Fadi Chamoun: Thank you. Good morning. Question on the operating side a little bit, maybe, Jennifer, if you can help us understand what were these unique costs is in network congestion in 2022, so we can kind of play those numbers going forward. But the main question I got is, if I look at your operational productivity data in the fourth quarter and compare that to a couple of years ago when you were running well, locomotive productivity, car velocity are still 13%, 14% lower than they were and headcount is 5% higher, but volumes are flat. Do you have now the resources you think to get back to those levels that you have had a couple of years ago, like what are the really remaining things we need to do to get the network to spend a lot higher than it has been in the last few quarters?
Jennifer Hamann: Yeah. I wasn’t — I don’t know that I totally caught the first part of your question there, Fadi, but I think you were basically asking to quantify what the congestion costs were for our network for 2022. We have not quantified that other than we — when you look at our operating ratio and the degradation that we had on a year-over-year basis, 290 basis points, 50 basis points of that was a combination of PEB and fuel. The rest of that was inflation and congestion and probably fairly equally weighted between the two. So that’s how I would think about that. That is our opportunity certainly and that feeds through all of the lines. It feeds through wage inflation. Now some of that, obviously, is real. We have the PEB.
We know that’s real. But then it’s how we use the crews, and you have heard us talk about the fact that in 2022, we had higher recrew rates, we have higher borrow out costs, more deadhead and held away, more vans. Those all inflate those cost categories. Purchased services, as we were putting more locomotives into service, that inflated those costs on a year-over-year basis in addition to some of just the contractor inflation that we saw as all of our suppliers were faced with higher inflation, and you saw that come through. And then on the other line, we know we have opportunities there from a casualty standpoint. You heard us talk about casualty a couple of different times in 2022 and the higher cost that that brought to us. So those are all elements that we are now very much focused on attacking.
You asked are we right-sized yet. You have heard us say, we still are short crews in critical locations. We are still hiring.
Fadi Chamoun: Yeah.
Jennifer Hamann: So we still need to bring folks onto our network. That does two things that helps the — well, three things only helps improve our reliability, our fluidity, it helps us move more volumes and as we are able to hire folks in those critical locations, we then move the people that we have working there in terms of borrow outs back to their home location and that reduces our cost base as well, and you can improve your recrew rate. So a lot of different moving parts there, Fadi. You know our business isn’t just one element, but that’s how we are looking at it. Those are the things that impacted us in 2022 and that’s what we are looking to do in 2023.
