CSX Revamping Intermodal Service

The plans of CSX to revamp its intermodal business will focus on more profitable longer-haul service linking major markets.

Trains magazine reported on Wednesday that CSX has notified its customers that numerous changes are being made to traffic that is interchanged with BNSF as well as the pending end of 75 low-volume service lanes.

A similar change in interline service with Union Pacific had been announced about a week ago.

CSX said that the changes are designed to reduce transit time through Chicago.

The new operating plan will funnel interchange traffic coming through Chicago to five eastern destinations including Chambersburg, Pennsylvania; North Kearny, New Jersey; the Northwest Ohio Intermodal Terminal in North Baltimore, Ohio; Springfield, Massachusetts; and Syracuse, New York.

Intermodal traffic will be sent to those terminals by truck from markets now served by rail. For example, traffic going to and from Cincinnati, Cleveland, Columbus and Detroit will travel by highway to and from North Baltimore.

Baltimore will be served via Chambersburg; Philadelphia via North Kearny; Worcester, Massachusetts, via Springfield; and Buffalo, New York via Syracuse.
CSX said the changes will cut travel time, including by as much as a day between West Coast terminals and New England.

The changes will occur in mid-September with UP interchange and in mid to late September for BNSF interchange.

BNSF and CSX also will shift interchange traffic bound for the Southeast from Chicago to Memphis. This includes traffic headed for Atlanta, Florida, and Charlotte, North Carolina.

“We have been working closely with our interline partners, Union Pacific and BNSF, to streamline interchanges, especially for traffic routed through Chicago and the Southeast,” CSX Chief Marketing Officer Mark Wallace wrote in a letter to intermodal customers. “These changes, to take effect prior to peak season, will enable us to execute our service plan with greater reliability and speed during this important shipping period.”

Union Pacific had told its shippers in early August of the plans of CSX to end steel-wheel Chicago interchange between a number of UP origins and CSX destinations as well as to shift interchange away from Chicago and New Orleans in favor of Memphis.

Most of the 197 UMAX service lanes being discontinued are low volume, including 67 that have not had any container movements in the past 12 months. Other lanes being dropped averaged just one container per week.

“Maintaining these status-quo service offerings would be detrimental to the majority of our customers and the East-West transcontinental network, particularly during fall peak,” Wallace said in his letter tocustomers.

CSX contends that most of the UMAX volume in cancelled steel-wheel interchange lanes can continue via crosstown trucks linking UP and CSX terminals.

However, Trains quoted an intermodal analyst as saying that might not happen because drayage capacity is tight in Chicago and it will increase the cost of the move. The analyst said drayage by highway will increase the travel time.

Movements from the West Coast to the Ohio Valley are likely to stay on the road once they are unloaded in Chicago.

In some instances, the traffic might be diverted to Norfolk Southern in Chicago. Of the UMAX lanes being dropped, 49 could potentially shift to NS.

CSX CEO James Foote had indicated during an earnings call conversation last month that the carrier was studying revamping its intermodal network. He said at the time that during his days at Canadian National that that carrier had undertaken a similar intermodal restructuring.

During his comments last month Foote said CSX would seek to become more efficient.

In his letter to shippers, Wallace said CSX will not be making any other changes to its intermodal network until the peak season is over.

The intermodal restructuring will not result in any closing of terminals.

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