STB reschedules listening session for CSX service issues

Earlier this week, the Department of Transportation’s Surface Transportation Board (STB) said the public listening session for CSX Transportation’s recent service rail service issues has been rescheduled for Wednesday, October 11. The session was originally scheduled for Monday, September 11, but was rescheduled due to Hurricane Irma.

STB officials said the objective of the listening session is to allow it to hear from CSX “about its service issues and recovery efforts, as well as hear from rail shippers and other stakeholders affected by service disruptions.” It added that it has directed CSX to appear at the listening session and also encouraged impacted shippers and other railroads to attend.

STB said that going back to mid-July it has “been closely monitoring CSX’s performance after widespread service problems resulted from CSX’s implementation of changes to its operating plan.”

And it added that as part of the STB’s ongoing efforts to ensure reliable rail service is restored as quickly as possible, STB is holding weekly calls with CSX senior management and receiving weekly service metrics from CSX, adding that it has been updating Congressional oversight committees and other stakeholders informed of its actions and continue to transparently address CSX’s service reliability issues so that shippers, carriers, and interested stakeholders are up to date.

As previously reported, a July 27 letter to CSX’s Harrison from STB leadership, including STB Acting Chairman Ann Begeman, STB Vice Chairman Daniel Elliott, and Board Member Deb Miller expressed their concerns over on a number of informal complaints from both CSX customers and railroad industry stakeholders in regards to various service issues, including: transit times increasing significantly and/or becoming unpredictable; loaded and empty railcars sitting for days at yards; switching operations becoming inconsistent and unreliable; car routings becoming circuitous and inefficient; CSX customer service being unable to provide meaningful assistance; and slowing train speed and increasing dwell time along with numbers of cars online.

These CSX service-related issues stem from the implementation of significant changes to CSX’ operating plan, including Harrison’s longstanding practice of precision railroading, which he deployed in previous top executives at both CP and CN. Precision railroading requires cargo to be ready when rail cars arrive for loading or risk being left behind.

Other operational initiatives cited by Harrison since he took over at CSX in March include idling around 550 locomotives and 25,000 railcars and converting hump yards to flat-switching yards that he maintains are more efficient.

CSX CFO Frank Lonegro said at the Cowen and Company 10th Annual Global Transportation Conference in Boston earlier this month that the CSX of the Hunter Harrison era is still under construction.

“The fundamental building blocks are in place to enable us to provide two very important things,” he said. “The first is consistent high levels of service for our customers, and the second is a radically improved financial trajectory for our owners.

The rollout of CSX’s PSR plan, said Lonegro has been equal parts intense, aggressive, and rapid, with a keen focus on converting to the PSR model, with an eye on refinement and execution.

“As our execution continues to improve, our service for our customers will also improve, as will our volumes and equipment turns,” he stated. “During July and August, we did experience some transitional issues and you saw those flow through in volume numbers and service measures that you see on a weekly basis. Two untimely mainline derailments also compromised our service recovery. Rest assured, the long term vision to achieve what Hunter has achieved at other railroads is still intact at CSX.”

And the changes Harrison is making at CSX are consistent with changes he has made at other railroads, explained Lonegro, in the form of restoring balance to the network, and redesigning building blocks such as the blocking plan, the train plan, and the terminal plan and are designed to bring a competitive service offering to its customers.

While CSX is full underway in its efforts to augment service, some shippers continue to voice their dissatisfaction to date.

“Service is still very unreliable with cars off-route and sitting,” said Janet Breese, distribution specialist for logistics at Marietta, Ga.-based AkzoNobel Pulp and Performance Chemicals, in a recent interview. “In addition, several diversions I’ve entered in August – which were accepted by CSX – and then summarily ignored.  This has caused one of our productions units to make adjustments to stay in operation.”

Breese noted that along with CSX service still not improved, AzkoNobel has had cars returning from Kentucky to Quebec that they took to Chicago and were delayed over the local lines for well over a week, explaining that the move to Chicago was supposed to allow the cars to move more quickly. 

And at last week’s 2017 FTR Transportation Conference in Indianapolis, various rail and intermodal stakeholders indicated that CSX’s service continues to lag, leaving room for improvement, which has also seen some share shift to truckload to circumvent ongoing CSX service issues.