Posts Tagged ‘CSX’

CSX 1st Quarter Net Income up 2%

April 21, 2017

CSX said on Thursday that its first quarter 2017 net income rose 2 percent to $362 million, or 39 cents per share.

In a news release, CSX said that discounting a $173 million restructuring charge, the adjusted earnings were 51 cents per share.

Those numbers compare with net income of $356 million, or 37 cents per share in the first quarter of 2016.

During the first quarter of this year revenue was up 10 percent to $2.87 billion compared with $2.6 billion in 2016.

CSX attributed the revenue growth to volume growth across most markets, overall core pricing gains and increased fuel recovery.

The railroad believes that its second quarter outlook is favorable because of anticipated growth in most markets, including agriculture and food, export coal, fertilizers, forest products, intermodal and minerals.

The business outlook is neutral outlook for automotive, chemicals, metals and equipment. The domestic coal market has an unfavorable outlook for domestic coal.

CEO E. Hunter Harrison said during a conference call that CSX expects to have an operating ratio in 2017 in the mid-60s, earnings per share growth of around 25 percent off the 2016 reported base of $1.81, and free cash flow before dividends of around $1.5 billion.

The CSX board of directors have approved a $1 billion share repurchase program, which management expects to complete by the end of the first quarter of 2018.

CSX began buying back shares of its stock in April 2015 and has spent $2 billion on that to date.

As for capital spending, CSX now expects to invest $2.1 billion in 2017, including approximately $270 million for Positive Train Control.

More than half of the 2017 capital spending will be used to sustain core infrastructure with the balance allocated to projects supporting profitable growth, efficiency initiatives and service improvements.

CSX trimmed its capital budget for this year by $100 million. Some planned capital projects are being paused as management continues to study its terminal and operating plans.

As expected, CSX plans to continue creating longer passing sidings, particularly in the Chicago-Florida corridor where train lengths are limited by 6,500-foot sidings.

Under the Michael Ward administration, CSX had announced plans to extending or add 27 sidings in that corridor. Harrison expects to move some sidings to create a longer siding elsewhere.

“If we have sidings that are too short for the longer trains, we’re certainly not going to leave those sitting in the ground and not being utilized,” he said. “We’ll pick up one 6,500-foot siding and move it 15 miles down the railroad and put it with another 6,500. We’ve got a 13,000-foot siding.”

Since Harrison took over as CEO last month, CSX has laid off 765 employees – about 3 percent of its workforce – and further announcements are expected of continued cost cutting initiatives.

CSX chopped a record $420 million of expenses in 2016 and expects to top that this year.

Among the expected moves will be consolidating the railroad’s nine divisions. Also likely to be consolidated are the nine dispatching centers CSX now operates.

The streamlining of operations will result in 550 of the railroad’s 4,400 locomotives being removed from service and stored by the end of the summer. CSX has already mothballed another 550 locomotives.  About 25,000 freight cars will be stored.

CSX wants to impose a balance of operations over seven days a week and reduce the average terminal dwell time from 26 hours to somewhere in the high teens.

During the conference call, Harrison suggested that he does not expect any mergers or acquisitions to occur during the four-year life of his contract.

Harrison Gives Preview of What’s in Store at CSX

April 21, 2017

CSX CEO E. Hunter Harrison gave a preview on Thursday about what is in store at the railroad in the coming months and years.

Speaking during a conference call with Wall Street investors, Harrison called the CSX network a bowl of spaghetti when compared to the linear-oriented systems he oversaw at Canadian Pacific, Canadian National and Illinois Central.

E. Hunter Harrison

Although he thinks that CSX does well in moving intermodal trains, Harrison believes merchandise freight needs to move faster.

The average speed of CSX merchandise freight is now 18 mph between terminals, but Harrison believes it could be boosted to 27 to 28 mph.

One way to boost transit times is by skipping terminals. Ultimately, Harrison wants to see CSX provide merchandise service that is on a par with trucks.

CSX Chief Operating Officer Cindy Sanborn said CSX has made two significant operating changes since Harrison arrived.

Some traffic that had been moving in unit trains has been merged into merchandise trains and four of the railroad’s 12 hump yards have been converted to flat switching.

