CSX Melting Down

[TheOldDessauer]

From: Trains Newswire

CSX begins scaling back operations at key Ohio intermodal terminal

By Bill Stephens | October 13, 2017

JACKSONVILLE, Fla. — CSX Transportation is preparing to scale back operations at its intermodal hub in North Baltimore, Ohio, which opened in 2011 as the $175-million centerpiece of a new intermodal strategy.

The Northwest Ohio Intermodal Terminal was designed to support CSX’s hub-and-spoke approach to serving smaller intermodal markets. By sorting container shipments at North Baltimore, CSX could build the density required to provide new or more frequent service to places such as Louisville, Ky.

But the terminal’s sorting hub days are numbered as part of CSX’s shift to precision scheduled railroading under CEO E. Hunter Harrison, according to sources familiar with the situation.

“CSX does not have any plans to discontinue operations at the North Baltimore facility,” spokesman Rob Doolittle says. “We are reviewing our train plan at the North Baltimore terminal to identify opportunities to provide better service to our intermodal customers, and CSX will communicate any changes that may be made directly to affected customers, employees, and other stakeholders.”

Over the past two weeks CSX has told customers that it is curtailing intermodal service to Louisville and Detroit. International and domestic intermodal traffic to and from both cities is funneled through North Baltimore.

The changes are the first steps in diverting traffic away from the Northwest Ohio Intermodal Terminal, sources say.

CSX will no longer handle domestic container shipments from Detroit to two dozen destinations, ranging from points in California, Texas, and Mexico to Florida, Syracuse, N.Y., and Montreal, Quebec. Similar changes have been made in Louisville.

The North Baltimore terminal, strategically positioned on CSX’s mainline to Chicago and between its former Baltimore & Ohio Toledo-Cincinnati and Chesapeake & Ohio Toledo-Columbus routes, may survive as a block-swapping yard.

Before Harrison’s arrival at CSX in March, 30 or so trains per day stopped at North Baltimore to swap blocks or have their containers lifted, sorted, and placed on different outbound trains.

The terminal employs nearly 300 people and has been hailed as a model of advanced technology and green design. It features ultra-efficient electric cranes, optical scanners that reduce truck idle times, and automated car tracking technologies. In 2013, Vice President Joe Biden and Transportation Secretary Anthony Foxx toured the terminal and touted it as an example of the economic benefits of infrastructure investments.

Now it is unclear whether the changing role of the terminal will spell the end of CSX’s hub-and-spoke strategy, which was unique for a double-stack intermodal operation.

As recently as July, CSX executives said North Baltimore was a proven concept that would be extended to a new $270 million Carolina Connector intermodal terminal planned for Rocky Mount, N.C. Executives also had discussed the potential for adding a third intermodal sorting hub near Atlanta.

[TheOldDessauer]

From: Reuters Business News

OCTOBER 11, 2017

Eric M. Johnson

(Reuters) - The head of No. 3 U.S. railroad CSX Corp promised on Wednesday to improve service as companies like Cargill Inc [CARG.UL] demanded greater accountability and fewer delays, criticizing an overhaul CSX launched six months ago.

Customers have complained of longer transit times, unreliable switching operations, inefficient car routings and poor communications with CSX customer service.

Chief Executive Officer Hunter Harrison, who implemented cuts when he was appointed to the job in March, defended his strategy of “precision scheduled railroading” at a hearing at the U.S. Surface Transportation Board (STB) in Washington.

The session marked the first public forum for shippers and trade groups to air grievances and give Harrison the chance to defend his strategy. The STB has been reviewing the railroad’s performance weekly and acting as intermediary between CSX and disgruntled customers.

Since he took over, Harrison closed CSX rail yards, lengthened trains, mothballed locomotives and slashed overtime pay and hundreds of jobs. He also changed the way rail cars are sorted in yards and replaced “unit” trains carrying a single commodity like coal or grain with trains carrying diverse freight.

He apologized to shippers for service disruptions, which he blamed on derailments and internal mistakes, including closing too many yards.

Speaking after Harrison, Cargill Vice President Brad Hildebrand asked the STB to publish minutes of its weekly calls with CSX management and asked CSX to return resources to its network.

“In a nutshell, (precision scheduled railroading) means having to do with less,” he told the regulators.

While some customers have noted improvements, others said CSX’s disruptions continue to create costly logistical headaches for companies from the chemical and agricultural sectors to the automotive industry and steel producers.

