Shippers: CSX is making uneven progress at improving service

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WASHINGTON — Rail service, like beauty, is in the eye of the beholder.

How CSX Transportation’s service stacks up in the wake this summer’s operational challenges depends on whom you ask.

Nearly two-thirds of shippers at the North East Association of Rail Shippers conference in Pittsburgh on Sept. 26 to 28 said CSX service is improving, according to a survey by Cowen & Co. But 97 percent of shippers rated the railroad’s service as fair or poor. And 20 percent said CSX service was poor and only growing worse.

A trio of coal producers has told federal regulators that after initial service hiccups, CSX’s service has improved under CEO E. Hunter Harrison’s precision scheduled railroading operating model.

Warrior Met Coal told the Surface Transportation Board last week that CSX now provides faster transit times and reduced dwell times for coal moving from its mine in Brookwood, Ala., to the Port of Mobile at Mobile, Ala.

Alpha Natural Resources, which mines thermal and metallurgical coal in central Appalachia, told federal regulators this week that CSX car supply and on-time performance was very good in September.

“We fully support CSX's efforts to improve service under its new service model and look forward to CSX meeting our needs for both our domestic and international customers,” Alpha CEO David Stetson wrote.

And Blackhawk Mining applauded CSX’s service.

“We hope that it will provide economic efficiencies that help coal be more competitive in the U.S. and international markets,” wrote Robert Bennett, Blackhawk’s chief commercial officer.

Sand-Rock Transit, an Atlanta-area company that supplies ready-mix concrete companies with aggregates, seems to be a textbook example of the transition to precision scheduled railroading, as transit times have been cut in half.

The company was using two 53-car unit hopper trains to deliver aggregates from Alabama to its facilities in Atlanta and Cartersville, Ga. It took eight days for the cars to cycle back and forth.

Then in April, CSX shifted Sand-Rock’s traffic out of unit train service and into the general merchandise network.

“Service deteriorated immediately. Car turns doubled and our inventories disappeared,” Sand-Rock President Randolph Willingham wrote to the STB.

CSX was responsive, Willingham wrote, and now the railroad’s service is better than it’s been in 30 years.

“I would never [have] dreamed that the new operating plan could result in car turns of as low as four days. Our inventories are full and now we have need for more sales to keep up with CSX,” Willingham wrote.

Harrison has shifted unit train traffic — from finished vehicles to grain — into the carload network in order to build the density required to run longer trains and to operate them every day. This balances the network and can reduce car cycle times, reducing costs for both the railroad and its customers.

Clearly that’s not yet happening everywhere on the railroad.

Total Petrochemicals and Refining USA said transit times and variability have increased substantially for its biggest customers who are captive to CSX. Shipments to Total’s top 10 customers on the railroad are taking 39 percent longer to arrive, while variability is up 50 percent. Transit times are up 69 percent for one key customer, Total says, while variability is up 150 percent.

“It is fairly apparent that we, and our customers, are at the complete mercy of the CSXT while they experiment on service changes,” Paul H. Colonna, vice president of polymers at Total, wrote to the STB.

CSX’s efforts to relieve congestion have caused loads to ping-pong.

“We have seen loaded rail cars travel into our customers' local area, and then move hundreds of miles away, before returning back to the same area,” Colonna wrote. “The effect on dwell time and average speed with these moves may appear to be positive for CSXT, but we are left unable to meet our customers' needs or explain it.”

Tight capacity in the trucking industry has prevented Total from shifting traffic away from CSX.

The story is the same for Cristal USA, a titanium-dioxide shipper based in Ashtabula, Ohio. Transit times are up 18 to 30 percent this year, and local service has been affected by the closure of CSX’s yard in Ashtabula, Cristal Distribution Manager Lisa Powers told the STB.

CSX says its service is on the mend after widespread disruptions in July and August.

“We’re back on our feet and committed to fully implementing our new operating model,” Harrison said in a Sept. 21 statement. “We remain confident that precision scheduled railroading will provide lasting benefits to our customers, our employees, and our shareholders.”
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