Posts Tagged ‘CSX intermodal 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.”

Harrison Says CSX is Doing Just Fine

November 30, 2017

CSX CEO E. Hunter Harrison told an investor’s conference on Wednesday that concerns about his railroad’s service are overblown and they are in part an attempt by shipping lobby groups to seek regulatory changes that would hurt the railroad industry.

E. Hunter Harrison

Harrison expressed pride in the job that CSX is doing. “The network is good,” Harrison said at the Credit Suisse Industrials Conference,

He cited improvements in terminal dwell time and average train speed figures that exceed what CSX posted last year.

Touching on a management shakeup that saw three high-level CSX executives leave earlier this month, Harrison said the CSX’s management team did not have the right chemistry.

Harrison has brought in James Foote, who worked with him at Canadian National about a decade ago, to oversee operations, and sales and marketing.

“Jim knows a helluva lot more about operating and precision scheduled railroading than some have given him credit for,” Harrison said. “At the same time, he’s got a unique talent on the marketing-sales side and happens to be a team builder. And that’s one of the things we really need.”

Foote is likely to become the CEO of CSX after Harrison retires. Harrison said he’s stepping back a bit to let Foote and his operating and marketing teams develop.

Speaking to the same conference, Foote said the challenge facing CSX is to get operations and sales to see the world in the same way.

He said both need to understand that precision scheduled railroading is about efficiency and improving customer service.

“This is not a plan to shrink the railroad into profitability, but to grow the business,” Foote said.

One area in which CSX has been making major changes is in its intermodal business.

It earlier closed its Northwest Ohio Intermodal Terminal and has eliminated numerous intermodal service lanes.

Noting that intermodal traffic has razor-thin profit margins, Harrison said he’s never been enthusiastic about the business and was critical of the hub-and-spoke intermodal strategy that sought to build density in low-volume lanes.

The railroad also has folded some intermodal traffic into manifest freights.

“We were doing some things that if you know anything about intermodal you don’t do,” Harrison said in reference to the Northwest Ohio terminal.

“You don’t switch intermodal stuff. That’s why intermodal stuff came about,” he said.

In some instances, Harrison said trains ran as much as 140 miles out of route to get to the Northwest Ohio terminal near North Baltimore. “That’s not smart to me,” Harrison said, adding that some traffic could be handled more directly on merchandise trains.

Harrison hinted that major changes are coming to the North Baltimore terminal, saying it might involve a western railroad looking to extend its reach into the East.

For now, CSX is using the Northwest Ohio terminal for block-swapping and is still handling some local intermodal containers there.

CSX also recently pulled out of a public-private partnership to increase clearances in the Howard Street Tunnel in Baltimore so that double-stacked container trains could use it to serve the Port of Baltimore.

In Harrison’s view, the East has too many ports seeking traffic. He also expressed a philosophical opposition to receiving government money.

Foote contended that CSX remains committed to intermodal traffic and will seek creative ways to profitably grow that business.

CSX has some underused routes that Harrison said will be sold or spun off. This includes all CSX trackage in Canada and related lines in the U.S.

Harrison said the CSX routes in Canada are not successful. In particular, a $100 million terminal near Montreal that CSX opened in December 2014 has underperformed, handling just a dozen containers per day.

“Everything we’ve got out there is going to go through some scrutiny,” Harrison said. “If it creates shareholder value to sell it, we’re going to sell it. If it creates shareholder value to keep it, we’re going to keep it.”

Harrison said he isn’t concerned if CSX competitors buy routes that it wants to sell.

“We’re not going to keep railroads for defensive purposes. I don’t believe in that,” Harrison said. “You’ve got a real weakness if you do that.”

CSX Acknowledges Taking New Approach to Intermodal

November 9, 2017

Intermodal business is not the only thing that CSX is looking to downsize. Appearing at two investor conferences this week, CSX Chief Financial Officer Frank Lonegro said the railroad is also looking at shedding some lines and curtailing capital expenditures and expansion projects.