Their supply chains, plants and distribution channels rely on CSX’s rail network across the eastern United States.

Harrison said his strategy was critical to his previous turnarounds of two Canadian railroads - Canadian Pacific Railway Ltd and Canadian National Railway Co - and said, the “best is right around the corner.”

“We’ve made some mistakes. This is not a failure of precision scheduled railroading,” he said.

Harrison told the STB his turnaround plan has been implemented across CSX’s system but requires “fine-tuning.” He hinted at more possible layoffs and other yard changes.

Chemours Company asked the STB to require a “flight plan” from CSX outlining future system changes and how they will affect shippers.

In what could be a distant threat to CSX’s revenues, Chemours and trade groups renewed their calls for changes to federal regulations to allow shippers served by CSX to gain greater access to other operators.

Two trade groups asked the STB to require a service recovery plan from CSX with granular performance data and penalty-enforced deadlines.

Dow Chemical Co’s supply chain Vice President Greg Jozwiak urged the STB to improve rules to expedite relief during disruptions.

“The reality is the procedures take too long,” Jozwiak said. “We need a service remedy counted in days, not weeks or months.”

Reporting by Eric M. Johnson in Seattle; editing by Tom Brown and Cynthia Osterman

[TheOldDessauer]

From: Trains Newswire

Columbus domino falls as CSX aims to reduce role of key Ohio intermodal terminal

By Bill Stephens | October 17, 2017

RELATED TOPICS: CSX | EAST | INTERMODAL | OPERATIONS



JACKSONVILLE, Fla. — CSX Transportation is reducing the number of domestic and international intermodal destinations served from its terminal in Columbus, Ohio.

CSX told customers on Oct. 12 that it would be dropping outbound service from Columbus to nearly two dozen locations. Only a handful of inbound lanes are being eliminated, the railroad said.

The announcements come on the heels of reductions in intermodal service to Detroit as well as Louisville, Ky., as CSX prepares to scale back container sorting operations at its hub in North Baltimore, Ohio.

The terminal opened in 2011 as the linchpin of a new intermodal strategy. The $175-million Northwest Ohio Intermodal Terminal was designed to support CSX’s hub-and-spoke approach to serving smaller intermodal markets.

By sorting container shipments at North Baltimore, CSX could build the density required to provide new or more frequent service to places such as Louisville, Detroit, and Columbus.

But the terminal’s sorting hub days are numbered as part of CSX’s shift to precision scheduled railroading under CEO E. Hunter Harrison, according to sources familiar with the situation.

Officially, CSX says it is reviewing operations at the terminal but that it has no plans to close the facility along the former Baltimore & Ohio main line.

[JerryC]

Hello again! My two cents about CSX

The local switchers, which was a five-day a week job, have been shut down and the locomotives assigned elsewhere. My guess is that Dalton and Cartersville are now covering the industries on the forty or so miles in between. I have heard of no complaints from the local industries on the line. Trains are now few and far between on the W&A. I can count on one hand how many I have seen since July, compared to seeing at least one a week while in town before then.

I'm a railfan, but companies don't make profit through audience applause. If what Hunter Harrison is doing is actually leaning up and creating money for the bottom line, then more power to him. If I get tired of waiting to photograph.a train, then i'll mosey on over to the NS line, or go home.

[buzz456]

Jerry,
You need to read about the major chemical guys serviced by CSX complaining about their service for the last six months. Your little antidote of one small branch is just a tiny piece of this puzzle. Only time will tell how this is going to shake out but so far this has not been a happy story for a company that was doing pretty well before Hunter came on the scene.

[JerryC]

I would not exactly say that the W&A is a "little branch". The Atlanta to Chattanooga mainline used to average about a train every 60 90 minutes on the section above Cartersville. It is far below that now, and I would think that would be an indicator of what is going on in the rest of the system.

I really don't have much sympathy for either affected side in this -- the employees or the shippers. The customers over the years have diverted a lot of traffic to trucks to get a better deal - that's what businesses do, look at any way they can lower costs. But now, when the railroad is basically letting them know that their 2 cars a week are no longer worth the time and money to switch, they want to cry and moan about it. Now those same businesses know how it feels when they screwed their own employees over to save a dime. You know what they say about karma.

