Businessmodel of CSX

Customer Segments

CSX has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at firms across industries that need to transport goods. That said, its customers can most commonly be found in the energy, industrial, construction, agricultural, and consumer products sectors.

Value Proposition

CSX offers two primary value propositions: risk reduction and brand/status.

The company reduces risk through high safety and security standards. It maintains stringent policies for shipping hazardous materials. Also, it extensively trains customers, employees, and short-line partners in order to ensure safe operations. Lastly, it operates the Public Safety & Environment Management System (PSEMS), which provides a framework for the programs, procedures, and processes needed to fulfill its commitments in safety, security, environment, health, and outreach.

The company has established a strong brand due to its success. It bills itself as one of the leading providers of rail-based freight transportation in North America. Its network spans 23 states, the District of Columbia, and two Canadian provinces. The network also has access to more than 70 ocean, river, and lake port terminals along the Atlantic and Gulf Coasts, the Mississippi River, the Great Lakes and the St. Lawrence Seaway. It connects every major metropolitan area in the eastern U.S. It serves some of the largest population centers in the U.S., and almost two-thirds of Americans live within its service territory. Lastly, it has won a number of honors, including the following:

• Recognition on Corporate Responsibility Magazine’s Best Corporate Citizens List
• The John H. Chafee Environmental Excellence Award from the Association of American Railroads
• An EPA Climate Leadership Award from the S. Environmental Protection Agency ### Channels

CSX’s main channel is its direct sales team. The company promotes its offering through its website, social media pages, sports sponsorships, and participation in conferences.

Customer Relationships

CSX’s customer relationship is primarily of a personal assistance nature. It assists customers by transporting their goods while maintaining limited interactions with them. There is also a self-service component. The company’s website features a “Resources“ section that includes the following:

• A “carbon calculator” that enables clients to see the amount of carbon dioxide saved when goods are moved on its trains
• A “rail mileage look-up tool” that enables clients to submit origin/destination combinations and retrieve rail mileage
• A “junction look-up tool” that enables clients to identify the most efficient junctions for exchanging traffic with CSX’s connecting carriers ### Key Activities

CSX’s business model entails designing, developing, and delivering its transportation services to customers.

Key Partners

CSX’s key partners are the suppliers that provide it with the materials and services it needs to run its railroads and serve its clients. The company also forms a number of public-private partnerships with government entities for special initiatives, such as the National Gateway, a multi-year rail infrastructure project.

Key Resources

CSX’s main resources are its physical resources. These include its 21,000 route mile rail network that serves 23 states, its over 84,000 rail cars, and its nearly 4,500 locomotives. It also maintains important human resources in the form of the employees that manage and maintain its vehicles.

Cost Structure

CSX has a cost-driven structure, aiming to minimize expenses through significant automation. Its biggest cost driver is labor/fringe expenses, a variable cost. Other major drivers are in the areas of materials/supplies and fuel, both variable costs.

Revenue Streams

CSX has one revenue stream: revenues it generates for fees paid by customers for the freight transportation services and associated services it provides.