“We are in the evaluation phase,” Lonegro said, noting that CEO E. Hunter Harrison has said everything is for sale at the right price.

“Things that are non-core to the long-term business that we have and the long-term success of CSX, those things will ultimately be for sale,” Lonegro told the Stephens Fall Investor Conference.

Lonegro stopped short of acknowledging that CSX is ending the hub and spoke model on which intermodal operations at its Northwest Ohio Intermodal Terminal near North Baltimore are based.

Lonegro said Harrison wants to emphasize intermodal service to higher-volume, point-to-point markets.

As for reports that CSX has canceled plans to build a similar intermodal terminal in North Carolina, he would only say that plans for that terminal are under review.

However, speaking to the Baird Global Industrial Conference this week, Lonegro did say that CSX plans to reduce its capital spending next year and beyond.

This includes storing locomotives and freight cars and putting on hold expansion projects as the railroad transitions into a precision scheduled railroading operating model.

Lonegro said CSX  is likely to hold off on intermodal terminal investments in favor of leveraging the investments the railroad has made over the past decade.

Lonegro’s comments were the first made by a high-ranking CSX executive since a management shakeup in late October that will send three top executives out the door on Nov. 15.

The management changes also led to the cancellation of an investor’s conference that was to have been hosted by CSX in Florida on Oct. 30.

Instead, Lonegro said, Harrison gathered about 30 high-level managers in the Sunshine State and spoke for about six hours during what was billed as a “restart meeting.”

Some railroad industry analysts believe the investor conference that was canceled will be held during the first quarter of 2018.

During his remarks this past week, Lonegro said the North Baltimore terminal was being used by CSX to funnel traffic to and from smaller intermodal markets.

However, CSX has now decided to shut it down because its handling cost reduce profit in a line of business with razor-thin profit margins.

Lonegro said intermodal is all about creating traffic density. “If it costs you more to create the density, then you shouldn’t artificially create the density,” he said.

CSX plans to adopt a different approach to what Lonegro described as “ultra-low density lanes” but did not elaborate on what that will be.

“Hunter’s driving force around the intermodal strategy is to improve the profitability of that segment of the business,” Lonegro said.

Thus far CSX had ended intermodal service in scores of low-volume origins-destination pairs and moved light intermodal traffic in other lanes into its merchandise network.

Is CSX Trying to Eat its Seed Corn?

November 6, 2017

Under normal circumstances, I don’t cover news beyond the states that surround Ohio, but there is a story out of Baltimore that is worth following because it may say much about what is going on with CSX these days.

Last week CSX said it would not contribute $145 million to a public-private partnership to enlarge the Howard Street Tunnel in Baltimore to accommodate double-stacked container trains.

When the Baltimore & Ohio Railroad built the tunnel 122 years ago, no one could have envisioned stack trains, let alone intermodal trains carrying containers and truck trailers.

Howard Street is just one example of the aging infrastructure in the Northeast transportation corridor between New York and Washington that needs to upgraded, rebuilt or replaced. It won’t be inexpensive.

You might think that CSX would be keen on modernizing the Howard Street Tunnel because it is an impediment to developing the I-95 corridor between New Jersey and Florida. And for a time it was.

Enlarging the Howard Street Tunnel would have benefited the Helen Delich Bentley Port of Baltimore, which has seen an increase in container traffic since the expansion of the Panama Canal.

Figures provided by the Maryland Port Administration show that the port handled a record 10.3 million tons of general freight and nearly 908,000 TEUs (20-foot-equivalent units) of containers in fiscal year 2017, which ended on June 30.

Then along came E. Hunter Harrison of precision scheduled railroading fame.

In announcing the decision to cancel its share of funding for enlarging Howard Street Tunnel, CSX put out a statement that referenced precision scheduled railroading – it has become a buzz phrase used as boilerplate in virtually every CSX statement and news release these days – and made a vague statement that the tunnel project “no longer justifies the level of investment required from CSX and our public partners at this time.”

But as Railway Age magazine pointed out, the statement did not fully explain why CSX decided to bail out on funding the Howard Street project.

