CSX service is on upswing, CEO Jim Foote tells federal regulators

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CSX Transportation CEO James M. Foote tells the Surface Transportation Board that the eastern railroad's service is rebounding. CLICK ON THE IMAGE TO DOWNLOAD FOOTE'S LETTER.
JACKSONVILLE, Fla. — With its trains running faster and cars spending less time in yards, CSX Transportation is now focusing on improving yard and local service, CEO Jim Foote told federal regulators this week.

Foote’s Jan. 3 letter to the Surface Transportation Board was in response to the board’s Dec. 14 letter asking the railroad to explain shipper complaints of persistent service problems, particularly for local “last mile” service.

“With terminals and line-of-road in a fluid state, and velocity and dwell substantially improved, we are targeting enhancements in yards, local service, and efficient switching,” Foote wrote. “Accordingly, we expect ongoing improvement in our local service measurements concurrent with other performance measures.”

The implementation of Precision Scheduled Railroading comes in two phases, Foote said. The first, under the late CEO E. Hunter Harrison, involved sweeping operational changes such as conversion of hump yards to flat switching facilities, moving many unit train carloads into merchandise service, and running a balanced train plan.

The second phase, Foote said, involves daily execution of the operating plan and is well under way.

“We have outstanding railroaders who are working as a team with the clear focus of executing,” Precision Scheduled Railroading, he wrote.

Foote highlighted CSX’s improved performance metrics, which he says have created a virtuous cycle: Faster trains, combined with more efficient yard operations, lead to more on-time originations. And that means fewer locomotives and cars are needed to handle the same amount of freight.

“In short, what you have is a better-run railroad,” Foote wrote.

Foote says CSX also has improved car-order fulfillment, expects to begin testing end-to-end trip plans for every carload by the end of March, and that he is committed to listening to customers and communicating with them regularly.

Local service metrics, including car-order fulfillment, currently top those from 2016.

CSX does not foresee making significant operational changes this year, Foote says.

The board’s letter — which asked CSX to provide additional metrics regarding local service – was prompted by a Dec. 6 shipper meeting with commissioners Ann Begeman and Deb Miller. The Rail Customer Coalition, an umbrella organization representing several dozen trade groups, arranged the meeting, which also included representation from the National Industrial Transportation League, other trade associations, and individual shippers.

A merchandise shipper with extensive operations in the East says his company has been playing whack-a-mole with CSX: Service problems are nearly fixed in some areas, only to pop up in others.

“We are better in Florida and New York now but issues are in the Carolinas as we speak,” the shipper says. “So I like the new metrics, especially around door-to-door and car fulfillment.”

Another merchandise shipper said it is not seeing the faster, more reliable service that CSX says it’s providing with Precision Scheduled Railroading.

“Our cycle times are still longer today than they were a year ago,” the shipper says. “I suspect this may simply be their new normal and longer transit times are something we have to get used to. We're actually planning to add some cars back into our fleet in the first quarter of 2018 to address this.”

Shippers also say that CSX is reducing the frequency of local switching, although CSX also reduced the frequency of local service a couple of years ago as part of cost-cutting initiated under then-CEO Michael Ward.

“CSX is being run for the benefit of Wall Street now and not Main Street,” one shipper says.

But others say they are beginning to see faster, more efficient service. Operations remain smooth on CSX’s western corridor, they note, despite operating plan changes last month that significantly curtailed yard operations in Evansville, Ind.
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