Norfolk Southern Corp. Morgan Stanley's 14th Annual Laguna Conference

Off point from there, in our second quarter call, end of July, we were calling for a tailwind from fuel with respect to our operating ratio.

Yep. Right? We thought we had seen the peak in the May timeframe.

Prices were coming down, and we had a pretty favorable forward fuel curve. Well, two months later, that's obviously wrong. What we've seen is prices continue to go up.

Yep. We've got, based on the curve that came out last week, just really elevated prices for the remainder of the year.

That's a significant headwind for us. Like I said, we were thinking we'd be at a tailwind. Now we're a headwind. Really, just to put that in a order of magnitude, that's like 250 basis points on our operating ratio of headwind, again, just from where we were two months ago. We were calling for a sequential, maybe better than seasonal sequential improvement from second to third. Now we actually think we're going to be a little bit worse than seasonal performance really due to that.

Got it. what's happening with fuel.

I think we are seeing some freight Okay that is coming to us because of the extraordinary costs they're experiencing on the truck side.

It's not just on intermodal.

Sure. We're seeing it across many of our merchandise markets, where the, what I would call the freight is not rail centric or truck centric, but could go either way.

Yep. Coiled steel, for example, or various paper products, consumer products, even lumber.

Yep. Which is not an upmarket.

Yep But we're actually seeing, I think, some share gain there because of what's happening with fuel.

It's just pulling freight off the road. Talking about fuel and we talk about $6 diesel, but out here it's $8 diesel. If you noticed on the way in.