When the magazine asked CSX to elaborate, its PR department replied with the same statement it had issued earlier. CSX is not going to explain itself any further.

Railway Age suggested two possible reasons for why CSX backed away from the Howard Street tunnel project.

One is that a fresh set of eyes in CSX management decided that the return on investment wasn’t worth $145 million because the volume of double-stack container traffic likely to use the tunnel would not be as high as the previous CSX management projected.

The other theory is that CSX management is dancing to the tune being played by hedge fund Mantle Ridge, which played a major role in getting Harrison installed as CEO last spring.

This theory is that CSX is diverting cash from infrastructure projects to a $1.5 billion stock buy-back program that will benefit Mantle Ridge, which acquired a sizable block of CSX stock in order to have enough clout to force the company to hire Harrison.

Media outlets have also been reporting that CSX has decided against building a new $270 million intermodal terminal near Rocky Mount, North Carolina.

Designed to develop intermodal business in the middle Atlantic region, the Carolina Connector was to be modeled after the Northwest Ohio Intermodal Terminal in North Baltimore, Ohio, which opened in 2010.

CSX has begun scaling back operations in North Baltimore and there are reports that it plans to end intermodal operations there on Nov. 11. Last year, North Baltimore handled nearly 30 percent of CSX’s intermodal traffic.

It is not clear yet what strategy CSX has in mind for its intermodal business other than it is abandoning the hub and spoke system of building traffic density at terminals such as North Baltimore and the proposed North Carolina facility.

Railway Age quoted railroad economist Jim Blaze as saying that without enlarging the Howard Street Tunnel, most of the talk about developing the I-95 corridor and diverting traffic from trucks is just talk.

“Stack trains are about 35 percent more efficient than single-level intermodal trains,” Blaze told Railway Age. “Without Baltimore as a double-stack route, other intermodal I-95 projects on CSX’s two-decade-long wish list are likely also now at risk. My questions: Where’s the traffic growth to come from for intermodal east of the Appalachian Mountains? What’s the back-up plan to grow the top line of the CSX income statement? This is a strategic economic issue.”

Blaze predicted that the “winners” of the CSX decision will be truckers as well as Norfolk Southern, which has been working for two decades to develop a double-stack route between the New York City/Northern New Jersey region and Florida.

The NS route is longer and more circuitous than the CSX route, but has clearance to handle stack trains all the way.

If the Mantle Ridge influence theory is true, it suggests that CSX is playing a game that has been played out many times before in corporate America.

In the 19th century, it was common for financiers to “milk” railroads for all the money they could before walking away and leaving the railroad a shadow of its former self.

That might not happen to CSX, but I also wonder if this is replay of another era not that long ago that was described in Rush Loving’s book, The Men Who Loved Trains.

That book described another CSX administration that was focused on expense control of its income statement and balance sheet assets to the detriment of infrastructure development.

It decided that short-term financial gain could be had by squeezing a little more life out of ancient signals and other infrastructure.

In this case, CSX has decided it can get by a little longer with a narrow tunnel in a key intermodal lane.

Rather than spending money to make money, CSX has decided to hoard and eat its seed corn.

Changing Operations Killed North Baltimore, Carolina Terminal, Baltimore Tunnel Project

November 3, 2017

The Northwest Ohio Intermodal Terminal near North Baltimore is not the only victim of changing priorities at CSX.

The railroad reportedly has decided not to build a new intermodal terminal at Rocky Mount, North Carolina, and is pulling out of a plan to enlarge the Howard Street Tunnel in Baltimore.

All three decisions resulted from the railroad’s shift to the precision scheduled railroading model favored by CEO E. Hunter Harrison.

The North Baltimore terminal and the planned Carolina Connector were conceived by previous management and premised on a hub-and-spoke intermodal strategy.

The Northwest Ohio terminal, which opened in June 2011 and cost $175 million to build, was CSX’s second-busiest in 2016, handling more than 809,000 containers, which was 29 percent of all intermodal moves on the railroad.

