Posts Tagged ‘CSX service metrics’

CSX OT Performance Continues to Lag

July 19, 2018

Amid the mostly positive financial results that CSX reported this week was a more mixed picture on how the railroad is doing from an operating standpoint.

During the second quarter of 2018, CSX said it showed improvements in operations, but continues to lag in on-time performance.

Compared with the second quarter of 2017, CSX on-time originations fell 2 points, to 83 percent, while on-time arrivals declined by 2 points, to 59 percent for the quarter.

Although trains departed within two hours of schedule more than 90 percent of the time, CSX CEO James Foote told investors and Wall Street analysts this week that that wasn’t good enough.

“We don’t get them across the network as effectively as we should,” Foote said.

CSX create trip plans for freight shipments and monitors the progress of carload and intermodal containers in an effort to identify and prevent service failures.

Foote said compliance with the trip plans is now in the 60 percent range but he wants to see it reach 100 percent.

To get there, Foote said CSX personnel need to recognize service failures such as a car that missed a scheduled connection.

When service failures occur, Foote wants CSX workers to go above and beyond the call of duty to get the car that missed its connection onto the next train.

That will be easier said than done and Foote conceded that the work culture at CSX will need to change to achieve that.

As Foote sees it, more reliable service will result in traffic growth as well as enable CSX to charge higher rates.

During the second quarter of 2018, the average speed of CSX trains rose by 15 percent to 17.4 mph.

Terminal dwell time fell by 10 percent, to 9.7 hours. However, CSX measures terminal dwell time by a different standard than that used by the Association of American Railroads.

Average train length also increased 13 percent compared with the second quarter of 2017.

“Moving all three of these metrics at the same time is no easy task,” Foote said.

Foote Expects Reliable Service to Equal Traffic Growth

June 2, 2018

CSX head James Foot told investors this week that with service reliability will come traffic growth.

Speaking at the Bernstein Strategic Decisions Conference, the CSX CEO said the railroad’s improving performance metrics show that the precision scheduled railroading model can work at CSX with its vast and far-flung route network.

“We’re in the early stages of a turnaround and making great progress toward our goals right now,” Foote said.

Among the numbers Foote cited was an industry-leading first-quarter operating ratio, record average velocity and dwell times, and carrying the same tonnage as last year with 1,000 fewer locomotives.

Still, Foote acknowledged that on-time performance is not where it needs to be and reliability of service needs to be increased.

Saying that too many industry observers are focused on weekly carload reports, Foote said CSX is only seeking profitable traffic.

“You can easily add a ton of volume to your railroad and look good on the charts,” he said. “But it’s more of a challenge to put higher-margin business on the railroad.”

Of all the traffic that CSX handles, Foote said his only concern is for domestic utility coal.

CSX has lost nearly $1 billion in revenue due to lost coal business as utilities increased their use of lower-cost natural gas. Foote expects the export coal business, though, to remain strong.

In an example of how the railroad’s new operating model has changed thing for the better for customers, Foote said cycle times for export coal train sets have been cut in half.

The use of distributed power has enabled CSX to combine three trains into two longer trains.

The current operating model creates a trip plan for each individual carload and intermodal container.

Foote said this approach emphasizes consistent on-time delivery for the customer rather than railroad-centric measures as train performance.

CSX is now providing a baseload service for merchandise customers, who pay a premium for trucks to handle other freight to make sure that it arrives on time.

Foote said that as the CSX merchandise network becomes more reliable, shippers will convert more traffic from road to rail.

Asked what effect the development of autonomous trucks might have on railroads, Foote said railroads are technologically ahead of trucking due to positive train control, line side sensors, a private right-of-way, and locomotive technology such as Trip Optimizer that essentially acts like cruise control.

“We could run the railroad with robots today, leveraging all of this technology,” Foote said.

One thing technology can’t control, though, is weather. Foote said CSX needs to harden its infrastructure to be more resilient in the face of increasingly powerful and more frequent storms.

In instances, areas have flooded that never flooded before.

CSX Outlines 2018 Service Plan

March 30, 2018

In response to a U.S. Surface Transportation board request for information, CSX CEO James M. Foote has written to the board to tout what he described as the railroad’s recovery from its service issues of 2017.

The letter was in response to a board request to all Class 1 railroads operating in the United States to outline their service plans for the remainder of the year.

The STB said the request for information came in the wake of complaints the board has received from shipper organizations about deteriorating service quality on railroads generally.

In his letter to the STB, Foote thanked the agency for is recent finding that CSX had made  “marked improvement” in its service metrics.

