efficiency story that we can deliver. A stable, reliable service product is the fundamental element necessary to deliver value to our customers, and that's what we're working on delivering right now. Going forward, I can't speak to our peers, I hope them success, but we're going to grow and we're going to grow in that $800 billion flexible freight market.

And just on that market in general, like it's obviously quite big. So even a small piece would go a long way, but getting it to grow through the cycle and to stay through the cycle and not be so flexible, I guess, is seemingly a big challenge for the industry. Because right now, you'd be able to ship on rail and you -- there's obviously challenges to doing so and there is [indiscernible] and other things that are complicating that. So I guess, when you think of through the cycle, does that mean extending the reach of Norfolk with partnerships or bolt-on acquisitions like you need to extend the railhead, assuming services where you want it to be, what else has to be done and to really get that freight to move into?

Delivering value beyond the railhead is certainly a key part of what we are working on now for the future. Norfolk Southern has experience in owning other companies and providing other services. We think there's a tremendous amount of organic opportunity right now in the marketplace to partner with people that are specialists in various parts of the supply chain to deliver that additional value to our customers. So we we're always looking at the environment, but we believe that there are plenty of partnerships out there that we can deliver value through to extend that value beyond the rail and to our customers.

Just more broadly in intermodal space. Are you still seeing the tendency for steamship lines to really just put the container on the ground, go local and kind of disintermediate the international intermodal a bit? And that's obviously a factor in part of the congestion because that's not typically how these systems work. So I don't know if that's sort of what you're experiencing still, but maybe an update just on intermodal with this big restocking that people are expecting on the consumer side, what are you actually getting on the network and what do you need to kind of get fixed to get more?

Yes. On the IPI side for the steamship lines, they've experienced all the same congestion issues that we have and everyone else has. For their customers, particularly for the steamship lines that we've been partnering with they've been making some tough decisions about do we stop it at the port and let the customer figure it out? Or do we try something else? There's a lot of things going on out there right now, but we believe that as congestion alleviates itself in the coming weeks and months that the natural flow for IPI freight is going to return to what I would call a more conventional while.

So Alan, we've got the STB fairly active schedule here. reciprocal switching is going on right as we speak. So what is kind of your view on that process at this point in time? It feels like the administration has made the point of this is something that came up with the executive order. So it's definitely got a focal point. But how do you see that resolving, and just what's your view on the regulatory front in general?

Well, we're glad to be involved in the process. Our Chief Operating Officer, Cindy Sanborn is meeting with the STB today. It's a continuation of our involvement over multiple years on forced access. We've -- there is reciprocal switching in place now. It's done voluntarily. We feel like that is serving a market need. And we'll see where that heads. We're going to continue to stay involved in the process.

And obviously, the other one out there in front of the STB is just the CPC merger. So everybody has put their response with applications out there. I don't know if anybody has read all the thousands of pages yet, but we've certainly seen the headlines. So maybe you can just elaborate on at least the greater Meridian Speedway access that you're proposing? And then are there other opportunities to do more with that network, assuming it goes through? Like our other actual positives that could come out of it from a better service product or something that might connect better with your network?

Yes. I think the Meridian Speedway is a great example of what you were talking about earlier with respect to partnerships. We partnered with KCS on that years ago. It is a link in the fastest route between the Southwest and the Southeast, which are the 2 fastest-growing segments of the United States. Our -- you can read our filing. It's that's really focused on protecting our customers' rights and our shareholders' rights with respect to our access to the Meridian Speedway. It's been a growth driver for us, and it's in a lot of demand from the customers that had interacts with on a daily basis.

So Ed, we haven't covered autos yet, but it feels like it's just perpetual push out to the right. I know you've got a couple of big plants you've got the [indiscernible] plant in Alabama. But every time it seems like we get some new news. There's a shortage and something shuts down for a little while. So it kind of fits and starts, which I imagine you're experiencing every day. So what's the latest you're hearing from your customers? Do you have any near-term exposure to some of that volatility, maybe it's the same as it has been in the past, just pits and starts? And then network-wise, does some recovery like that actually make it harder to get service back because you just have a bit of a moving target?

Well, I think I mentioned a little bit earlier, we've -- on the automotive side, -- we've seen the same disruption that everyone else has in terms of production at various facilities, but that disruption associated with chip supply has become less and less every week. As a matter of fact, we are we have very few places now that are really experiencing a full shutdown in terms of production. So I'm encouraged by that. And I think as the year progresses, the supply chain will get better. Now there's plenty of wild cards out there that I'm not qualified to predict most of them associated with either COVID in the Far East or in Europe, that might influence various parts of those supply chains. But the way we see it right now, we believe that is going to continue to improve.

