Sean Pelkey : Yeah. Thanks, Scott. I can take a stab at it here. So I think fourth quarter, let’s remember, we’ve got the dynamic of some work moving off of capital and going to OE. That’s normal. We’ll typically see a little bit of a step-up that reverses back in Q1. We probably had, call it, $30 million, $35 million of costs in the quarter that were somewhat unusual items that we mentioned but just as a reminder, we had a true-up on vacation and sick leave, that was about $15 million, as I just mentioned. We had another $10 million on depreciation true-up at the end of the year there for that, that’s not going to recur. And then the Livingston, Kentucky derailment was about $10 million as well. So you kind of add all that together, those costs roll off as we go into the first quarter.
And then we built some momentum. I mean, as Mike said, he’s already looked at the train plan. He’s reduced some starts driving tonnage up. That’s going to drive fuel efficiency as well, taking some locomotives out. We’re not paying maintenance on those locomotives. So we’re certainly building some momentum. I think that’s going to gradually add in as we go through the year. And that’s why I feel really good about where the incrementals are going to be second half of the year.
Operator: Your next question comes from the line of Tom Wadewitz from UBS. Please go ahead. Your line is open.
Tom Wadewitz : Yeah, good afternoon. Wanted to ask, I think it’s probably for Kevin, just a little bit on the revenue side. You’ve had a pretty meaningful storage revenue headwind in 2023. And I think you feel surcharge can be an impact too. How do you think about those two factors as you go in ’24? Are they kind of neutral? Or is there still some lingering headwind? And then in terms of price, what kind of a price assumption do you have? Are you thinking stable pricing versus what we got in ’23? Or is it kind of up or down? Thank you.
Sean Pelkey : Yeah. So just on the first part of the question, Tom, I’ll answer that. On the other revenue piece, we’re, I would go ahead and model something like $130 million a quarter, which is kind of what we’ve been running at the second half of this year. Obviously, you do the math on that, it will be a big headwind in Q1 about, call it, $50 million plus. That’s why the comps are tougher in Q1 and then a little less in Q2 before we get to the normalized rate. And then on fuel, don’t forget, we had a pretty favorable lag impact in the first half of last year to the tune of almost $70 million across the first and second quarter. So prices have come down a little bit. We are expecting somewhat favorable lag in Q1 of this year, but it’s still be a year-over-year headwind. So those are two reasons why we’re thinking about more sequential momentum in the first quarter as opposed to being able to deliver growth until we get to the second half of the year.
Kevin Boone : Yeah. And then on pricing, I think, as we talked about all last year, we had to react to a much higher inflation environment that we all experienced, quite frankly. And, you’ll see a lot of that carryover, right? These contracts are negotiated some on a multiyear period, some year-over-year. We know how to negotiate every year. So it’s fair to say our expectation coming into ’24 is cost inflation for our business will be a little bit lower. So I would expect that number to come down when we have our conversations but still very healthy when you look at historical rates, what we were able to achieve. And obviously, that’s an important part of our revenue growth story is both volume balanced approach between volume and price.
Operator: Your next question comes from the line of Brandon Oglenski from Barclays. Please go ahead. Your line is open.
Brandon Oglenski : Hey, good evening, everyone. Thanks for taking my question. Mike, I wonder if you could speak more specifically to labor efficiency this year, especially in reference to Kevin’s remarks that you’re going to have new merchandise business bringing on about a point of volume additionally. So how are you planning for headcount? And what are the opportunities for efficiency there? Thank you.
Mike Cory : Hey, Brandon, I hope you’re well. Look, I’m not going to say at this stage that we can add incremental volume without headcount. It depends on what it is and where it’s at. But I’m very comfortable with the results we had in a run rate of more train size. And that obviously reduces the impact on the headcount. We’ve got areas that we just haven’t got to in my time yet. And I think the — and this isn’t just about trade and size, but we really, we have a very customer-intensive network. And so we have a lot of yards and locals and first of all, we’re looking to button down and make the service reliable. And with the head count we have right now, we see that we’re able to do it. So that leads us to know that we can do better.