Sanborn said the changes will allow CSX to provide seven-day-a-week service, bring balance to the system, increase train length, cut terminal dwell time and reduce the time that freight spends in transit.

CSX is expected to continue closing humps although Sanborn said she doesn’t know by how many because management is studying each yard individually.

Harrison described hump yards as a relic of an era when a much higher percentage of rail freight traffic was merchandise service.

In a related matter, Harrison said CSX will consolidate yards in areas where multiple yards now exist and sell the land used by yards that are closed.

There was speculation earlier that CSX would sell some secondary lines, but Harrison said he doesn’t expect any major line sales in 2017 because management is focusing on improving operations of the current network.

Other steps CSX plans to make, Harrison said, include having fewer train sets devoted to unit coal train service, but having faster cyling of cars between mines and customers.

CSX is not looking to drop some of its less-profitable merchandise traffic as Canadian Pacific did while Harrison was that railroad’s CEO.

“No, we’re not looking at demarketing,” he said. “We’re looking at marketing.”

As predicted, Harrison will trim the CSX work force. The railroad now has a hiring freeze in place and expects to lose 9 percent of its work force through attrition.

He added, though, that management does not have a target for work force cuts.

Another labor-related change may see CSX pull out of national negotiations with labor unions and instead bargain directly with the unions.

Harrison would like to see train and engine crews paid by the hour in return for the company offering job guarantees. Ultimately, Harrison said he wants to lower T&E costs by 30 to 35 percent.

One area in which Harrison does not expect change is the number of crew members on each train. “I’m not a one-man crew advocate,” he said. “ . . . to take a 20,000 ton train on line of road, with one person, I don’t think it’s good business,”

Sounding like a union officer, Harrison said there are safety issues with one-person crews and he sees the value of having extra set of eyes and ears in the cab.

If one crew member had to deal with such things as a broken air hose or a knuckle failure, that could result in delays.

Harrison said one-person crews might make sense in some situation, citing switching at mines.

CSX May be Ready to Reopen ex-Clinchfield Line

April 13, 2017

With hump operations closing, CSX is seeking alternative routes to move traffic, which has caused it to look at the dormant former Clinchfield line between Russell, Kentucky, and Bostic, North Carolina.

Trains magazine reported this week that an empty tank car train ran north on the ex-Clinchfield, which the railroad’s previous management had closed last October.

At the time, CSX said it was concentrating on a triangle of routes linking New York and Chicago, Chicago and Florida, and Florida and New York.

It is not publicly known yet if new CSX CEO E. Hunter Harrison and his team will continue to follow the CSX of Tomorrow strategy implemented during the administration of Michael Ward.

Since Harrison became CEO last month, CSX has closed three humps in favor of flat switching at yards in Atlanta, Louisville, Kentucky; and Toledo.

Until it was idled, the Clinchfield had hosted about a dozen coal trains a day as well as a few manifest and intermodal trains.

Trains of 5 Railroads in 6 Hours

April 6, 2017

New Jersey Transit in Newark station.

I went railfanning out at Bound Brook, New Jersey, last week. I took New Jersey Transit to get there.

At Bound Brook, the old Central of New Jersey and the old Lehigh Valley mainlines are about 50 feet apart.

You can stand on the NJT platform and photograph both lines. The LV line today is Conrail Shared Assets, hosting Norfolk Southern, CSX and local Conrail action.

The CNJ line is strictly the domain of NJT. It was used by the Baltimore & Ohio, Reading and CNJ.

After Conrail formed the CNJ eventually went to NJT and the Reading/B&O connection was switched over to connect with the LV line instead. Any local freight service is handled by NS.

In my travels I also had to change trains at Penn Station in Newark, New Jersey. Here are some shots from the day, including short line Morristown & Erie bringing freight down to Harrison, New Jersey via the old Lackawanna mainline, for interchange with CSX.

It’s a 1964 Alco C424 in actual freight service in 2017. The Pennsylvania Railroad bench is in Penn Station. Some things change, some remain the same.

In all, I made photographs  of five railroads in six hours.

Article and Photographs by Jack Norris

 

Empire Service Skeds Modified by CSX Track Work

April 6, 2017

Some Empire Service trains will operate on modified schedules between April 9 and Sept. 4 due to CSX track work.