Foote said CSX service metrics in recent weeks have been above 2017 averages “and we’ve achieved record levels for velocity, car order fulfillment and dwell.”

The letter recounted CSX plans in various areas as requested by the STB.

CSX has 2,900 active locomotives and 600 additional locomotives stored and serviceable as needed.

Locomotive power availability has been 99 percent, “demonstrating that our locomotive levels are consistently meeting train service demands,” the letter said.

CSX said that its locomotive fleet is adequate to meet customer demand and it has no plans to acquire locomotives in 2018.

In the area of employee resources, CSX said it has 8,474 train and engine employees along with more than 900 employees on furlough who could be recalled if needed.

Foote said re-crew rates are at a historic low rate of less than 2 percent while crew availability has been 95 percent in recent months. CSX does not expect to increase its T&E headcount this year.

Foote said the precision scheduled railroading model places particular emphasis on the responsibility of local managerial teams to ensure a safe, efficient operation that meets customer needs.

The carrier is training 50 new trainmasters who will be deployed throughout the network to fill vacancies and strengthen field management.

Another focus of precision scheduled railroading, Foote said, is end-to-end transit and meeting customer expectations for the complete movement.

“Local service is a key element of that complete movement, and we have made significant improvements in this critical area with terminal productivity and performance measures at normal, healthy levels across the network,” Foote wrote.

CSX said it has made progress on the development and testing of an end-to-end trip plan compliance measurement that will track cars in all operating circumstances and allow for real-time management and decision-making to maximize delivery as scheduled.

“While the development of this new measure is under way, customers continue to have readily available access to CSX capabilities and performance via ShipCSX, customized to that shipper’s freight needs and patterns,” Foote wrote. “All customers who use ShipCSX currently have access to the trip plan for a given car in scheduled service and can view this information to plan, ship, and trace their shipments. Our online tools allow customers to monitor their service schedules, provide on-demand railcar tracking with an estimated time of arrival, as well as view planned and historical transits that can be quickly analyzed for transit performance and exceptions.”

Foote told the STB that CSX expects total traffic growth in 2018 to be flat when compared with last year.

He said thus far in 2018, traffic has been what the company expected with the exception of higher export coal demand driven by global market conditions.

Foote pledged to continue talking with its customers, saying he has met with shippers at the National Freight Transportation Association Conference and that the railroad’s sales and marketing staff regularly attend customer forums to provide updates and receive customer feedback.

“Our Customer Service personnel address customer concerns when needed to supplement the direct outreach channels of local operations and sales and marketing,” Foote wrote. “We also communicate with our customers through the electronic platforms of ShipCSX, Service Advisories, and Intermodal Fast Facts.”

In regards to capacity constraints, CSX argued that its network and terminals are fluid.

“We have effectively delivered service to our customers through extended winter conditions, and we are well-prepared to handle the seasonal rise in volumes during the second quarter,”
Foote wrote.

He also cited working with other railroads to create plans for interchange and blocking in and outside of Chicago to improve interline connections.

“Whenever practicable, we re-route traffic through less-congested interchange locations and assemble blocks of traffic for destinations further into our respective networks—thus reducing congestion and overall transit time,” Foote said.

He said that with intermodal demand rising across the industry there has been longer container dwell times in terminals.

“To ensure ongoing terminal fluidity and support asset utilization that benefits both CSX and customers, we have adjusted intermodal terminal storage policies and are working with customers to more effectively align terminal capacity with trucking operations,” Foote wrote.

Chemical Industry Critical of CSX Service

February 13, 2018

A chemical industry trade group told the U.S. Surface Transportation Board last week that its members continue to experience significant service disruptions on CSX.

In a letter to the STB, Cal Dooley, CEO of the American Chemistry Council, said that companies have in the past two months been forced to curtail production or divert shipments to truck in order to prevent shutdowns.

“While many companies report that service had improved since the summer/fall of last year, it is clear that service is still not where it needs to be,” Dooley wrote.

The letter to the STB was based on a survey the trade group conducted of its members in December and January.

Dooley said that some members have seen improvements since last summer but overall service has not returned to normal.

“While CSX’s January 13 letter to the Board notes ‘a remarkable rate of positive change’ and cites selected service metrics that exceed 2016 levels, few benefits of CSX’s operational changes have actually been realized by its customers,” Dooley wrote. “In fact, the vast majority of ACC member responses indicate that current CSX service is worse than it was prior to the implementation of precision railroading.”

Dooley said that many of his group’s members fear that paying more for less reflects a “new normal” for CSX service.

