Shipping and Logistics

CSX Operating Changes Disrupt Rail Shipping

Written by Sandy Williams

Shipping complaints about CSX Transportation have prompted the Surface Transportation Board to write to CSX President and CEO E. Hunter Harrison to express their concerns.

According to the Board, shippers are complaining that CSX rail service deteriorated markedly in second-quarter 2017, coinciding with significant operational changes at the company. The Board received a number of complaints of longer and unpredictable transit times, loaded and empty rail cars sitting at yards, unreliable switching operations, and inefficient car routings. Delays were especially noted resulting from CSX congestion at “critical gateways” in New Orleans and St. Louis.

According the letter, rail disruptions at CSX have forced a number of rail shippers and their customers to curtail production, temporarily halt operations, and resort to other transportation options, adding unnecessary expense and inefficiencies.

The changes in the CSX operating plan were made without sufficient communication or lead time to adjust production schedules and supply chain logistics, complained shippers.

The Board noted that the complaints were confirmed after analyzing weekly operational data and requested the railroad provide weekly service calls to the regulators to address the problems.

Harrison apologized to customers in a July 31 email, but blamed CSX employees for the disruptions. “While most people at the company have embraced the new plan, unfortunately, a few have pushed back and continue to do so,” he said.

On Aug. 14, the Rail Customer Coalition sent a letter to Congress expressing their “strong concerns regarding the serious and disruptive rail service problems our members are experiencing due to major changes that have upended the CSX network.” The RCC, representing 64 trade associations including the Steel Manufacturers Association and Institute of Scrap Recycling Industries, described the extraordinary and expensive steps rail customers were forced to take because “CSX has repeatedly failed to pick up and deliver cars.”

“This has put rail dependent business operations throughout the U.S. at risk of shutting down, caused severe bottlenecks in the delivery of key goods and services, and has put the health of our nation’s economy in jeopardy,” wrote RCC. The coalition urged Congress to open a formal investigation into CSX service problems, as well as passing common-sense reforms to strengthen the Surface Transportation Board’s ability to act as intermediary between customers and railroads.

Harrison responded to the coalition on Aug. 18, calling the complaints against CSX “unfounded and grossly exaggerated.” He admitted to some “unfortunate disruptions” to service and said CSX would work directly with customers to address concerns.

“The overriding objective of CSX’s new operating plan is to provide superior and reliable service to our customers that provides them a competitive advantage and contributes to American business success,” Harrison wrote in his letter to RCC. “The changes we are implementing today will deliver measurable improvements in key service metrics, resulting in our customers’ freight moving more consistently, reliably and cost efficiently across the CSX network.”

Among those who have shifted business from CSX include UPS, McDonald’s, and Intermodal Cartage Group. Norfolk Southern Railway has been the beneficiary of dissatisfaction with CSX and reports seeing some business move over to NS.

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