Ed Elkins: I think there is — this is Ed, by the way. There is a lot of uncertainty around what’s going to happen here in the first half of the year. I think the Street has baked a lot of expectations around Fed actions and we’ll see where that goes. But frankly, you look at first quarter and we see pretty sedate volume opportunities here in the first quarter, and the recent weather events for the entire industry has kind of confirmed that. But then, we see a steady progression of volume improvement throughout the year. And I think volume improvement will probably lead the parade, so to speak, in terms of revenue and yield improvement for us. But we’re pretty confident we might be conservative around coal price, but that’s, I think, the right thing to do for ourselves as well as for the rest of the industry.
Jon Chappell: Okay. Thank you, Ed.
Operator: Thank you. Our next question comes in line of Tom Wadewitz with UBS. Please proceed with your question.
Tom Wadewitz: Yeah, good morning. I want to ask you one granular one and then kind of a higher level one. So, I guess on the granular question, for Paul, should we think about with a fairly muted volume backdrop that train starts would come down in ’24? Or are you thinking kind of, hey, the schedule is set and we’ll keep that where it is? And then, the higher-level question, I think when investors look at Norfolk, they say, okay, there is a potential idiosyncratic opportunity to run the system better. Maybe that runs on its own regardless of freight market. But I don’t know that that’s clear. So, should we look at it as more of a kind of idio improvement story or is this really a freight market, freight cycle leverage story, right, that it is really — when the freight market improves, if that second half, if that’s ’25, then you’re just really well positioned for that.
So, I think just trying to figure out what’s really the right way to look at the Norfolk story. Thank you.
Alan Shaw: Paul, why don’t you address the first question? I’ll take the second.
Paul Duncan: Yeah, absolutely, Tom, thanks for the question. So, we think about it not just as train starts, but overall T&E productivity, it’s all about getting the most from our crews. And we’re going to see that improve through not only what we’ve seen here over the past several weeks for improvements in network velocity, but running more discipline to plan and layering down initiatives. We know running more discipline to plan is already starting to show itself in reductions in T&E expense. You’ve seen it in the productivity measures from the slides. We’re going to make further iterations to the plan as we get more disciplined, particularly in our merchandise network. And that’s only going to drive improvements in GTMs per horsepower, but also on the T&E side.
We’ve got a number of initiatives beyond just running the plan more disciplined and seeing that cost come out again that we’re layering on. We’ve got pool transitions taking place. So, as we have gotten more fluid and more consistent, we have transitioned more short pool runs to long pool runs, again because we’ve got greater consistency and velocity in the network that has productivity benefits. We have put more towards assigned service from a T&E standpoint. That means we’ve got assigned crew pools and turns that reduces hotels, van expenses, has a quality-of-life benefit. We are going to roll out predictable work scheduling this year on our conductors — or with our conductor, excuse me. More than 80% of our schedule — our network is scheduled, meaning as we layer in predictable work scheduling, we will see a benefit in reductions in displacement time.
We’ve got a number of board consolidation initiatives that are taking place, and we’re driving accountabilities to run lean and two plan inside of our merchandise yard. So that all translates into we’re going to see train length on the merchandise side. We’ve got line of sight on some improvements we can make there. Not only through further iterations of the plan, we’ve also got some investments planned this year in some of our major merch channels that are going to drive productivity and train length. Intermodal train length went up in Q4 as a direct result of us not only delivering great service, but customers rewarding us with business. And again, we’re going to continue to work on that. And from a bulk standpoint, you’ve heard us talk about the various longer-term initiatives we have with our customers to invest in facilities, particularly in our [indiscernible] network.
Several elevators are investing, and we expect to really see the benefits as those investments come to play.
Alan Shaw: And Tom, to your second question, as we’ve gone through 2023 and we’ve made the necessary improvements in safety, in service, and attractive growth, we can really start to focus on productivity in our own plan and execution of that plan. That provides benefit as well. And then, our whole strategy is about outperforming during the upcycle. Our franchise is built to outperform during the upcycle. You’ve seen us recover from network disruptions much faster than we have in the past. So, there’s a proof point as well. We’re not calling when that upcycle occurs, but when it does, we do believe that we will outperform, and we will attract new business with high incremental margins. So, it’s improving our own operations and executability with the plan as we can now narrow our focus on really operating to the plan and driving efficiencies and then participating and outperforming during the upcycle.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Brian Ossenbeck with JPMorgan. Please proceed with your question.
