CSX touts improving service metrics

Ahead of an upcoming public listening session at the Surface Transportation focusing on its recent service issues set for October 11, Class I railroad carrier CSX said this week that some of its key service metrics are now showing positive gains as it works to implement its Precision Scheduled Railroading (PSR) efforts.

PSR is a cornerstone of the ongoing implementation of CSX’s operating plan by its President and CEO E. Hunter Harrison, which he deployed in previous top executive positions at both CP and CN. Precision railroading requires cargo to be ready when rail cars arrive for loading or risk being left behind.

“CSX’s performance shows improved transit time, train speed, car-handling efficiency and terminal fluidity as we continue implementing the principles of scheduled railroading and the previous transitional issues are resolved,” Harrison said in a statement. “We continue to drive forward in our effort to become the best railroad in North America, and the benefits of Precision Scheduled Railroading are becoming more apparent to our customers and our partners every day.”

CSX cited various improving service metrics, including:

• since mid-July, system-wide train velocity on CSX’s 21,000-mile network has increased by approximately 16 percent, and is now higher than the 2016 full-year average;
• transit times for scheduled merchandise trains have returned to a normal range, and are lower than transit levels at the outset of CSX’s Precision Scheduled Railroad implementation in first quarter 2017;
• average terminal dwell – the number of hours cars spend in terminals between their origins and destinations – has steadily improved over the last two months and is currently 11.2 hours, declining more than 15% since the summer. Dwell is now lower than 2016 full-year average; and
• CSX’s hump terminals continue to operate fluidly, within planned parameters and with capacity available to handle additional freight requirements

The objective of CSX’s October 11 STB listening session focusing on the Jacksonville, Florida-based carrier’s previous service issues “will allow the STB to hear from CSXT about its efforts to implement a new operating plan and to address service problems on its network, as well as to hear from rail shippers and other stakeholders regarding recent CSXT rail service issues they have experienced and to discuss whether additional service recovery efforts may be necessary,” STB officials said.

STB said that going back to mid-July it has “been closely monitoring CSX’s performance after widespread service problems resulted from CSX’s implementation of changes to its operating plan.”

And it added that as part of the STB’s ongoing efforts to ensure reliable rail service is restored as quickly as possible, STB is holding weekly calls with CSX senior management and receiving weekly service metrics from CSX, adding that it has been updating Congressional oversight committees and other stakeholders informed of its actions and continue to transparently address CSX’s service reliability issues so that shippers, carriers, and interested stakeholders are up to date.

As previously reported, a July 27 letter to CSX’s Harrison from STB leadership, including STB Acting Chairman Ann Begeman, STB Vice Chairman Daniel Elliott, and Board Member Deb Miller expressed their concerns over 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.

These CSX service-related issues stem from the implementation of significant changes to CSX’ operating plan, including Harrison’s longstanding practice of PSR.

Other operational initiatives cited by Harrison since he took over at CSX in March include idling around 550 locomotives and 25,000 railcars and converting hump yards to flat-switching yards that he maintains are more efficient.

CSX CFO Frank Lonegro said at the Cowen and Company 10th Annual Global Transportation Conference in Boston last month that the CSX of the Hunter Harrison era is still under construction.

“The fundamental building blocks are in place to enable us to provide two very important things,” he said. “The first is consistent high levels of service for our customers, and the second is a radically improved financial trajectory for our owners.

The rollout of CSX’s PSR plan, said Lonegro has been equal parts intense, aggressive, and rapid, with a keen focus on converting to the PSR model, with an eye on refinement and execution.

“As our execution continues to improve, our service for our customers will also improve, as will our volumes and equipment turns,” he stated. “During July and August, we did experience some transitional issues and you saw those flow through in volume numbers and service measures that you see on a weekly basis. Two untimely mainline derailments also compromised our service recovery. Rest assured, the long term vision to achieve what Hunter has achieved at other railroads is still intact at CSX.”

And the changes Harrison is making at CSX are consistent with changes he has made at other railroads, explained Lonegro, in the form of restoring balance to the network, and redesigning building blocks such as the blocking plan, the train plan, and the terminal plan and are designed to bring a competitive service offering to its customers.

While CSX is full underway in its efforts to augment service, some shippers continue to voice their dissatisfaction to date.

“Service is still very unreliable with cars off-route and sitting,” a chemical shipper said. “In addition, several diversions I’ve entered in August – which were accepted by CSX – and then summarily ignored.  This has caused one of our productions units to make adjustments to stay in operation.”