Posts Tagged ‘CSX intermodal terminals’

CSX Intermodal Terminals Remain Open

February 20, 2021

CSX told its customers late this week that all of its intermodal terminals remain open despite recent harsh winter weather.

However, it said shipments are subject to weather-related regional delays.

Four of its Transflo transloading sites were temporarily closed, including facilities in Nashville, Tennessee; Richmond, Virginia; Wilmington, Delaware; and Baltimore.

The facility in Raleigh, North Carolina, was experiencing delays while those in Elizabeth, New Jersey and Philadelphia were closing early.

Norfolk Southern and Union Pacific had announced this week temporary suspensions of inbound loads for shipments at some terminals due to winter conditions.

CSX Closes Pittsburgh Intermodal Terminal

May 6, 2020

Less than three years after it opened, CSX has closed an intermodal terminal in Pittsburgh.

The terminal, which cost $60 million and was located in a former Pittsburgh & Lake Erie yard in McKees Rocks, was part of the National Gateway Initiative that a previous management of CSX launched in 2008.

The Pittsburgh terminal, which opened in September 2017, was the last component of the National Gateway to be completed.

The $850 million public-private project also included construction of an intermodal terminal at North Baltimore, Ohio.

At the time that these terminals were built, CSX was using a hub and spoke strategy to build intermodal traffic.

That strategy was dropped several months after the late E. Hunter Harrison became CEO of CSX in March 2017. Instead CSX began favoring intermodal service lanes with the highest volume and profit.

An analysis published on the website of Trains magazine suggested that the 70-acre Pittsburgh intermodal facility was doomed by the decision of CSX to end steel wheel transfer in Chicago of intermodal containers and trailers received from western railroads.

Instead those containers and trailers are moved across Chicago by highway.

Trains quoted intermodal consultant Larry Gross as saying this effectively made traffic coming into Pittsburgh from the West a 460-mile haul for CSX, which the carrier might not have seen as being profitable enough.

Gross noted Pittsburgh is a relatively short haul for CSX intermodal traffic and that worked against it.

He also said the CSX network was not well suited for diverting north-south highway traffic through Pittsburgh onto rails.

CSX has leased the site of the Pittsburgh intermodal terminal to Shell Oil Company, which will use it as a storage-in-transit facility for a new petrochemicals complex it is building 30 miles northwest of Pittsburgh in Potter Township that will produce 1.6 million tons of polyethylene annually.

However, CSX stands to benefit because the haulage of plastic pellets is more profitable than intermodal traffic.

CSX said it can handle intermodal traffic to Pittsburgh through other existing terminals.

CSX Executive Says Overhaul of Intermodal is Complete

September 20, 2019

A CSX executive said this week the carrier has completed making major changes to its intermodal operations and is now looking for business growth opportunities.

Speaking at the annual Intermodal Expo of the Intermodal Association of North America, Maryclare Kenney, vice president of intermodal and automotive at CSX, said the carrier is now able to provide more reliable service.

“We’re looking to grow,” Kenney said. “We’re open for business and we’re excited by the consistent, reliable service we’re able to bring customers.”

CSX overhauled its intermodal network soon after adopting the precision scheduled railroading operating model.

One major change was to end the hub and spoke business model that involved the Northwest Ohio Intermodal Terminal, which CSX had used as a sorting hub for containers brought in from various points on its system.

Low volume intermodal service lanes were closed, resulting in a 15 percent drop in intermodal volume over the past two years.

Intermodal volume this year at CSX is down 8 percent. Overall North American intermodal volume thus far in 2019 has fallen by 4 percent.

Kenney said that before implementing PSR two years ago CSX had periods of time when it delivered good service but had challenges maintaining consistent, reliable service.

She attributed that in part to a complicated intermodal network.

“We were trying to be all things to all people, serve every lane that somebody wanted us to serve, and we really didn’t think about the volume and density that was required to really make you successful in railroading,” Kenney said.

CSX now emphasizes a high-density point-to-point intermodal network of higher density and more profitable lanes.

Kenney said that combined with the efficiencies of PSR have enabled CSX to improve its service reliability.

In previous years, CSX measured intermodal on-time performance by whether it delivered within four hours of scheduled arrival. The best it achieved under that standard was a 90 percent on-time performance.

Currently, CSX measures on-time performance to the minute based on a trip plans for each container and trailer.

The carrier said that it has achieved 93 percent on-time performance in the third quarter of this year, which it said was a 20-point improvement since the second quarter of last year.

