CSX CEO explains how a new business model brought efficiency to the railroad company

The updated system eliminated unnecessary logistics, such as switching boxcars at inopportune times, he added.

The transition to the new business model, which was initiated by the late former CEO Hunter Harrison in early 2017, intended to run a leaner operation with longer trains on tighter schedules. The changes were put in motion after Mantle Ridge, the activist hedge fund led by Paul Hilal, started a position in the company that year.

CSX topped profit expectations in its third quarter ended September. Cost cuts helped the hauler offset lower coal and intermodal shipment volumes. The roughly 10% drop in CSX's intermodal unit, where the company moves cargo using multiple modes of transportation, during the quarter can be attributed to the U.S.-China trade war's impact on rail freight volumes.

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