CSX CEO Harrison won’t back down when it comes to addressing service issues and operational plans

For anyone that thought CSX CEO Hunter Harrison would sit idly while his railroad is dealing with the blowback of service issues that came to light through multiple letters sent to him by the Surface Transportation Board, it is time to think again.  Like Tom Petty said: “I won’t back down.”

Before going into why that is the case, the backdrop is this: in late July and earlier this week, the STB sent letters to CSX’s Harrison based on a number of informal complaints from both CSX customers and railroad industry stakeholders in regards to various service issues, including: transit times increasing significantly and/or becoming unpredictable; loaded and empty railcars sitting for days at yards; switching operations becoming inconsistent and unreliable; car routings becoming circuitous and inefficient; CSX customer service being unable to provide meaningful assistance; and slowing train speed and increasing dwell time along with numbers of cars online.

As reported in LM, these CSX service-related issues stem from the implementation of significant changes to CSX’ operating plan, including Harrison’s longstanding practice of precision railroading, which he deployed in previous top executives at both CP and CN. Precision railroading requires cargo to be ready when rail cars arrive for loading or risk being left behind.

The second STB letter to CSX and Harrison was sent on Monday, August 14 and on Wednesday, August 14, Harrison penned a letter of his own. This letter’s recipient was to a rail shipper and stakeholder group known as the Rail Customer Coalition, and Harrison, as he has been known to be during his distinguished career, was blunt and pulled no punches in defending his company.

Harrison kicked off his letter by explaining that CSX was disappointed with the RCC for what he called its “many unfounded and grossly exaggerated statements in your letter [to the STB]…related to the service experienced by some customer as we implement Precision Scheduled Railroading, which has a proven schedule and long track record of delivering superior transportation services for customers. Though you did not extend the courtesy of discussing these concerns with us first, most likely because your statements were made to advance your longstanding attack on the balanced approaches of the Staggers Act, we wanted to respond to you directly, and set the record straight.”

Seems pretty direct for sure.

But Harrison was really just getting warmed up. He went on to explain that CSX’s goal is to provide superior and reliable service to its customers, providing them with a competitive advantage, with the changes it is implementing expected to deliver measurable improvements in key service metrics that will result in customers moving freight more consistently, reliably, and cost-effectively across the CSX network.

Harrison did not deny that there have been service issues, which he labeled as “unfortunate disruptions” that CSX is addressing aggressively. And he added that CSX is in real-time dialogue with customers, industry officials, and regulators and working on a 24x7 basis to make the necessary changes to improve its ability to make needed changes to address customer concerns.

As for pulling no punches, he had this zinger for the RCC: “Since coalitions do not have service issues, we do not intend to continue a discussion with you about the service we provide to our customers. We are also aware that not all members of your coalition were informed of your letter in advance and some do not agree with your position.”

And he added that CSX will continue to work directly with its customers to address their concerns moving forward and encourage them to continue to bring issues to their attention as CSX moves forward with its operating plan. As for the STB, he said that CSX welcomes their continued engagement and will continue to work with them as it monitors CSX’s ongoing improvement.

With several decades in the railroad sector that have seen a huge amount of success, it stands to reason that to bet against Harrison and CSX may be a mistake. While there may be a few bumps on the road, or, on the track, that is, he has a plan and is sticking to it. Like Mr. Petty says he will not back down and he will stand his ground.