Examples of shoddy service cited in the letter included a Midwest plant reducing production  by 90 percent due to erratic deliveries of raw material.

Another company said it shifted to trucks to prevent plant shutdowns in the Northeast due to a bad weather and CSX delays.

A Southeastern company said local switching delays and route changes have increased transit times by four or five days.

In a related vein, a Northeast shipper said a shipment that normally takes 10 days took 55 days due to multiple delays on CSX.

Another shipper said loaded cars have sat in yards for a week or more while some said they have seen reduced local service and higher car demurrage and switching fees.

CSX has been arguing for the past year that once it works out its operating changes that shippers will benefit from faster and more reliable service.

In response to the chemical association letter, CSX said in a statement that it “consistently strives to meet customer expectations and we believe that concerns about our service can best be resolved on a customer-by-customer basis and by focusing on a customer’s individual needs.”

The statement also restated a report that railroad made to the STB recently that cited five consecutive months of improvement in train velocity and dwell time.

CSX Touts Improving Service Metrics

February 9, 2018

In its latest report to the U.S. Surface Transportation board, CSX continued to trumpet its service metrics, saying that is operating better than it was a year ago.

In the report dated Feb. 6, CSX said on-time performance has averaged 75 percent so far this year, well above the 61 percent posted in the first quarter of 2017

Average velocity for January 2018 was 18 miles per hour, up 19 percent from the 2017 average of 15.1 mph. January’s average terminal dwell of 10.5 hours was 7 percent below 2017 levels.

The carrier said it sidelined 139 road locomotives last month “in concert with network velocity improvement.”

CSX has 2,886 active road locomotives, a decline of 482 units from last year’s average.

At the same time, CSX said it had 8,509 crew members in service last week, down 9 percent from the average of 9,365 in 2017.

The report said its car-order fulfillment rate is averaging 99 percent so far this year. The percentage of cars pulled or placed at customer locations based on daily customer requests, is 84 percent this year, down from 87 percent in 2017.

CSX said it is receiving an average of 236 problem logs per day, with most of the complaints about delayed cars. It averaged 284 problem logs per day last year, which peaked at 570 per day last summer.

Foote Touts Operating Improvements in STB Letter

January 5, 2018

CSX CEO James Foot told the U.S. Surface Transportation Board this week that terminals and line hauling of the carrier are now fluid with velocity and dwell time substantially improved.

Now the railroad is turning its attention to improving local service and yards.

The letter dated Jan. 3 was in response to a request made by the STB last month for CSX to respond to what the Board termed persistent complaints about service from shippers, particularly delays occurring during the last mile of delivery.

In response, Foote said CSX has created a virtuous cycle of faster trains, more efficient yard operations and more on-time originations.

This has meant fewer locomotives and cars needed to handle the same amount of freight. “In short, what you have is a better-run railroad,” Foote wrote.

Foote said CSX managers do not expect to make significant operational changes in 2018.

However, management will continue to fine tune its operations. He cited as an example testing end-to-end trip plans for every carload by the end of March.

The new railroad chief executive said he is committed to listening to customers and communicating with them regularly.

As for that last mile issue, Foot said local service metrics, including car-order fulfillment, currently exceed those metrics posted in 2016.

“ . . . we are targeting enhancements in yards, local service, and efficient switching,” Foote wrote. “Accordingly, we expect ongoing improvement in our local service measurements concurrent with other performance measures.”

Yet Trains magazine on its website quoted an unnamed merchandise shipper who said his company in the eastern United States has been playing whack-a-mole with CSX.

As soon as a service problem is resolved in one area another crops up elsewhere. “We are better in Florida and New York now but issues are [now occurring] in the Carolinas as we speak,” the shipper said. “So I like the new metrics, especially around door-to-door and car fulfillment.”

The magazine quoted another unnamed merchandise shipper who said that it is not seeing the faster, more reliable service that CSX says it’s providing.

“Our cycle times are still longer today than they were a year ago,” the shipper says. “I suspect this may simply be their new normal and longer transit times are something we have to get used to. We’re actually planning to add some cars back into our fleet in the first quarter of 2018 to address this.”

Some shippers said CSX has slashed the frequency of local switching, something that began when Michael Ward was CEO and kicking off a cost-cutting campaign.

“CSX is being run for the benefit of Wall Street now and not Main Street,” one shipper said.

However, some shippers told Trains they are starting to see faster, more efficient service. On the western reaches of the network operations have remained smooth despite changes implemented last month that, among other things, significantly reduced yard operations in Evansville, Indiana, on the route between Chicago and the Southeast.