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Csx Railroad

In: Business and Management

Submitted By scatterbone
Words 458
Pages 2
Economic, Technological, Political, and Sociocultural
Trends in strategic development

CSX is one of seven class 1 railroads operating in the United States. The railroad industry doesn’t compete in a real free market. They tend to be somewhat monopolistic due to their size and scope, and for this reason they are regulated by the government. But as with any other business, the state of the economy is a factor on their profitability. With a continuingly slow economy the railroad services will remain lower in demand than CSX would like. As with mostly all of the other transportation services, the cost of fuel is a major contributing factor towards CSX’s bottom line. CSX and much of the railroad industry have implemented and continue to implement new technology to help keep their costs down, which allows them to be more competitive. According to the American Association of State Highway and Transportation Officials, freight moved on trains would cost shippers an additional $70 billion on standard trucks. Fuel efficiency is not the only technological advancement being made in the railroad industry. As with many other businesses in the field of logistics, GPS and other wireless technologies continue to add efficiency. New technologies are being applied to increase safety. Over the last 5 years CSX has had a 40% improvement in the rate of train accidents. Being a regulated industry, railroad is at sometimes more than others, highly connected to the political environment. When the regulations are loosened, the rail industry tends to be much more profitable. The future of railroad regulation may be determined by who is the next president of the United States. It is assumed that if Obama gets re-elected, perhaps the industry might receive more regulations. If a Republican is elected, the current regulations might be loosened. Taxes are another political and economic force that will determine how CSX will perform over the coming years. There is a lot of talk going on in Washington, on both sides of the aisle, about lowering the corporate tax rate. Obama has mentioned drastically lowering the rates on corporations that make high- tech manufacturing jobs in the United States. This may be a very good opportunity for CSX. On a sociocultural level the economic, technological, and political environments are all combined together. In the long run, CSX and the rail industry in general, must be perceived by society to be a common good for all mankind. The rail industry could never get away with blowing black smoke from their locomotives in today’s environmental conscious society. Likewise it would be a good idea to not appear to be in cahoots with the politicians; the 99% would love nothing more than to increase regulations and taxes on a few billionaire train companies.

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