On July 28, Norfolk Southern President and CEO Alan Shaw joined Morgan Brennan of CNBC’s Closing Bell Overtime. They discussed the company’s second quarter performance, economic outlook for the rest of 2023, and opportunities for growth.

Watch Shaw’s conversation with Brennan by clicking the image below:

Please see the following key excerpts from Shaw during the interview.

Q2 performance update

“Because of an improved service product, we’re starting to see volume growth, or volume improvements on Norfolk Southern. We see strength in the metals market and the automotive market. Anything related to construction right now is white hot, and we are also starting to see a little bit of strength in the domestic intermodal market. The consumer is a little bit stronger and more resilient than most folks had thought, and we may be though the inventory destocking phase. And, even in the second quarter, we took share away from truck in the international intermodal market.”

Economic outlook for Q3 and Q4

“We’ve got a great view into the U.S. economy. We’ve got about 5,000 customers, and we serve just about every major market there is… what we’re seeing is strength across the board somewhat in manufacturing. We’re seeing the truck market is still weak, and that is pressuring our volumes. That’s our primary form of competition.”

“The indicators are there for the potential for sequential growth for us moving into the second half of the year on the strength of our service product, and we’re really encouraged about how 2024 is lining up.”

“Now we’re having conversations with our customers about building Norfolk Southern into their long-term supply chain needs… and that’s the basically the foundation of our strategy and our vision.”

Growth opportunities

“There has been about 70 billion dollars’ worth of electric vehicle manufacturing production announced in North America, and about 30 percent of that is on Norfolk Southern. We were talking to the head of a European auto maker the other day, and they said if they want to participate in the EV market in the U.S. then they need to put production here.”

“There’s a lot of advantages that are driving the secular trend or onshoring in the United States: cheap and reliable energy, access to skilled labor, and a logistics infrastructure that’s already in place. And, a lot of that is happening in our service region, in the Southeast or the Midwest, which is why I’ve got a lot of confidence in the future of Norfolk Southern.”