CSX CEO Acknowledges Having Lost Traffic

CSX CEO James Foote acknowledged in an interview during an investors conference that the Class 1 carrier has lost traffic and missed new business opportunities due to ongoing service problems.

“How much business are we missing? Lots. This is not minimal. This is not on the fringes. We’re not doing the job we should be doing,” Foote told interviewer David Vernon during Bernstein’s 38th Annual Strategic Decisions Conference.

Foote attributed the service problems largely to shortages of operating crews. He said the Class 1 rail system needs to hire and train 300 more conductors to reach full staffing of 7,000 active train and engineer employees.

In the meantime, CSX has seen its carload traffic fall by 2.1 percent and its intermodal traffic decline by 0.6 percent based on figures reported by the Association of American Railroad through the end of May.

Foote rejected during the interview that the adoption of the precision scheduled railroading operating model has hamstrung CSX service.

“I’ve never seen anyone who I know who knows anything about railroads tell me that this is not the right business model,” Foote said.

“If the railroads had not done what they had done over the last couple years, the railroad industry right now would be a basket case.”

Foote said CSX furloughed workers when traffic fell during the COVID-19 pandemic and, “all of the sudden the business came flying back at us.”

Many of those furloughed workers declined to return to work at CSX and the railroad’s crew attrition rate has been 10 percent. The normal attribution rate before the pandemic was 7 percent.

Although CSX has hired 1,000 new conductors over the past year those gains were offset by the higher than expected attrition rate.

“Hopefully it’s a matter of months now that we start to see some improvement,” Foote said.

More from the interview can be found at https://www.trains.com/trn/news-reviews/news-wire/service-problems-related-to-crew-shortage-have-cost-csx-traffic/

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