Posts Tagged ‘CSX’

Loose Bolt in Marion

July 20, 2018

Earlier this year I was in Marion when I noticed a loose bolt in one of the diamonds at the intersection of the Sandusky District of Norfolk Southern with the Mt. Victory Subdivision of CSX.

The top photo shows the loose bolt. The second image shows an eastbound CSX auto rack train passing over the diamonds and making enough vibration to rattle the bolt out of its position.

Later that afternoon, an NS maintenance of way crews stopped by to put in a new bolt and do other repairs to the diamond (third image)

The bottom image shows the new bolt in place and the old bolt discarded along the tracks.

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Ohio Company Completes Loop Track

July 20, 2018

An Ohio company has completed a rail loop construction project at its facility in Hannibal.

Long Ridge Energy Terminal is the first in the Appalachian Basin to offer unit-train and barge transloading capabilities to its terminal, which is served by CSX.

In a news release, Long Ridge said the project was completed in response to the rapid increase in demand for frac sand and natural gas liquids associated with the Marcellus and Utica shales in Eastern Ohio and the West Virginia panhandle.

Long Ridge said it has put into service a rail unloading pit, a frac-sand conveyor belt system and frac-sand silos with total storage capacity of 23,000 tons. The company plans to commission a second barge dock in August.

CSX Still Reworking Intermodal Strategy

July 19, 2018

Containers on a CSX westbound stack train cross the Grand River in Painesville on a winter day.

CSX continues to tinker with its intermodal strategy, which CEO James Foote said needs a lot of work.

Speaking during the second quarter earnings call this week, Foote said intermodal operations needs to become more efficient.

Foote also used the word “dysfunctional” to describe intermodal operations at the railroad.

“We’re just really beginning to get in there and start to figure out how to rationalize that big part of our business,” Foote said.

He hinted that CSX will make changes to train design and terminal operations that might result in consolidation of some terminals.

However, Foote expects management to take its time in redesigning the intermodal strategy.

“We’re not going to do anything that’s going to screw up the railroad,” he said. “So if it takes a little longer than a quarter or two, I’m fine with that.”

CSX overhauled its intermodal strategy last fall by dumping 7 percent of its intermodal volume, most of which was service between low-volume intermodal terminals.

Some intermodal traffic was added into the merchandise network.

A hub-and-spoke strategy implemented during the administration of CEO Michael Ward also was ditched.

The focal point of the hub-and-spoke operations was the Northwest Ohio Intermodal Terminal in North Baltimore, Ohio, which handled more than a quarter of all CSX intermodal shipments.

“At that point in time, it was my belief that a large part of that rationalization of intermodal had been accomplished,” Foote says. “Well, that’s not the case.”
Foote noted he has overseen a revamping of intermodal strategy during his days as chief marketing officer at Canadian National.

“Intermodal at CN was a basket case,” Foote says. “When we were done fixing it over a couple-year period, the average profitability of our intermodal business there was better than the corporate average.”

However, CSX intermodal traffic tends to have shorter hauls than those of CN.

Foote noted that now is a good time for railroads to seek new intermodal business due to truck capacity being tight and truck rates reaching record levels.

“People are looking for capacity,” Foote says. “We want to be able to provide that service and capacity to our customers.”

CSX Sets Operating Ratio Record in 2nd Quarter

July 19, 2018

CSX announced on Wednesday that during the second quarter of 2018 it set a record for its lowest quarterly operating ratio and said that along with gains in profits and revenues are evidence that its scheduled railroading operations model has begun to pay off.

Net earnings were $877 million, or $1.01 per share, compared with $510 million, or 55 cents per share for the second quarter of 2017.

The operating ratio fell to 58.6 percent, which was a drop of 4.9 points compared to the operating ratio of the same quarter of 2018.

In a news release, CSX said the operating ratio announced this week is adjusted for the impact of one-time restructuring costs.

In a statement, CSX CEO Jim Foote called the operating ratio “clearly the lowest ever for CSX and, I believe, the lowest ever by a U.S. railroad.”

Revenue increased 6 percent, to $3.1 billion for the quarter.

Earnings per share rose 84 percent, to $1.01, topping Wall Street estimates of 87 cents per share.

Analysts credited the improved showing to the effects of tax reform and share buybacks.

“Two words sum up everything: Great performance,” Foote said during an earnings call with investors and Wall Street analysts.

