Public session testimony begins against CSX rail service

by Holly Demaree
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CSX
 
ARLINGTON, VIRGINIA, U.S. – The National Grain and Feed Association (NGFA) on Oct. 11 testified to the U.S. Surface Transportation Board (STB) about continuing issues by CSX Transportation Inc. (CSX) to provide reliable, consistent and predictable rail service to a significant number of NGFA-member companies that operate on the carrier's lines.
 
Further, NGFA recommended that the agency require the railroad to submit a detailed service recovery plan containing specific, meaningful service-improvement metrics and timetable for restoring service to acceptable levels.
 
On Oct. 5, the STB announced the speaker line-up for the public listening session (Docket Nos. EP 742) about CSX’s recent rail service. 

NGFA was one of 24 organizations and companies testifying at the public listening session conducted by the STB. Each of the witnesses documented continuing incidents of unpredictable, inconsistent service and a lack of adequate notice and ongoing communications by CSX with its customers.

CSX implemented a new operating plan called Precision Scheduled Railroading (PSR) under the leadership of new president and chief executive officer Hunter Harrison earlier this year. In June CSX users began to notice increased rail transit times, unreliable switching operations, inefficient car routings, poor communications with CSX customer service and acute disruption to customers’ business operations. In July, the problems prompted an outcry from grain and other industries seeking government intervention to improve rail service from CSX. Initial responses from CSX further heightened tensions and angered employees and stakeholders in some cases.
 
During the testimony, NGFA President Randy Gordon told the STB that NGFA-member grain handlers, feed manufacturers, flour millers, corn refiners and grain processors continue to consistently report CSX service failures, as well as failures of the rail company's personnel to respond to inquiries from rail customers.
 
Randy Gordon
NGFA President Randy Gordon 
"Receiving consistent, predictable rail service and obtaining ongoing, accurate information from a carrier are essential for agricultural rail shippers and receivers to operate efficiently," Gordon said. "Prior to July of this year, CSX generally met those needs. However, our members report neither is occurring today."
 
While some NGFA-member companies reported incremental improvement in CSX's service in recent weeks, Gordon noted that the NGFA continues to receive numerous reports that trains still typically are arriving four, to as many as seven or more, days behind schedule. 
 
"This unpredictability and inconsistency obviously disrupts both logistics and supply chain planning," he said. 
 
train tracks
 
NGFA said the net result of these CSX service disruptions has been: additional freight costs for truck movements; lost sales of commodities and ingredients; changes to supply chain and customer relationships; reduced operating efficiency at processing plants, flour and feed mills - some of which now are operating at 70% to 80% of capacity because of the lack of inbound supply; and economic losses incurred by rail car lessees and those operating private car fleets. 
 
"Combined, these amount to literally millions of dollars of additional shipping costs and lost earnings to our industry," Gordon said. 
 
The NGFA recommended the board require CSX to report several additional and more revealing rail service performance metrics to help narrow the "disconnect" that currently exists between what the railroad is reporting to the Board versus what is being experienced by individual facilities. As an example, NGFA cited CSX data on dwell time, train speeds and transit times that do not reflect the number of days it takes for CSX to pull a train after it's been loaded and sitting at a facility. Likewise, CSX is not reporting the days that emptied rail cars sit at a destination facility waiting to be pulled.
 
Gordon said CSX's service failures in 2017 also have undermined its obligation under federal law to provide service upon reasonable request, and, therefore, the rail company's actions call for more robust oversight by the Board until the harm is alleviated. 
 
"We believe the seriousness of CSX's service failures warrants the Board requiring CSX to develop and submit a specific service recovery plan to restore service in a manner that complies with federal law," he said. "Respectfully, the jury is still out on whether CSX's new operating plan, as currently envisioned, will be sufficient to restore service to acceptable levels that meet its statutory common-carrier obligation, or result in a substantially 'lower bar' for service performance."
 
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