That’s what the East is all about. I’ve spent 35 of my 40 years in the East, either as a craft employee or as a leader, as a senior leader in the United States, a senior leader in Eastern Canada. And, I know networks, I know the industrial complex that we’re working in. It’s very similar to the density that I just converted in Mexico. So, I think we’ve got lots of work to do, but as I said in my prepared remarks, it’s a robust franchise with a talented team and the resources to deliver impressive results. We just have to properly execute.
Operator: Thank you. Our next question is from the line of Stephanie Moore with Jefferies. Please proceed with your question.
Stephanie Moore: Hi, good morning. Thank you. I appreciate the color, especially from you, John, and just the detailed plans in place around productivity initiatives and creating a PSR mindset across the organization. With this focus as a clear priority, what has been the customer response just given the changes underway? How does this translate into incremental volumes? Is there a natural lag from customers as they kind of get convinced of the changes happening? Any color there would be helpful. Thank you.
Alan H. Shaw: Ed, why don’t you address that?
Ed Elkins: Sure. And thank you, Stephanie, for the question. As I said earlier, our customers are encouraged by a couple of things. Number one, the velocity of change that they see happening in terms of service improvement. And, you think about our first quarter, we absorbed double-digit growth in our international book as well as low-single-digit growth in our domestic book, held serve on our merchandise freight and improved service throughout that time and into April. So, they’re encouraged. On the intermodal front, like I said, it’s really the best service in a generation that we’re delivering, and I have a lot of confidence that we’re going to continue to deliver that same level of service, which is only going to deliver more value for our customers.
On the merchandise side, in some cases, our customers are going to have to unwind alternatives that they’ve got in place, but you know what, having exceptional service that is reliable and really just a conveyor belt, that’s what they want. That’s what allows them to unwind those alternatives and come back to where the natural value for them is, which is Norfolk Southern.
Alan H. Shaw: I’ve had a number of customers approach me, Stephanie, over the last month since John was announced, encouraged by our approach, encouraged by our direction and supporting our strategy. Our customers, as John noted, in the East are familiar with John in large part. And, they’ve seen what he’s done wherever he’s been to enhance service and enhance safety and enhance productivity. And, that’s what customers are looking for. And Ed, I don’t know if you know it, but just this morning we got an e-mail from one of our largest customers thanking us for another excellent week of service.
Ed Elkins: I was just about to close that.
Alan H. Shaw: Well, how about that? Thank you for another week of excellent service.
John F. Orr: You know who you are out there. And we’ve had to make hard decisions. Ed and I have had to take very decisive decisions on car flows, on even on how customers are interacting with some of our service facilities. It is but having the work on the front-end, engaging with people, helping them understand what we’re doing, helping them understand where they fit into that, whether it’s union leaders, it’s regulatory leaders or our customers. That really, Stephanie, helps them understand what we’re doing, why we’re doing it and how we’re going to work together to create these standards.
Alan H. Shaw: And Stephanie, that is our strategy, is making sure that we bring along our customers and our employees and our regulators and our shareholders with us as we transform Norfolk Southern into a more profitable organization with a safe and service product that is poised for growth.
Operator: Our next question is from the line of Jordan Alliger with Goldman Sachs. Please proceed with your question.
Jordan Alliger: Hi, yes. Maybe this is in some ways a follow-up, but I’m just sort of curious, you have a pretty extensive list of things to do over the next six months and then 12 to 24 months. As you sort of come in, knowing what Norfolk had done already you getting there and the gap that’s been talked about, how much of this would you say is what you would call basic blocking and tackling versus real sea changes in operational scope, basically trying to assess your degree of confidence level and achieving and ticking all these things off and being able to hit the margin expectations in the coming years? Thanks.
John F. Orr: Well, I’ll tell you this, all across Canada, the U.S. and Mexico, I’ve been a change agent and an architect of PSR. I haven’t had the luxury of looking in the rearview mirror very often. And, so I don’t spend a lot of time looking at what could have been or what was rather than what the current situation is and how fast can we get to the desired state. Desired state is having closing the gap for sure, having an operation that is focused on asset management with speed and accuracy to reduce the cycle times, reduce the dwell times and drive out waste. So, that’s taking on an approach where it has a network overview. So, there’s a very strategic point of view on how do we create speed, accuracy by reducing dwell, increasing over the road performance, looking at long lead resources like locomotives and crews and how do we make them as productive as we can and then create resiliency and elasticity for network response like we’ve seen in Baltimore.