Kenney said that on some days Intermodal trip-plan compliance has been 99 percent.

As for expansion plans, CSX and Canadian National will launch next month a new joint intermodal service connecting Toronto and Montreal with New York, New Jersey, and Philadelphia.

CSX and BNSF have haulage agreements that involve use of the Northwest Ohio terminal in North Baltimore. Containers originate on BNSF in California and are unloaded in North Baltimore.

Tom Williams, BNSF’s group vice president of consumer products, said at the conference that additional origination points are likely to be added.

The North Baltimore terminal is now used to serves local markets.

Kenney declined to comment on whether CSX and Union Pacific are planning to revive some of their discontinued interline services.

There have been trade press reports that intermodal marketing companies had received inquiries from the railroads to determine if there was interest in resuming some of those discontinued services.

Kenney would only say that CSX continues to evaluate its network and that interline services will continue to evolve.

Although international intermodal service from Southeastern ports to inland ports has seen robust growth, Kenney said the overal trend is negative for railroads because intermodal captures far less international volume from East Coast ports than it does from West Coast ports.

CSX Putting New Intermodal Strategy Into Place

October 20, 2018

Earlier this year, CSX CEO James Foote said the railroad’s intermodal network was a mess and needed to be revamped.

Much of that revamping has involved the announcement of plans to end service in smaller intermodal service lanes in favor of higher-volume point-to-point markets.

But management had been vexed as to what to do with the Northwest Ohio Intermodal Terminal outside of North Baltimore, Ohio.

It opened in June 2011 as part of a hub and spoke strategy to build traffic in the lower-volume service lanes CSX is now abandoning.

The idea behind the hub and spoke concept was that volume could be built in low-volume markets by creating a connecting hub much like the passenger hubs that airlines operate in such cities as Atlanta and Chicago.

The concept is also used for air freight service provided by FedEx and UPS. North Baltimore was the connecting hub.

But once the hub and spoke strategy ended what would CSX do with the new North Baltimore terminal? Initially, the carrier talked about using North Baltimore to do block swapping.

Now, CSX sees the Northwest Ohio terminal as a gateway to Ohio Valley markets.

Rather than pick up containers by rail in such cities as Cleveland, Cincinnati and Columbus, CSX will instead load them aboard trains in North Baltimore after they have been driven there by truck.

CSX and BNSF recently announced a haulage agreement to build dedicated trains that will link North Baltimore and West Coast terminals by running through Chicago.

Also on the docket for North Baltimore is development of a 500-acre logistics park and the launch of service to East Coast ports.

In the recent third quarter earning conference call, CSX executives portrayed their strategy as one of reducing operational complexity while developing a smaller but more profitable intermodal network.

“We still have a long way to go to get that franchise right,” Foote said. “Part of the process is disassembling the old independent structure of the company. Because it’s not an independent company — it’s part and parcel of the railroad.”

By that he meant that previous management sought to provide service to as many terminals as possible and increase the volume of containers handled.

Foote said that resulted in an intermodal network that was inefficient and offered spotty service reliability due to its complex nature.

But perhaps more importantly, it came with high costs and low profit margins.

Overhauling intermodal operations is one of Foote’s areas of expertise, having done it at Canadian National where intermodal went from being CN’s least profitable endeavors to one of average profitability.

He believes the same transformation can be done at CSX, saying that more efficient and reliable service will lead to volume and revenue growth.

Foote said that during the third quarter CSX intermodal traffic was up 3 percent and intermodal revenue rose by 12 percent in comparison with the third quarter of 2017.

The reorganization of CSX’s intermodal strategy that began in fall 2017 has meant that in terms of market coverage, CSX has lost 14 percent of it.

It has dropped or will have dropped by late January 900 intermodal market pairs. It will continue to serve 500 market pairs, meaning it will have given up 44 percent of those pairings.

Most of those discontinued pairings were short-haul traffic and some never generated any traffic volume.

The BNSF haulage agreement is an example of how CSX is using the precision scheduled railroading model to reorganize its intermodal operations.

A key principle of the model is to minimize the number of times that a freight car is handled between origin and destination.

Foote said even after CSX abandoned the hub and spoke concept, it still found itself shuffling containers between trains twice or three times between origin and destination.

CSX officials said the railroad lost 7 percent of its intermodal volume when it ended the hub-and-spoke operation and it expects to lose another 7 percent by ending some of its low-volume markets.

The objective of the new intermodal model is to make up those losses through focus on potentially higher volume markets.

