Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jon Langenfeld – Robert W. Baird & Co.
Jon Langenfeld – Robert W. Baird & Co.
Mike, when you think about kind of the path to get back to profitability, of the things that you can control and costs is obviously a big piece of it but what about the sales side and when should we expect to see some benefits from kind of your internal structural reorganization on the wholesale business?
Michael E. Uremovich
The wholesale business as you know Jon, that’s a derivative market to some extent so, that a lot of that demands on what the end user market is doing. Our ability to capture margins in that business obviously get squeezed when the end user market is as competitive as it has been. I don’t know about the visibility on the wholesale side particularly since so much of that is attributable to the automotive and the international side. Dan, I don’t know if you want to add anything to that?
Daniel W. Avramovich
I would just reiterate really that the biggest drop that we had in the wholesale side was driven by really two parties who decided to move a lot of their business directly with the railroads. If you kind of isolate kind of the rest of the IMC group in the wholesale channel, it was fairly consistent with what’s happened in the market.
Jon Langenfeld – Robert W. Baird & Co.
Then maybe a similar question on the retail intermodal services, what does it take to get that business internally to profitability? You struggled there and then the environment obviously hasn’t helped but with this recent signs of growth and you talked about the stabilization of pricing, can some of these other initiatives get you to profitability in that part of the business?
Brian C. Kane
I think we’re very pleased with our sales effort on our retail side as some of the numbers have indicated. We’ve added some new customers and as Mike pointed out in our customer service levels which is paramount for us, those numbers have been very good as well.
Michael E. Uremovich
I don’t think Jon in the past that we have typically broken out profitability by line of business. But, I can tell you that the retail business is profitable, we just don’t break out the specifics of the level of profitability. For us and for my point of view, folks should understand that retail performance in the intermodal market in this second quarter given what the competitive landscape looked like, I was very pleased with that both in terms of how we’re gaining share in that business and how we were able in large measure not to have the kinds of price declines that we’ve seen generally speaking. We had a 3% yield decline net of fuel which in this market place I think is really quite good.
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