U.S. rail company under fire for subpar service

by Ron Sterk
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Significant service issues with CSX Transportation, Inc. noted by the grain, milling and baking industries, as well as coal, chemical and other major shippers, have prompted the U.S. Department of Transportation’s Surface Transportation Board (STB) to institute weekly calls with the railroad to resolve the problems.

The American Bakers Association (ABA), the North American Millers’ Association (NAMA), the National Grain and Feed Association (NGFA) and others have encouraged their members to directly contact the STB about shipment problems on CSX.

Mike Goscinski director of gov relations for ABA
Mike Goscinski, ABA director of government relations
“We have become aware that some bakers are experiencing significant service disruptions with the delivery of grain and other ingredients to facilities in Tennessee, New York, New Mexico, Ohio and Georgia by the rail provider CSX,” Mike Goscinski, ABA director of government relations, said in a note to members of the ABA’s Commodity and Agriculture Policy Committee. “ABA is seeking feedback from our members that may be experiencing disruptions so we can gauge the scale of the impact to the industry and assess whether further action is needed.”

A source at a major milling company said service from CSX was “definitely down” for the company’s flour shipping operations, and that they were closely monitoring yard closures and delays. He said it was fortunate that pipelines mostly were in good shape at this time of year. He also noted that some CSX cars had been parked on the company’s private tracks, which may allow CSX to “massage” the numbers since cars on private tracks aren’t counted in dwell time and certain other statistics.

In a recent quarterly earnings call, CSX chief executive officer Hunter Harrison said there’s going to be “a little pain and suffering” when asked about customer reaction to changes at the railroad.

“Well, we’re feeling the pain,” one high-level grain company executive told World Grain. He blamed the problems “100% on new CSX leadership that doesn’t care about customers.”

The STB sent a letter to Harrison on July 27, “expressing concerns about deteriorated service resulting from the railroad’s recent operating changes.”

“Recently, the board has received a number of informal complaints from shippers who rely upon CSX rail service,” the STB letter said. “These shippers have reported that CSX’s service deteriorated markedly during the second quarter of 2017, which coincided with CSX’s implementation of significant changes to its operating plan.”

train tracks
The STB said shippers complained about increased and unpredictable transit times, loaded and empty rail cars sitting for days at yards, inconsistent and unreliable switching operations, circuitous and inefficient car routings, and the lack of meaningful assistance from CSX customer service. The STB also was notified of delays from CSX congestion at critical gateways, including New Orleans, Louisiana, and St. Louis, Missouri.

“We understand that these disruptions have forced a number of rail shippers and their customers to curtail production, temporarily halt operations and/or utilize other transportation options that have added additional expense and inefficiencies to their operations,” the STB said.

The board also noted in its letter that shippers complained that CSX “initiated the changes to its operating plan without sufficient lead time and coordination efforts that would have allowed them to adjust their production schedules and supply chain logistics. It appears that rather than doing proactive outreach, CSX put its customers in the position of having to contact CSX’s marketing staff to learn the details of service changes after the fact. We are very troubled by the apparent lack of communication with customers and urge your immediate attention to remedy this situation.”

In the letter, the STB requested CSX senior level personnel conduct weekly service calls with the board’s Rail Customer and Public Assistance staff “so we may better understand the scope and magnitude of CSX’s railroad performance issues and its efforts to resolve these problems.”

The STB also urged CSX to establish a service hotline for its customers and provide frequent operations updates to customers directly and in web postings.