CSX Corp. (CSX) signaled Tuesday that it's planning no let-up in its push to raise core prices despite a continued steep slide in freight volume, aiming for a 2010 core rate increase that exceeds inflation.

Chief Executive Michael Ward acknowledged that the Jacksonville, Fla.-based railroad has forgone some new business - although he characterized the amount as relatively small - as it has raised core prices an average 6.6% in the second quarter and 6.5% in the first quarter. Core prices don't include fuel surcharges.

The transport sector overall has experienced a precipitous decline in freight volume since late last year as the ongoing recession has sapped demand for all manner of goods. CSX and other top railroads have had success pushing through core rate increases anyway, largely because of the perceived cost-effectiveness of rail over other types of transport.

CSX said Tuesday that it expects its volume to drop by a double-digit percentage rate again in the third quarter. But it said volume in most markets appears to be "leveling," so the overall decline likely won't be as steep as the second-quarter's 21% drop.

Regardless, the company predicted its 2009 core price increase will come in ahead of a previously forecast full-year rise of 5% to 6%, based on the success of the first half. CSX declined to reveal a precise target for 2010 but said the increase should exceed inflation.

CSX still has "room to take those prices up" because of "the value we are creating versus the other modes" of freight transport, Ward said in an interview.

He said he expects the downturn in freight volume to be a key point raised by shippers during the "give and take" of 2010 contract negotiations, the bulk of which won't begin until late in the third quarter. But Ward said he's optimistic shippers will continue to view rail transport as the most economical option.

CSX and other top railroads have contended that their rate increases are justified because of the large investments needed to maintain rail networks and because rail prices remain below 1980 levels when adjusted for inflation.

CSX shares climbed 6.4%, or $2.10, to $34.63 in recent trading.

Late Monday, the railroad reported second-quarter earnings of $308 million, or 78 cents a share, down from $385 million, or 93 cents a share, a year earlier. Excluding discontinued operations related to the struggling Greenbrier Resort, earnings fell to 72 cents a share from 95 cents a share.

Revenue fell 25% to $2.2 billion amid the 21% drop in volume.

On a separate topic, Ward said Tuesday that rail velocities through Chicago appear to have climbed since Canadian National Railway Co. (CNI) bought the Elgin Joliet & Eastern Railway from U.S. Steel (X).

Still, Ward noted that rail congestion in Chicago, the busiest rail hub in the world, has eased a bit because of lower industry freight volume overall, and because of an ongoing public-private Chicago mobility project known as CREATE.

-By Bob Sechler, Dow Jones Newswires; 512-394-0285; bob.sechler@dowjones.com