Harrison says his plans are working; certain shippers disagree

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CSX Corp. CEO E. Hunter Harrison makes a point during a presentation before the Surface Transportation Board on Wednesday. CSX's chief operating officer, Cindy Sanborn, is seated next to Harrison in the background.
R.G. Edmonson
WASHINGTON — Precision Scheduled Railroading has become the way the CSX Transportation system runs, E. Hunter Harrison tells the Surface Transportation board today — but he says there were still places where the plan needs fine tuning.

“I want to apologize to our valued shippers. Whatever problems we've had, we've had internally. We've made mistakes, but this is not a failure of Precision Scheduled Railroading. We're moving in the right direction,” Harrison told Acting STB Chair Ann Begeman and board member Deb Miller.

Harrison spoke first during a prolonged listening session that the STB called to allow shippers and shipper groups to air their grievances about the service CSX has delivered since Harrison took control of the railroad last March.

Certain shippers said they were happy that Harrison was present to hear their stories. Some said that service was slowly improving under Harrison's plan. But others said they had seen no changes, or that service has gotten worse.

“CSX seems to have a total disregard for customer service and business relations,” says William Scott, vice president of Cullum's Lumber Products of Allendale, S.C. “They seem to do what they want, when they want, regardless of the impact on your business.”

He told the board of ongoing problems of keeping enough rolling stock on hand to manage customers' orders. On some days, Cullum says, there are no cars, and on Fridays, CSX delivers a dozen cars so that CSX can collect the demurrage over the weekend.

Demurrage is a charge in the transportation industry that railroad car owners, or container owners, can charge for a shipper holding onto equipment beyond an allotted amount of time. A typical amount of “free” time on equipment can be 24 or 48 hours after delivery, including weekends and holidays.

Certain shippers complained that CSX was “ping-ponging” cars, moving them in and out of yards unnecessarily. Others say service inconsistencies have forced them to increase inventories of raw materials, and pay higher rates for trucking products to customers.

Brad Hildebrand, vice president with agricultural products company Cargill, said that service to some facilities has deteriorated because the number of switching crews has been reduced, and those who remain are required to do more than they can handle.

“Mr. Harrison has publicly stated that we the shippers must bear some pain and suffering for the changes that are being rolled out. Where in business today would a company put their customers through this pain to implement a supposedly new and improved operating model?” Hildebrand says.

“As a shipper [precision railroading] means having to accept less service and adjusting our operations to accommodate how CSX has structured their railroad,” Hildebrand says. “In a nutshell, [it] means having to do less with less.”

NEWSWIRETrains News Wire

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