Earlier this year, CSX hired a new a new CEO – Hunter Harrison to help improve the railroad giant’s operations and financial situation. Mr. Harrison is a long-time rail veteran having served in a variety of roles at the nation’s railroads.
His efficiency strategy is to focus on speeding up rail shipments by “increasing velocity” of rail shipments. In other words, he improves performance and speed by not stopping, especially for small and irregular train sets. Instead, the concept is to hook up the railcars at point A and move them to point B with as few stops as possible, and when the train does stop, it will only stop to pick up long segments of cars at one time. Unfortunately for most rail shippers, they cannot assemble these long train sets. The result is less service and higher prices for most train customers.
As CSX implemented its new performance strategy, rail customers served by CSX experienced a lack of cars and service. In many cases, service is effectively cut off leaving the rail customer without an efficient mode of transportation for their products to get to markets including agricultural products, chemicals, finished goods, and scrap.
After many complaints from rail customers, the Surface Transportation Board (STB) issued a strongly-worded letter to CSX indicating that their service had dramatically declined and requested answers. This was a highly unusual move by the STB especially as it lacks a quorum. However, all the commissioners agreed to sign the letter. Following the STB letter, the STB issued a notice to hold a “Listening Session” where CSX and rail shippers could testify in front of the commissioners and the public. Unfortunately, due to the recent hurricanes, the “Listening Session” has been postponed.
In the meantime, CSX has conducted an outreach campaign to talk with its customers about how it intends to improve performance. Hunter Harrison, the CSX CEO has publically responded to the STB claiming the disruptions were just part of the process of improving the rail service.
ISRI has voiced its member’s complaints to key Members of Congress which has led to Congressional inquiries directed at CSX. Other rail carriers have also voiced complaints over service disruptions caused by CSX’s service ‘improvements’ that have resulted in their own service problems.
Please contact Billy Johnson for further details.