CSX Transportation may limit line sales to those already on the block

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JamesFoote
Jim Foote, CSX Transportation CEO
CSX Corp.
PALM BEACH, Fla. — CSX Transportation may limit line sales to the routes that it currently has out to bid.

“We’re going to be very, very, very careful before we would ever sell anything,” CEO Jim Foote told an investor conference on Tuesday.

“We’re not interested in exiting markets,” he says. “We’re interested in getting into markets and growing this business.”

Spinning off routes used to be a way for railroads to continue to provide service on marginal routes due to short lines’ lower labor costs, Foote says. That’s not necessarily true anymore as Class I railroad systems have reduced their costs and become much more efficient, he says.

Foote also contends that short line traffic growth on routes CSX has spun off over the years has been nil. CSX aims to grow business across its system itself rather than through new short lines, Foote says.

CSX is in the second year of a three-year plan that called for $300 million in line sales, Foote notes.

Former CEO E. Hunter Harrison, who died in December 2017, ordered a review of the railroad’s low-density routes, which totaled about 8,000 miles. At the time, officials said the railroad might ultimately sell or lease up to 4,500 miles of trackage that was not considered part of the core network.

But now CSX seems inclined to hang on to more trackage despite the intense interest in most of the routes the railroad has put up for sale.

CSX has sold three major track segments to date. They include Watco’s 126-mile Decatur & Eastern Illinois, 373 miles of Florida Panhandle trackage to RailUSA’s Florida Gulf & Atlantic, and Canadian National’s pending acquisition of the 236-mile Massena Line linking Syracuse, N.Y., and Montreal.

Remaining routes out to bid include about 415 miles of trackage:
• The Baldwinsville Subdivision branch line near Syracuse.
• Branches in West Albany and Rensselaer, N.Y.
• Cumberland Valley feeder lines extending east of Corbin, Ky.
• Eastern North Carolina branches terminating in Grangers and Plymouth, N.C.
• The Marietta Subdivision extending north out of Parkersburg, W.Va.

Separately, CSX in 2018 sold 176 miles of railroad in Alabama and Georgia to OmniTrax, which had previously leased and operated the lines as Alabama & Tennessee Railway and the Fulton County Railway.

Foote spoke at the Credit Suisse seventh annual Industrials Conference.

NEWSWIRETrains News Wire

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