Coal companies have different views of CSX Transportation service levels

RELATED TOPICS: COAL | CSX | SHIPPERS | REGULATION
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WASHINGTON — Coal producer Murray Energy has asked federal regulators to order CSX Transportation to provide adequate service from its mines in West Virginia and Illinois.

Murray’s complaint, filed last week but posted on the Surface Transportation Board website on Monday, came just two days after executives from coal miner Hallador Energy praised the railroad for improving its service.

Hallador said CSX service was subpar in April, May, and June as new CEO E. Hunter Harrison began making sweeping operational changes.

“We’ve been delighted that in July and now in August, the performance of the CSX has been much more precise and really, really quite good,” Hallador CEO Brent Bilsland said on the company’s quarterly earnings call last week.

Bilsland said his company, which operates mines in Indiana and Illinois, was trying to reduce costs, just like CSX.

“And if all of us are going to compete against natural gas, we’ve got to continue to strive to do so,” he said.

But Murray Energy took a dim view of cost-cutting on CSX, saying it comes at the expense of service.

Several Murray subsidiaries and affiliates — including Consolidation Coal, Foresight Coal Sales, Sugar Camp Energy, and Williamson Energy — were highly critical of CSX, particularly since Harrison arrived in March.

CSX failed to provide one out of every five coal trains Foresight requested and scheduled from January through June, according to Foresight’s complaint. In July, Foresight sought the assistance of the STB’s Rail Customer and Public Assistance Program, which quietly referees disputes between shippers and railroads.

“Regrettably, this process did not improve CSXT’s awful service,” Foresight said in its complaint.

During the first week of August, CSX service declined further as it failed to provide eight scheduled trains, “possibly in retaliation for Foresight’s decision to invoke the Board’s Rail Customer and Public Assistance Program,” Foresight wrote.

CSX has failed to provide trains and crews as scheduled, did not provide a sufficient number of trains, failed to pull loaded trains on schedule, delayed shipments in transit, and did not adequately communicate, the Murray coal companies said in their complaints to the STB.

“At this point, CSXT’s service in moving coal to Foresight’s customers can only be described as abysmal and a complete and total failure,” Foresight wrote.

Consolidated Coal claimed — inaccurately — that Harrison has a “well-publicized aversion to devoting any of CSXT's efforts and assets toward the shipment of coal.”

During CSX’s second-quarter earnings call in July, Harrison was asked about the future of coal and how it would affect the railroad’s service changes and capital investments.

“My personal view...is fossil fuels are dead. That’s a long-term view. It’s not going to happen overnight. It’s not going to be two or three years. But it’s going away, in my view,” Harrison said.

As a result, Harrison said CSX would not be making capital investments in its coal network, either in terms of new locomotives or track. CSX executives have made similar statements in recent years as coal business declined. But Harrison added that when the last hopper of coal is loaded in the U.S., he wants it to move on CSX rails.

Hours later, Murray Energy issued a news release critical of CSX and its service. CEO Robert Murray — a champion of coal who has battled environmental regulations and views climate change as a hoax — said CSX’s service has been poor for years and has only grown worse under Harrison.

“CSX strongly disagrees with Murray Energy’s statements and will respond fully and factually to any STB complaint,” spokesman Rob Doolittle says. “CSX will continue, as it has, to work with Murray Energy to provide rail service in accordance with CSX’s commitment to service excellence and compliance with regulatory obligations.”

NEWSWIRETrains News Wire

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