Freight traffic on CSX rose 2 percent for the quarter, led by a 7 percent rise in coal shipments. However, CSX said utility coal was down due to competition from natural gas.

CSX officials expect a strong export coal market to continue for metallurgical and thermal coal.

A boost in international intermodal traffic enabled CSX to post a 2 percent in total intermodal traffic which came despite losses in domestic intermodal volume.

CSX executives project that revenue will increase by mid single-digits compared with their previous forecast of being up slightly.

Foote said the change in outlook came because of expectations for continued strong export coal shipments, higher fuel prices, and a healthy U.S. economy.

Chief Financial Officer Frank Lonegro said that CSX handled more freight with 9 percent fewer crew starts and 13 percent fewer locomotives.

The smaller locomotive and car fleet size meant that the railroad was able to cut its shop craft workforce by 18 percent compared with a year ago.

Overall, CSX’s costs fell during the second quarter by 8 percent with labor expenses dropping by 10 percent.

The improved operating ratio was helped by service improvements that saw train velocity up 7 percent, dwell time down 11 percent and train length up 13 percent on a year over year basis.

By commodity, CSX logged year-over-year second-quarter revenue increases in chemicals (up 7 percent), automotive (7 percent), agriculture and food products (up 2 percent), minerals (up 7 percent), forest products (up 11 percent), and metals and equipment (up 11 percent).

Fertilizer revenue declined 5 percent on an 18 percent drop in volume compared with the same quarter in 2017.

Year over year, coal revenue and volume each rose 7 percent, while intermodal revenue rose 9 percent on a 2 percent increase in volume.

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.

Buyers Wants More Time From STB to Complete Deal With CSX to Buy Northeast Ohio Branch Line

July 13, 2018

The would-be buyer of an idle CSX branch line in Northeast Ohio is seeking additional time from the U.S. Surface Transportation Board to complete the transaction.

BDM Warren Steel Holdings is seeking to purchase the 13.9-mile Newton Falls Subdivision, which CSX wants to abandon.

In asking for additional time, Warren Steel said it received “confusing information” about the June 29 deadline that the STB set for offers of financial assistance.

Warren Steel had offered $742,000 for the branch, which it said will be used for future economic development of a 1,100 acre site of a former steel plant that has since been razed.

There are several brownfield and greenfield sites along the branch that could be re-purposed into distribution warehouses, food processing, manufacturing, and suppliers supporting gas production in nearby shale fields.

In its letter to the STB, Warren Steel said it has received 42 inquiries including 11 that would require rail access.

Warren Steel is expected to contract with a short-line railroad to operate the branch.

The branch would offer connections with CSX in Newton Falls and Norfolk Southern near Niles.

“Without dual service, we will lose some opportunities,” said Sarah Boyarko, senior vice president for economic development with the Youngstown/Warren Regional Chamber.

CSX asked the STB in May for approval to abandon the line, which was once owned by the Baltimore & Ohio.

Class 1s to Report Stellar 2nd Quarter Results

July 13, 2018

Wall Street analysts are expecting North America’s Class 1 railroads to report sterling financial results for the second quarter of this year because traffic has continued to rise and the railroads have also imposed rate increases.

A review of analysts’ projections that was undertaken by Trains magazine found that the Wall Street mavens are expecting earnings per share to rise by an average of 23 percent for all roads except Canadian National.

The rate increases have been made possible in part because of limited capacity in the trucking industry.

However, some analysts believe that railroad service issues have prevented them from reaping traffic growth opportunities, particularly in intermodal traffic.

The railroads have seen their intermodal traffic grow by around 5 to 6 percent and reach record-setting levels, but it could have been higher.

The demand by online retailers, such as Amazon, for brown paper and cardboard boxes has pulp and paper mills operating at high capacity yet they are relying on trucks and not rail to ship that commodity.

Pulp and paper traffic by rail is flat compared to last year and well below the five-year average.

Analysts are likely to be asking questions in coming weeks about how a trade war that is underway with the imposition of tariffs in a tit for tat fashion will affect the financial performance of railroads down the line.

The Association of American Railroads has noted that 42 percent of rail traffic and 35 percent of railroad revenue is linked to trade.

With the trucking industry operating at 100 percent, there remain opportunities for railroads to gain market share in freight volume.

