One of the nation's largest railroads, CSX (CSX -0.51%) just posted 18% year-over-year revenue growth in the third quarter, and anticipates a solid Q4. The stock currently trades more than 26% below its all-time high from March of this year. Is now the time to buy the dip on CSX?

With the global railroad industry anticipated to grow more than 4% annually through the end of the decade, let's take a closer look at this centuries-old operation and find out if the stock is worth buying.

CSX gets a new CEO

From horse-drawn rail cars of the 1800s to modern-age electric locomotives, CSX has transported goods and people across America for almost 200 years. Based in Jacksonville, Florida, the railroad employs roughly 25,000 people throughout its network.

CSX serves industries ranging from energy, industrial, construction, agricultural, and consumer products. Primarily a freight operator, CSX also provides services and infrastructure for a relatively small number of daily passenger trains. The railroad's network covers every major city in the eastern U.S., where the bulk of America's population resides.

In a momentous update last month, CSX announced the hiring of new CEO Joseph Hinrichs, former President of Ford Motor Company's automotive division. A previous customer of CSX's, Hinrichs hopes his insights will help improve service and corporate culture. CSX's departing CEO, Jim Foote, will stay on as an advisor through March of next year.

Rather than trying to reinvent the wheel, Hinrichs' back-to-basics strategy seeks to improve upon what CSX is already doing. By delivering better service, he hopes to leverage the company's existing operating model to scale operations. Hinrichs has spent his first weeks touring CSX's vast railroad system, visiting facilities, and getting to know employees, customers, and union leaders.

With growth in mind, Hinrichs' holistic approach is centered upon improving CSX's service and reliability, which in turn should retain and attract new business organically. As he put it during the company's Q3 earnings call, more customers want to do business "...when you deliver a better service and more reliable, predictable service."

Challenges and opportunities

CSX's struggles in the third quarter stemmed mainly from crew shortages, which severely impacted the railroad's ability to deliver trains on time. On-time departures dropped by 13% compared to last year, while on-time arrivals fell by 16%.

As the company restores its crews, Vice President of Operations Jamie Boychuk claims that service is improving. Still "a few hundred people" short, Boychuk affirmed that already train speeds and capacities are picking up. CSX aims to hire 7,000 active train crew members, and has so far picked up more than 6,800 -- with 730 conductors in training. Once all hires are up to speed, the company expects to see improvements in both volume and timeliness.

A labor agreement between American railroad companies and 12 rail unions also hangs in the balance. If all 12 unions don't ratify the deal, which provides pay raises and paid sick time for rail workers, negotiations could deteriorate into an industrywide strike. Hinrichs has already attempted to ease relations with union leaders, and remains optimistic that all 12 unions will approve their contracts.

Recovery on the horizon

Despite staffing strains and union concerns, CSX delivered a strong third quarter overall, enjoying a 2% increase in volumes while clinching over 18% more revenue and almost 15% more profit than Q3 of 2021.

Undeterred by high inflation and recession fears, CSX reaffirmed its financial outlook, anticipating volume increases as staffing is replenished and service improves. Determined to raise volumes while keeping operating costs down, Hinrichs has encouraged his new colleagues "to look at things from a customer perspective" to achieve better service and accountability. He also aims to improve relations between laborers and CSX's management team, applying his wealth of experience with Ford.

Looking ahead, Boychuk has revised the company's plan to navigate future economic downturns and declines in traffic. Rather than furloughing employees as the company has done in the past, CSX will better retain its workforce and avoid crew deficit issues like what the railroad currently faces. According to Boychuk, "We are going to be prepared to handle all the traffic that comes back at us."

Railroad is by far the most economical and sustainable way to transport heavy materials such as chemicals, metal, coal, grain, and other goods on land. A major player in a growing railway industry, if CSX can recover its workforce and streamline operations, this railroad stock could recover quickly and keep chugging on.