CSX to End Intermodal Drop Service in 300 Markets

October 9, 2018

CSX plans to eliminate in January intermodal drop service between 300 intermodal origin-destination pairs, including some in Cleveland, Columbus and Cincinnati.

Intermodal traffic originating or terminating in those cities will instead arrive and depart by highway and be placed on trains at the Northwest Ohio Intermodal Terminal in North Baltimore, Ohio.

At the same time, CSX plans to introduce new services in seven domestic markets as it continues its ongoing efforts to focus its intermodal network on higher-density and more profitable routes.

Earlier CSX announced new interline services with BNSF and Union Pacific.

CSX officials have said the changes are expected to build more point-to-point service linking high-volume terminals in a bid to reduce operational complexity and bolster profitability.

“The January service changes are part of the overall CSX network strategy to improve service consistency and prepare the network for sustainable growth now and in the future,” said Maryclare Kenney, vice president of intermodal and automotive, in an advisory to shippers.

She said the changes will alleviate congestion in Chicago and improve the reliability of intermodal service.

In some instances, CSX is recommending that shippers route containers to a nearby terminal.

Starting Jan. 2, CSX will end service to 231 domestic service lanes while suggesting that at least 60 of those lanes could involve shifting service to another terminal.

Many of the domestic service lanes that are being ended are interline services with Union Pacific and the railroads’ joint UMAX container pool. Others are shorter-haul routes.

Also on Jan. 2, CSX plans to end service in 65 international service lanes with recommendations to use alternate nearby terminals in more than two dozen of the affected routes.

Once the changes are implemented, CSX will offer intermodal service in 297 domestic service lanes and 202 international service lanes.

CSX-BNSF to Launch Ohio-LA Container Service

October 5, 2018

CSX and BNSF said this week they will begin a container service between Los Angeles and Ohio that will use the Northwest Ohio Intermodal Terminal in North Baltimore.

The service will begin on Oct. 29 and originate trains five days a week in each direction.

On BNSF, the containers will move via the Southern Transcon route west of Chicago.

“Customers who take advantage of this new service can reach key markets within the fast-growing Ohio Valley region,” said BNSF Group Vice President Consumer Products Tom Williams in a statement. “Our new Ohio intermodal service will create an efficient, direct service from the West Coast.”

CSX said it will work with NorthPoint Development to construct a 500-acre logistics park adjacent to North Baltimore facility and is expanding eastern access to the facility through new service to and from the Port of New York and New Jersey.

This will involve international traffic that will be trucked from North Baltimore to destinations in southern Michigan, western Ohio, and Indiana.

The logistics park will include traditional warehousing and distribution capabilities, as well as services such as a container yard and equipment storage, export container stuffing, and transload and break-bulk resources, all within a heavy-haul local corridor.

The North Baltimore facility was opened in June 2011. At the time, CSX operated it on a hub and spoke model in which containers from various locations throughout the CSX network were routed there to be interchanged.

The hub and spoke approach was intended to help build traffic density in low-density intermodal markets.

That model was dropped last year when CSX ended the hub and spoke intermodal operating model. At the time, CSX officials said sorting containers in North Baltimore added transit time to traffic that is price- and service-sensitive.

Instead, CSX said it would focus on point-to-point intermodal service in high-volume markets.

The BNSF-CSX agreement means that containers will no longer be trucked across Chicago but instead will move through the city by rail.

Intermodal analyst Larry Gross told Trains magazine that BNSF is trading the cost of trucking containers in Chicago for extended drayage from North Baltimore to destinations that include Detroit, Cleveland, Columbus, Cincinnati and Louisville.

Gross said there is not much drayage capacity at present in North Baltimore, which means the new service is likely initially to appeal to national trucking companies such as J.B. Hunt and Schneider National, which have their own drivers.

“It’s not like drayage capacity will magically appear,” Gross said, but added that he expects local drayage capacity to develop as intermodal volume increases in North Baltimore.

The logistics park CSX plans to develop in North Baltimore will offer opportunities for backhaul moves of agricultural products to Asia.

The park will be similar to logistics parks that BNSF has near its intermodal facilities in Joliet, Illinois; Oklahoma City; Kansas City; and Alliance, Texas.

In the short term, CSX said the number of trains serving the North Baltimore facility won’t change, but is expected to grow over time.

The service that starts on Oct. 29 will use existing intermodal trains that BNSF and CSX interchange in Chicago.

CSX Revamping Intermodal Service

August 16, 2018

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.