Workers at North Baltimore moved containers from train to train and did some block-swapping.

The hub-and-spoke concept was unique to CSX and created in an effort to build traffic between lesser volume points such as Columbus, Detroit, and Louisville, Kentucky.

It was similar to the way that airlines build connecting traffic at hub airports and how FedEx and UPS sort parcels at their hub airports.

CSX has not confirmed that it plans to end intermodal sorting operations at North Baltimore or that it has scuttled the planned North Caroline intermodal terminal.

It has acknowledged that for now it will not help fund the $425 million tunnel project in Baltimore.

That decision is curious because the Howard Street Tunnel is an impediment that prevents CSX from operating double-stack containers on its Interstate 95 Corridor between New Jersey and Florida.

What CSX has planned for its intermodal traffic remain shrouded in mystery.

The company had indicated it planned to discuss that at an investor’s conference in late October, but that was canceled after a top-level management shakeup. The conference has not yet been rescheduled.

Trains magazine reported that some intermodal traffic is being routed into the railroad’s merchandise traffic network and that high-volume traffic lanes are being moved away from North Baltimore.

The planned North Carolina terminal was to have served the Mid-Atlantic market. Unlike North Baltimore, which did not rely as much on local traffic, some 60 percent of the traffic at the Rocky Mount terminal was expected to be local traffic.

CSX has not yet closed any intermodal terminals that originate traffic, but is  relying more on intermodal block-swapping.

To illustrate how block-swapping works, Trains cited the example of recently created trains Q354 and Q355.

They operate between Portsmouth, Virginia, and Ashtabula, Ohio, using Norfolk Southern trackage rights west of New Castle, Pennsylvania.

These trains replaced Q135 and Q136, which previously operated through Akron between Portsmouth and North Baltimore.

Q355 sets off its Louisville and Chicago traffic at Connellsville, Pennsylvania, where it is picked up by another intermodal train. It also sets out cars at an intermodal terminal near Pittsburgh.

All other traffic, including containers bound for Cleveland, Columbus and Detroit are picked up in Ashtabula by the Q391, a manifest freight running from Buffalo, New York, Columbus.

The Q391 drops off its Cleveland and Detroit blocks in Cleveland and picks up Columbus-bound traffic at Willard.

Any traffic not bound for the Columbus intermodal terminal is left in Willard.

Trains said that containers might sit in Ashtabula for up to 20 hours, but the overall transit time remains the same as the old schedule via North Baltimore.

CSX Announces More Intermodal Cuts

October 19, 2017

The cuts just keep on coming. CSX this week outlined intermodal service lanes that it is closing in the Southeast and Northeast.

It plans to end outbound service from nine Southeast terminals to 20 destinations on and off the CSX network.

These include but are not limited to smaller markets in the Northeast, including Cleveland; Buffalo, New York; Syracuse, New York; and Montreal.

It will discontinue inbound service to those terminals from 11 originating points on and off its network.

Also being pruned is an interline service arrangement with Union Pacific. This includes service with UP to and from such points as Portland, Oregon; Oakland, California; Denver; Phoenix and points in Mexico.

The affected terminals include five in Florida; Atlanta; Charleston, South Carolina; Savannah, Georgia.; and Memphis, Tennessee.

These terminals will continue to have intermodal service to more than 110 lanes and receive containers from more than 160 lanes.

In a notice to shippers, CSX described the changes as an effort “to improve service, efficiency, and better align product demand.”

CSX spokesman Rob Doolittle acknowledged that the changes have come about due to a review of intermodal operations as the carrier moves to a precision scheduled railroading model.

“We are working to identify opportunities where we can improve service to our intermodal customers by leveraging other parts of our scheduled network to provide faster and more efficient service,” Doolittle said. “In some cases, this may mean using scheduled merchandise trains to support some intermodal customers’ requirements, and reducing the intermediate handling of intermodal traffic when possible, creating more reliable service and faster transit times.”