[dtrainBNSF1]

I'd think a railroad trying to prove that its new service actually works wouldn't be the one to tell the shippers that "your freight's not important enough for us to switch", not unless it wants to preemptively shoot itself in the foot. Where do they think all the strings of cars in the yards and on their 120+-car manifests come from? Lots of little industries like the one mentioned with their "2 cars a week" schedule.

Take care of the little people, because if you can't take care of those, most likely you won't take care of the big guys very well either.

[JohnS]

CSX has been slowly killing our business in Michigan. It started with rate increases that moved our primary shippers to trucks. Then with the abolishment of the road trains that served the yard in Grand Rapids. The road trains are back but the main switching and make up of these trains is done at a different yard now. Takes a while to get the freight we still do have.

[buzz456]

"Agricultural giant Cargill Inc. said that as recently as Monday, it had to shut down a Lafayette, Ind., plant during the morning because local train crew members, having exceeded the number of hours they were allowed to work, couldn’t take its railcars. About a week earlier, a Sidney, Ohio, plant shut down for two days because it hadn’t received empty cars from CSX to load.

Brad Hildebrand, a Cargill vice president, said service levels haven’t improved from last year and warned federal regulators from drawing conclusions based on recent CSX reports showing improvement. “One month does not make a trend,” he said.

Other shippers on Wednesday were eager to share their experiences. Chemical company Chemours Co. said CSX failed to provide scheduled service more than half the time during the summer, and it has spent more than $1.3 million in excess costs to ship product to customers.

“The last five months have been a costly disappointment for us,” said Kevin Acker, Chemours strategic relationship and category manager for rail.

“If anything, it has gotten worse in September and October,” said Lisa Powers, distribution manager at chemical company Cristal. “It’s a very miserable time trying to deal with them.”

Kellogg Co. also detailed problems at its Pringles factory in Jackson, Tenn., which at times has waited on CSX cars being shipped from Illinois that instead wound up in Idaho.

Sharron Moss-Higham, a distribution executive for Kellogg’s snacking business, said the company has been able to avoid shutdowns at the Pringles plant by trucking some ingredients, a delivery method that is triple the price of rail, and increasing its stockpile of potato flakes to make sure it doesn’t run out of the key ingredient. But the company had to shut down parts of a production line at a North Carolina plant.

Shippers called on the Surface Transportation Board to require CSX to provide notifications when it changes train schedules or routes, among other changes.

Mr. Harrison said that CSX is seeking to develop the most efficient rail network, using data and conversations with customers, rather than bow to each shipper’s demands.

“We cannot have, with due respect, each individual customer designing their own schedule,” he said."

Excerpts from Wall Street Journal article.

[BNSFdude]

Railroads don't exist to make schedules, they exist to move f*king cars for customers when the customers want it moved. Could you imagine paying for shipping something via UPS and they go "Nah, maybe next week because it doesn't fit our schedule."

[TheOldDessauer]

From: Trains Newswire

CSX culls low-volume intermodal lanes
Shorter routes, smaller markets hit hardest; merchandise trains to pick up slack
By Bill Stephens | October 18, 2017

JACKSONVILLE, Fla. — CSX Transportation is pruning domestic intermodal service in several low-volume lanes linking the Southeast and Northeast, along with some interline service with Union Pacific, as the railroad makes sweeping changes to its network under CEO E. Hunter Harrison.

CSX is dropping outbound service from nine terminals in the Southeast to 20 terminals on and off the CSX system, the railroad informed customers on Tuesday. And it’s simultaneously ending inbound service to those terminals from 11 origins on and off CSX.

The affected terminals in the Southeast include five locations in Florida, plus Atlanta; Charleston, S.C.; Savannah, Ga.; and Memphis, Tenn. Combined, these Southeastern terminals will continue to originate traffic in more than 110 lanes and receive containers from more than 160 lanes.

CSX told customers the changes were being made “to improve service, efficiency, and better align product demand.”

CSX spokesman Rob Doolittle says the changes are part of a review of intermodal operations as the railroad implements Precision Scheduled Railroading.

“We are working to identify opportunities where we can improve service to our intermodal customers by leveraging other parts of our scheduled network to provide faster and more efficient service,” Doolittle says. “In some cases, this may mean using scheduled merchandise trains to support some intermodal customers’ requirements, and reducing the intermediate handling of intermodal traffic when possible, creating more reliable service and faster transit times.”