In a service advisory, Amtrak did not identify the trains affected but said some trains will depart as much as 25 minutes early.

Between April 9 and May 10, Amtrak said two Empire Service trains will operate between Niagara Falls and Albany-Rensselaer, New York, on Sunday through Wednesday.

Three Empire Service trains will operate between those points on Thursday through Saturday.

Amtrak said that schedules will change throughout the track work period.

CSX Sets Annual Meeting for June 5

April 5, 2017

Under normal circumstances, the CSX annual meeting, which has been set for June 5 in Richmond, Virginia, would mean little except to the company’s shareholders and those who take a keen interest in the activities of the railroad.

But among the issues to be decided at the meeting is whether CSX should reimburse hedge fund Mantle Ridge the $55 million that it paid CSX CEO E. Hunter Harrison to retire early from Canadian Pacific. In doing that, Harrison forfeited various bonuses from CP.

If the shareholders vote against paying Mantle Ridge, Harrison has said he will step down as CSX CEO.

Harrison is also demanding $29 million from CSX and wants it to pay for a tax bill that he has incurred.

Many observers expect CSX shareholders to approve the compensation demands because CSX stock has risen 30 percent in value since word got out that Mantle Ridge was seeking to install Harrison as CSX CEO.

The CSX board of directors has not taken a position on how shareholders should vote other than to note that there are arguments for and against giving Harrison the money he wants.

CSX Recognizes 71 Chemical Customers

April 5, 2017

CSX has recognized 71 customers with its annual Chemical Safety Award for their commitment to the safe transportation of hazardous materials.

In a news release, CSX said the awards, which are being given for the 23rd year, recognize customers who ship more than 600 carloads of hazardous materials during the year without a release due to controllable factors.

The award recognizes commitment to such safe procedures as securing valves and closures properly and safe loading.

Azko Nobel Chemicals Inc. and Kemira were both presented with awards for 10 years of success. In addition, five-year recognitions were given to Arizona Chemical Co. LLC, Aux Sable Liquid Products Inc., Cargill, Celanese, CHS Inc., ExxonMobil Chemical Co., Horsehead Corp., Linde LLC, MarkWest Hydrocarbon Inc., Nucor Corp.; PBF Energy Company LLC, SABIC Innovative Plastics and United Refining Co.

Additional honorees included AdvanSix Inc., Americas Styrenics LLC, Arkema Inc., Ashta Chemicals Inc., BP Products North America Inc., Bunge; Canal Terminal Co., Cardinal Ethanol LLC, CF Industries, Chevron Phillips Chemical Co., Chevron Products Co., Citgo Petroleum Corp., Cornerstone Chemical Co., Covestro LLC, Eastman Chemical Co., Eco-Energy LLC, Eighty-Eight Oil LLC, Enlink Midstream Operating LP, Evonik Industries, Flint Hills Resources, Gibson Energy, Green Plains Inc., Hess Corp., Huntsman International LLC and Husky Energy.

Also recognized were INEOS Nitriles, INEOS Phenol, INEOS Styrolution America LLC, Kinder Morgan, Koppers, Louis Dreyfus Commodities LLC, LyondellBassell, Marathon Petroleum Corp., Monument Chemical, The Mosaic Co., Nan Ya Plastics Corp., NGL Supply Wholesale LLC, NorFalco, NOVA Chemicals Inc., Occidental Chemical Corp., Odjfell, Olin Corp., Pacific Ethanol Inc., PotashCorp., Pembina Pipeline Corp., Philadelphia Energy Solutions, PVS Chemicals Inc., Southern States Chemical, Statoil North America Inc., Tesoro Corp., The Chemours Co., Twin Eagle Resource Management, US Ecology, Valero, Westlake Chemical Corp. and Williams Ohio Valley Midstream LLC.

Wabash H Unit, Citirail Locomotives Highlight 13th ARRC Dave McKay Day Outing in Berea

April 3, 2017

Late day sun illuminates the nose of a westbound CSX auto rack train during the waning hours of the annual Dave McKay Day in Berea.

It took nearly all day and six years but we finally got one. A Norfolk Southern heritage locomotive led a train through Berea during the annual Akron Railroad Club Dave McKay Day outing last Saturday.