The changes mean that the Northwest Ohio Intermodal Terminal near North Baltimore, will have fewer containers to handle. Last year North Baltimore  handled 809,254 lifts, making it the second-busiest terminal on CSX.

More information about the markets that CSX is exiting can be found at

CSX Likely to Close Willard Hump, Will Reduce Scope of Intermodal Operations in Columbus

October 18, 2017

CSX is curtailing intermodal service to Columbus and is considering ending humping of freight cars at its yard in Willard.

In a notice to customers, CSX said it would end outbound intermodal service from Columbus to nearly two dozen destinations. However, only a handful of inbound intermodal lanes are being ended.

The curtailments are seen as further evidence of plans to reduce operations at the CSX Northwest Ohio intermodal terminal near North Baltimore.

CSX is also scaling back intermodal service in Detroit and Louisville, Kentucky.

The railroad has not yet made a public announcement on the future of its North Baltimore facility.

However, Trains magazine has cited unnamed sources as saying that its role in sorting containers is facing sharp cutbacks as CSX shifts to an operating model of precision scheduled railroading.

During a conference call to discuss the carrier’s third quarter earnings, CSX CEO E. Hunter Harrison sidestepped a question about the future of the North Baltimore terminal, saying more details would be provided at a meeting of investors and stock analysts on Oct. 29-30 in Palm Beach, Florida.

“Everything we’re doing is under review,” Harrison said. “I can’t tell you what the outcome of that will be. We don’t go in there and look at an issue and have an answer. We go in there to look and develop an answer, and so we’ll see what it brings.”

As for the future of humping operations at Willard, CSX has been shifting to flat switching at most of its dozen hump yards.

It has apparently decided to retain humping operations in Cincinnati; Indianapolis; Selkirk, New York; and Waycross, Georgia.

Earlier this year, CSX said it would close the hump in Selkirk and ceased humping at Avon Yard near Indianapolis. It later reopened the Avon hump after the western end of its network became severely congested.

Harrison said during the conference call that Willard will “probably” be converted to a flat-switching in the near future.

He indicated that the railroad is developing trip plans for every carload that it moves. Those plans are expected to be revealed by the middle of 2018 in order to allow CSX to further refine its operating plan and improve service.

Harrison also said during the conference call that he has resumed his “Hunter Camps,” which are  intensive sessions involving training field operating personnel to teach them the finer points of precision scheduled railroading.

Although Harrison had told the CSX board of directors that he didn’t think he’d have time to continue the camps their response was that he didn’t have time not to run the camps.

Harrison said he has had to rely more on his operating team to develop disciples of precision scheduled railroading, but “we’ll get the same type results.”

CSX Scaling Back North Baltimore Terminal

October 14, 2017

CSX is scaling back operations at its Northwest Ohio intermodal facility near North Baltimore, Trains magazine reported on Friday.

The magazine quoted unnamed sources who said that the facility may survive as a block swapping point but its hub and spoke operation is yet another victim of the railroad’s move to precision scheduled railroading as traffic is diverted away from it.

The $175 million terminal opened in summer 2011. It was based on a concept widely practiced in the airline industry but which is unique in railroad intermodal operations.

Trains would converge on North Baltimore from various cities and exchange containers.

The theory behind this was that it would enable the development of business in cities lacking enough density to justify point-to-point trains.

Specially, CSX cited cities such as Detroit and Louisville, Kentucky. Now CSX plans to pare down how much intermodal business it handles at both cities to points in California, Texas, Mexico, Florida as well as Montreal and Syracuse, New York.

Located on the former Baltimore & Ohio mainline between Chicago and Pittsburgh, the North Baltimore terminal had been handling 30 plus trains a day using state of the art loading and unloading equipment and sorting practices. It employs 300.

CSX has not made public its plans for the terminal. “CSX does not have any plans to discontinue operations at the North Baltimore facility,” said spokesman Rob Doolittle. “We are reviewing our train plan at the North Baltimore terminal to identify opportunities to provide better service to our intermodal customers, and CSX will communicate any changes that may be made directly to affected customers, employees, and other stakeholders.”