And you pulled up the slide earlier with NSsites in terms of just deciding the industrial development. It seems like there's a little bit more of a of a move across the industry, not just to sell land and get the gains, and we all exclude it from numbers, but actually put some growth down there. Is that really the change in perspective in the tone, like is the industry really moving more towards that? And maybe you can comment specifically on Norfolk in terms of like leveraging that land and actually making these partnerships and doing joint ventures and things like that to get that freight on the network and to stay there?

I think you nailed it, it's not just about land sales or a portfolio that you're managing predicated off the sale value, when you look at really in this -- again, this post-pandemic environment, having the ability to put inventory closer to your customers, having the ability to perhaps either provide final assembly or some subassembly closer to the end markets is becoming increasingly important. And when you think about a piece of land that's located on a railroad that serves 22 states, the majority of the U.S. population, the majority of U.S. manufacturing, there is a lot of value associated with figuring out how to deliver value to our customers by partnering with folks who have a specialty in real estate development and might be able to help us deliver value to a customer that wants to do exactly that. And that's put that inventory closer to the customer base and provide value to customers in that way. So it's an evolving strategy, but we're really excited about it as a matter of fact.

So Alan, on the SPG plan technology, I think, has been talked about for a while in the industry, but it's obviously quite antiquated in some areas when you think about like air brakes. But how do you see that as part of the next plan? And maybe just bring us up to speed in terms of where you are? Now we've got automated train inspection portals, where you've got some of the track inspection, you can do things more in the field. So where is Norfolk now from a technology perspective because I don't think you generally talk about it too much. And then where do you think you can add some additional improvements as you look to off this new plan?

One of the best tools that we have with respect to top SPG is some of our technology to help us with modeling. We have data scientists that are really adept at looking at the different flows and seeing how best we can drive the optimization and improvements in train size and improvements in resources. As I think about our technology strategy. Ed has been -- has done a pretty good job in talking about our customer-facing technology. You mentioned some of the stuff associated with inspections. We've also -- we're also rolling out new technology, a new terminal operating system within our intermodal terminals. We're frankly, 1 of the reasons that we moved to Atlanta is so that we can have better access to kind of tech savvy individuals. And you can sit in the Georgia Tech stadium and you can see our building with a big logo on it. So as -- might as well hang a banner that says work here. So that's the intent. And that's -- I think that's one of the ways in which we're going to continue to drive productivity. And as you think about how our customers, as Ed talked about, are looking for more of a B2C experience, technology is going to play a big role. And just the 2 things that we rolled out. and NSsites and the carbon calculator are really good examples of that.

We're just about end of time here, but maybe you can squeeze in 2 more quick ones. Ed, in terms of utility coal and stockpiles. It seems like they've been burned down quite a bit, and obviously, there's a lot of strong demand on the export side. Is this kind of a sneaky positive potentially in the back half of the year? Or is it still kind of the usual way you just have to kind of wait and see what weather does?

There's certainly a weather element to it and stockpiles are low. Everyone can do that math. We believe there's going to be some restocking going on, but it's going to be really up to the utilities in terms of are they going to sign those term contracts that are going to allow more production to come online, frankly. The situation around the world is going to elevate the price of coal because there's only so much of it. And that will be a headwind to competing with gas, but I guess the same headwinds are in that market, too. So we're trying to be extremely opportunistic when it comes to looking at the forward prospects for utility coal.

But it sounds like the utilities themselves are the ones going to have to pay up to get to...

They got to make some decisions.

Okay. Alan, maybe just to close out here. We've got the Investor Day coming up sometime in the second quarter. We go down to Atlanta, hopefully in person. You had one in 2019, Should that be kind of what we should expect as sort of a framework for here's how the year is going. Here's SPG and here's the 3-year plan that we've gotten in the details and support and obviously, the team to execute?

So right now, we are intently focused on restoring service and implementing top SPG. And so I've directed the team to focus on those aspects at the expense of preparing for Investor Day. Once we get service restored, once we get top SPG in place, we can hold an Investor Day in the second half of the year, that's going to provide a much richer and much more productive dialogue with our investors about where we're heading and the benefits of our service restoration and new operating plan.

Okay. Well, we'll see you in the back half for that one, too, again. Thanks, guys. Appreciate the time.

Thank you.

Thank you.