Most RRs Have Gained Traffic, But Not CSX

July 7, 2018

Five of the six Class 1 railroads in the United States have reported traffic gains in the first half of the year. The lone exception is CSX, which said its traffic is down 0.6 percent due to a decline in carload volume and the effect of intermodal service changes.

CSX last year jettisoned 7 percent of its intermodal volume by ending its hub-and-spoke intermodal network, which had its hub at the Northwest Ohio Intermodal Terminal in North  Baltimore.

The hub and spoke approach sought to build volume at low-volume origins and destinations. Nonetheless, CSX said its intermodal volume was up 1.5 percent for the first half of this year.

The traffic figures are reported by the railroads to the Association of American Railroads. BNSF was the biggest gainer, seeing traffic rise 5 percent.

Norfolk Southern led all carriers in intermodal traffic with an 8.2 percent gain for the first quarter and 7.9 percent for the first half of the year.

In the second quarter, NS led the industry in overall growth at 5.9 percent, edging out Canadian National’s 5.7 percent volume growth.

Some railroad industry observers said railroads have benefited from tight capacity in the trucking industry. Most of the gains in traffic posted by the railroads has been in intermodal.

Carload growth was strong in the second quarter, rising by 4.2 percent. It had been just 0.3 percent in the first quarter of this year.

CSX North Baltimore Terminal Takes on New Role as Intermodal Block Swapping Facility

March 2, 2018

The Northwest Ohio Intermodal Terminal will continue in operation, although as a block-swapping facility for Chicago interchange traffic and serving local intermodal traffic.

The terminal, which opened in 2011, had been built to serve as the centerpiece of a hub-and-spoke network designed to grow traffic in what had been low-density markets.

But CSX decided last year that it was difficult to make money in low-volume intermodal lanes because it meant containers were being handled at origin, at the hub-sorting terminal in North Baltimore, Ohio; and then at the destination.

CSX executives said this added cost, transit time and delays, particularly when trains had to travel on roundabout routes to reach the terminal.

Closing the North Baltimore terminal and ending the hub and spoke model cost CSX 7 percent of its intermodal traffic.

But CSX’s Dean Piacente, vice president of intermodal marketing and sale, said that the carrier has already replaced that lost traffic with more profitable business in higher-volume lanes.

But North Baltimore has taken on a new role of a block-swapping facility for intermodal traffic.

That began last week when CSX and an unnamed Western railroad began forwarding run-through eastbound intermodal traffic from Chicago to North Baltimore, where it is block-swapped for destinations on the CSX system.

Piacente said this will free capacity in Chicago and cut 24 to 48 hours from coast-to-coast transit times. Westbound block swapping will begin soon.

CSX Lays Out Intermodal Business Plan

March 2, 2018

During an investor’s conference held this week in New York City, CSX executives laid out a three-point change in the company’s intermodal business plan.

The railroad said the plan will create traffic growth, improve service and cut costs.

The new plan reiterates a previous decision to eliminate the hub-and-spoke strategy that had been implemented under former CSX CEO Michael Ward.

Instead, CSX is now focusing on point-to-point service with some low-density traffic being moved in daily merchandise trains rather than dedicated intermodal trains.

About a quarter of CSX intermodal traffic is now being moved in merchandise trains whereas a year ago is was less than 1 percent.

Under the new CSX operating plan, most intermodal traffic will move seven days a week.

CSX executives say that with 90 percent of its intermodal trains is running daily, which is an increase from 30 percent a year ago, the railroad can offer demand-based pricing based on the day of the week.

They said this should flatten peaks and valleys in intermodal loadings and thus help maintain balance in the network.

CSX has closed terminals that it described as underused in New Orleans, Evansville, Indiana; Mobile, Alabama; and Toronto.

It is expanding lift capacity at what it termed high-growth terminals in Pittsburgh; Atlanta; Cincinnati; Detroit; Memphis, Tennessee; and Winter Haven, Florida.

CSX will seek to take advantage of growing international traffic at East Coast ports, including creating partnerships with new inland port facilities in South Carolina, Georgia and New York.

These include a new terminal in Dillon, South Carolina, which is set to open next month; an inland port facility in Chatsworth, Georgia, set to open this fall; and a planned new terminal in Syracuse, New York.

Executives are banking on such matters as tightening truck capacity, driver shortages, rising fuel prices, and a growing economy to enable CSX to see mid-single digit range intermodal traffic growth this year.

“This is a very exciting time to be in the intermodal business at CSX,” said Dean Piacente, vice president of intermodal sales and marketing. “Our goal was to be everything to everybody. What we quickly determined is that we can’t do that.”