CSX will report its second quarter results on July 17 while Norfolk Southern will issue its report on July 25.

Joy Ride on CSX Ends in Arrests 60 Miles Later

July 12, 2018

CSX gave two Ohio men a 60-mile ride on Tuesday that ended with their arrest for trespassing.

Police said Christian Hale, 20, and Keven Slone, 24, both of Willard, got onto a moving CSX train in Willard at about 4 a.m. Tuesday and rode it for several miles before Hale called 911 for help.

The pair had thought the train would stop in Willard but it kept going. They clung to the outside of two rail cars as the eastbound train reached speeds of 45 to 50 miles per hour.

As the train neared Doylestown on the New Castle Subdivision, Hale called 911 and told a police dispatcher what was happening.

“I’m on a train!” he said.

“You’re on a train?” the dispatcher responded.

“Yeah, and it’s going really fast and I don’t know where it’s going. It’s scaring the s*** out of us.”

The police dispatcher notified CSX and the train stopped at Whitman Road in Chippewa Township.

Hale and Christian took off but were found a mile away. The pair were charged with trespassing and may face additional charges being lodged by CSX police.

When asked why he had gotten on the train, Hale replied, “It’s better than walking.”

Wayne County Captain Doug Hunter said getting a 911 call from someone hanging onto the side of train is very unusual

Hale told a deputy he only planed to ride the train through Willard.

“I thought it was going to stop in Willard and it didn’t, and I should have never got on the train,” Hale said. “I know it was a stupid idea and I never should have did it. I wasn’t going to and I never will again.”

CSX Appoints 2 Top Managers

July 10, 2018

CSX has named two new executives whose appointments are effective immediately.

They include Mark Wallace, executive vice president sales and marketing, and Diana Sorfleet, executive vice president and chief administrative officer.

Wallace joined CSX in March 2017 as executive VP corporate affairs and chief of staff, and was named executive VP and CAO in January.

He previously worked with the late E. Hunter Harrison for 20 years and began his railroad career at Canadian National in 1995 as an analyst in the taxation and treasury function to assist on CN’s initial public offering.

Wallace also worked at Canadian Pacific between July 2012 and January 2017.

Currently serving as CSX’s chief human resources officer, Sorfleet will succeed Wallace. She will be responsible for information technology, human resources, labor relations, executive compensation and aviation.

She joined CSX in June 2011 after serving in human resources at Exelon, most recently as VP of diversity and development.

CSX also announced that Kevin Boone, who previously reported to Wallace, will continue as executive VP corporate affairs. He will become responsible for corporate communications and report to CEO James Foote.

WATCO Buying CSX Lines in Indiana, Illinois

July 9, 2018

Two CSX secondary routes in Indiana and Illinois are being acquired by Watco Companies.

The 126.7 miles of track involved in the transaction includes the Decatur and Danville Secondary subdivisions.

The routes are former Baltimore & Ohio and New York Central respectively.

Watco plans to name the property the Decatur & Eastern Illinois Railroad will be the new name for the 126.7 miles of track that Watco will acquire from CSX as the Class I railroad seeks to prune its network of lower-density, non-core routes.

The Decatur Subdivision extends from its namesake city in Illinois to Montezuma, Indiana. It once extended between Indianapolis and Springfield, Illinois.

The Danville Secondary runs from Terre Haute, Indiana, and Olivet, Illinois, and also includes the Paris Industrial Track in Paris, Illinois.

The track between Terre Haute and Paris once was part of the NYC’s Indianapolis-St. Louis mainline and hosted such crack passenger trains as the Southwestern Limited, Knickerbocker and Missourian.

The track north of Paris was a Central route that linked Northwest Indiana and Cairo, Illinois.

Watco has told the CSX union members who work on the affected lines that it will have employment opportunities in Decatur and Paris.

The Pittsburg, Kansas-based short line company is looking to hire four conductors, five engineers, a locomotive laborer, a track inspector, two track laborers and two track foremen.

CSX, which put the lines up for sale last January, expects the sale to close in early August.

Affected CSX employees who choose not to go to work for Watco, retire or resign, will be given the option of remaining with CSX.

Neither CSX or Watco disclosed the terms of the proposed sale.

Watco operates 38 short-line railroads in the United States with 5,100 miles of track. It also holds 31 industrial contract switching contracts.