NS No. 1070, the SD70ACe that pays tribute to the Wabash Railroad, was on the point of eastbound intermodal train No. 294 through Berea at 6:19 p.m.

We had known since mid-morning that it was coming and it would be a late afternoon train.

ARRC member Todd Dillon, who did not attend the event, sent some timely texts updating us on the progress of the Wabash unit.

So knew that THE WABASH IS COMING! THE WABASH IS COMING!

But when it finally got here it caught those of us still in Berea unprepared and no one got a photograph of it.

It was but one of the highlights of the 13th McKay Day, the all-day outing in Berea on the first Saturday in April to remember the late David McKay, who served as ARRC president between 1993 and 2004.

Twelve ARRC members and guests attended the event, which featured overcast skies and chilly temperatures for most of the day.

The sun finally broke through at 5:27 p.m. With the clouds having moved out, the temperatures at last reached the 50s. If only it had been that nice in the morning.

We recorded 49 movements between 7:30 a.m. and 8 p.m., but that comes with a couple of asterisks.

The ARRC’s newest member, Jack Norris, watched Amtrak 48, the eastbound Lake Shore Limited, pass through Berea on the Berea webcam from his home in New Jersey.

Two of the trains in the tally were ones I spotted while en route to Berea, an eastbound NS loaded coal train at CP Max and an eastbound CSX train that I could see from Interstate 480 that was waiting for permission to go through the tunnels.

That train, Q260, would cause more than its share of headaches for the first trick IG dispatcher because it went into emergency twice before reaching Collinwood Yard.

That resulted in backed-up trains and a lot of discussion over the radio about the proper procedures for inspecting a train that goes into emergency that has a load of hazardous materials.

At one point the dispatcher read on the air word for word the applicable rule from the rule book. During another conversation he said he had checked with his boss who had checked with his boss.

Some of the discussion involved whether the Q123 could pass the Q260 and if so at what speed.

Also figuring into the situation was a maintainer in a track car who was following the Q260 and doing track inspections in its wake.

Early in the day that same dispatcher had told the maintainer in one of many radio conversations they had in which the latter received track warrant authority that he (dispatcher) was going to go to his favorite brewery in Indianapolis once he finished his shift to help it celebrate its first anniversary.

Given the day he had had that beer must have tasted pretty good once he got to the bar.

In another conversation the IG dispatcher revealed that many operational changes are occurring, including the abolition of some symbol freights.

Road freights are now going to handle switching in some places, e.g., 84 Lumber in the Cleveland suburbs, rather than a local.

The road freights are also going to start handling stone trains. If I understood the dispatcher correctly, the number of classification tracks at Avon Yard west of Indianapolis is being reduced.

Such is life these days in E. Hunter Harrison land where the employees must feel that they are the hunted.

At the same time that the first trick IG dispatcher had his hands full, the first trick NS Toledo East dispatcher had a train that left Cleveland with no re-crew available in Toledo.

He advised the crew of gondola train 60S to take it easy coming toward Toledo.

Later, he said he would be putting the 60S into a siding to kill time. The crew probably would have preferred to have gotten to Toledo in due time and then gone off duty. But it didn’t work out that way.

Among the other interesting occurrences throughout the day was an involved maneuver involving the 20R picking up a new locomotive at Rockport Yard to replace a unit that was experiencing mechanical troubles.

NS sent an eastbound Herzog ballast train through Berea in the afternoon that was the subject of a lot of radio traffic.

It was a moderately good day for foreign power with BNSF locomotives showing up on two trains, Canadian National power leading a westbound CSX ethanol train and a lone Union Pacific unit trailing in the motive power consist of an NS train.

But the sighting of the day was a pair of Citirail (CREX) ES44AC units leading CSX train Q384.

As for the Wabash H unit, the plan was for four of us – Craig Sanders, Marty Surdyk, Paul Woodring and Alan Nagy – who planned to have dinner at the Berea Union Depot Taverne to go there at 5 p.m. We figured that the NS 1070 would be coming along after 6, probably closer to 6:30 p.m.

After eating we could get into position to get photographs of the first H unit to lead a train through Berea on a McKay Day.

We’ve seen heritage units on McKay Day in the past, most notably the Wabash H unit in 2014. But it had been trailing.