The railroad will curtail service between the Southeastern terminals and smaller markets in the Northeast, including Cleveland, Buffalo, and Syracuse, N.Y., as well as Montreal.

The changes are related to scaling back container sorting at the Northwest Ohio Intermodal Terminal. The unique terminal in North Baltimore, Ohio, is a key to the hub-and-spoke strategy CSX has used to serve lower-volume intermodal markets. But its days as a sorting hub are numbered, sources have told Trains News Wire.

Harrison declined to answer a question about the fate of North Baltimore — and the hub-and-spoke system — during CSX’s third quarter earnings call with Wall Street analysts on Tuesday. The railroad will provide additional details during its investor day presentations later this month.

The other announced changes from the Southeast terminals affect interline service with UP to and from destinations in the West, ranging from Portland, Ore., and Oakland, Calif., to Denver and Phoenix, as well as points in Mexico.

This is the latest wave of cutbacks related to traffic funneled through the North Baltimore terminal. Earlier this month, CSX announced a reduction of service to and from Louisville, Ky., Detroit, and Columbus, Ohio, to various points on and off the CSX system.

Last year North Baltimore handled 809,254 lifts, making it the second-busiest terminal on CSX.

Full Grid Of Changes In Link Below.


http://intermodal.com/share/wwwintermod ... 7-2017.pdf

[JerryC]

Railroads, like any other business, exist to make money. And like other businesses, they do it at the lowest costs to themselves, and sometimes that means slashing costs of equipment and manpower, raising prices, and cheesing off a few customers. The Fed's force heavy regulation on the railroads, make them take and keep unprofitable customers, and so the railroads have to do whatever they can get away with to stay profitable. And these customers just cannot be satisfied. They gripe and complain because they are captive to one switcher. They gripe and complain because there is a fuel surcharge when the price of diesel rises. They gripe and complain when there is a price increase, even though it still undercuts truckers. And they gripe and complain when a CEO comes in and upsets the status quo by making them prove their worth to the railroad.

CSX may not be telling their customers that they won't switch two-carload companies (technically they can't because of regulation), but they can de-prioritize them. Again, take my hometown as example. Of the five or so industries, two are constant load-unloads. Those are on the north and south end of town, and now get switched by locals that are based 20 miles away in both directions. One generates an entire train every week, so they get their own locomotives parked on their siding until called for. The other two are 2-3 carload per week. These apparently have been handed to through or way-freights, instead of keeping a dedicated switcher in town to deal with them and the other three. It's a smart move. The cars still get switched, though it might not be the "on demand, right now" that these customers believe they are entitled to. And by eliminating the local switcher, CSX saves around $300,000 a year in labor costs alone - and even more when you think about that is two less locomotives that have to be stationed, maintained, and fueled. Multiply that by the other locals in the entire system that have been eliminated, and you can see a substantial savings.

It seems to me that the company is doing nothing any different that what other industries are doing - streamlining. Even some of the old-timer T&E people have said that the company has been top-heavy in management and overlapping departments. And winnowing down customer switching, and even forcing unprofitable customers offline, isn't something that CSX is unique in doing. In the industry that i'm in, we have minimum runs that have to be met before we can fulfill an order. Some customers have groused about this, and have even threatened to take their business elsewhere. What usually happens is griping, and that's all, because they can't get it anywhere else. It will be the same for CSX - a lot of smoke and spit, but in the end, the railroad will still be there.

[BNSFdude]

I return to the UPS example. Does UPS, FedEx, USPS tell you "nah, not today" when you have a package paid for and ready to pick up?
You're thinking of railroads as businesses, which they are, but they aren't. They're transport carriers much like the above companies. They exist only to serve customers.

[buzz456]

With the exception of the USPS they all make a serious profit by servicing their customers. The customer should always be number one, the rest of it sort of follows to be a success.

[JerryC]

And again, I'll point out that UPS, and Fed Ex, to a lesser degree, have no problem raising mighty hell and shifting loads to the road if there is any sort of service hiccup. They are almost as bad Wal-Mart. And the USPS is a very poor example of a business who could care less about it's customers. NEVER pay expedited shipping, because you are paying for nothing due to their restrictive office hours.

All being said, we can debate it until the cows come home. Hunter is going to make this happen, and the only people that are going to stop him is the Board. And from what i,'ve seen, with the number of shippers who have withdrawn their complaints on the rise, the tide is going to swing in CSX's favor.