The plan might have worked had we gotten to the restaurant at exactly 5. But we decided to wait for the westbound CSX Q009, which didn’t arrive until 5:11. Two other NS trains also passed by and we didn’t get to the depot and seated until about 5:20.

As the Wabash unit was leading No. 294 through Berea we had just gotten up to leave. Not everyone in the party saw it.

Had anyone been really ambitious and gotten to Berea in the early hours of McKay Day he would have seen three other heritage units.

The New York Central H unit led NS train 54K through town during the darkness hours. It was reported at Amherst at 9:38 p.m. on Friday night and at Macedonia at 2:13 a.m., so it is unclear when it was in Berea.

Amtrak No. 184, the Phase IV H unit, was trailing in the motive power consist of the westbound Lake Shore Limited at 4:05 a.m.

The Virginia heritage unit must have been a nocturnal visitor leading the 17N. It was reported at Wauseon at 9:48 a.m. on Saturday and the previous report for it had been in Conway late Friday morning.

CSX intermodal train Q009 passes the marker honoring Dave McKay in Berea.

A westbound ethanol train on CSX had a pair of Canadian National locomotives.

Looking like a giant candy cane, the Herzog ballast train slowly makes it way eastward through Berea on Norfolk Southern tracks.

Osborn Yard Hump to Close

March 31, 2017

Hump operations at a third CSX yard are set to close. This time it is Osborn Yard in Louisville, Kentucky.

Earlier this week CSX said it would end hump operations at Stanley Yard in Toledo. Before that the railroad said it would end humping at Tilford Yard in Atlanta.

Flat switching will continue at Osborn Yard, which is a former Louisville & Nashville facility located south of downtown Louisville.

A CSX spokeswoman said the moves are part of an effort to make rail operations more efficient by enabling workers to more quickly process trains.

She said five jobs will be eliminated but Osborn will still have 470 employees.

Osborn is the hub of rail lines from Indianapolis; Evansville, Indiana; Cincinnati; and Nashville, Tennessee.

CSX Closing Stanley Yard Hump in Toledo

March 29, 2017

CSX plans to close the hump at Stanley Yard in Toledo, rearrange the schedules of trains originating there and convert the facility to flat switching.

The changes were to begin this week and be phased in over a period o f weeks.

A CSX spokeswoman told Trains magazine that the move will result in the elimination of 34 jobs. The yard will still have 40 workers once the restructuring is completed.

The laid off employees will be train service and maintenance employees, the Toledo Blade reported. CSX employs 360 workers in the Toledo area.

It will be the second time that CSX has reduced operations at Stanley.

It closed in spring 2004 but within days the railroad had resumed flat switching there and it reopened the hump that July due to freight congestion in neighboring rail yards.

Stanley Yard is a former Toledo & Ohio Central (later part of the New York Central) yard and one of two hump yards on CSX in Toledo.

Walbridge Yard, a former Chesapeake & Ohio facility, but its hump is no longer used.

Instead, Walbridge is used to sort auto rack cars and store unit trains of coal, grain and other bulk commodities that do not require en route sorting.

Stanley is the second CSX hump yard to be closed since E. Hunter Harrison became CEO on March 6.

The railroad also plans to cease hump operations at Tilford Yard in Atlanta.

CSX will have two hump yards left in Ohio at Willard and Queensgate Yard in Cincinnati.

CSX is framing the closing of the Tilford and Stanley hump yards as a cost cutting move that will make the railroad more efficient.

Among the trains that originate at Stanley are Q319 to Indianapolis; Q322 to Flint, Michigan; Q392 to Detroit; Q394 to Cumberland, Maryland (via Willard);  Q507 to Cincinnati; Q509 to Chicago; and Q511 to Louisville, Kentucky

It is not yet clear if these trains will now be handled at Willard or continue to be classified in Stanley by flat switching.

The Blade reported that another recent CSX practice, operating symbol trains every 28 hours, ended shortly after Harrison became head of CSX. The every 28 hours starts resulted in trains operating six days a week rather than seven.

The practice had been implemented more than a year ago. At the time, CSX had also combined the operation of some symbol freights.

Harrison is known for his operating philosophy of precision scheduled railroading, which seeks to reduce if not eliminate the number of times that a train is reclassified en route.