Posts Tagged ‘James Foote’

Union Leaders Skeptical of Foote’s Comments

May 19, 2022

Although labor unions representing CSX appreciate some of the moves the carrier has made in recent months to improve management-employer relations, they are taking with a grain of salt recent comments made by CEO James Foote about his desire to improve the working relationship.

Trains magazine said the labor leaders it interviewed described the relationship with management as the worst it has been in decades. They were speaking about railroads generally and not CSX in particular.

Foote has spoken about the need to improve relations with workers in recent weeks and last week during a speech to the North American Rail Shippers conference he said creating better rapport with workers would be the biggest transformative change the industry could make.

Dennis Pierce, president of the Brotherhood of Locomotive Engineers and Trainmen, said he was “flabbergasted” by Foote’s comments because CSX has not met with the union since January and no contract negotiations are currently scheduled.

“He’s got the tools to fix it and he’s never used them. So we’re not sure what he’s talking about,” Pierce said.

In the eyes of union leaders Foote has been sending mixed messages. During a late April hearing by the U.S. Surface Transportation Board into freight service issues, Foote said the railroad’s crew shortage problems would disappear overnight if it could use one-person crews.

According to the Trains report, labor leaders see massive layoffs and operational changes prompted by the move to the precision scheduled railroading model as a major source of tension.

Other sources of conflict include what labor sees as punitive attendance policies, stalled contract negotiations, and no pay increases since 2019.

Unions see the desire of railroads to have one-person crews as a major reason why contract talks have stalemated.

Railroad industry management has not hidden its desire to reassign most conducts to ground-based roving positions in set territories. Conductors would be responsible for multiple trains within their territories and follow them in trucks or SUVs.

Union leaders acknowledge that CSX has taken some steps toward improving its relations with labor.

It has begun offering attendance bonuses to workers to stay marked up, has softened some discipline policies and boosted pay for new conductors.

Trains quoted industry observer Todd Tranausky as saying labor relations in the railroad industry are strained.

“But there is always tension between labor and management in any industry when large changes driven by automation are on the horizon, so it should not come as a surprise,” said Tranausky, vice president of rail and intermodal at freight forecasting firm FTR Transportation Intelligence.

The article can be read at

Foote Calls for New View of Workplace Culture

May 16, 2022

CSX CEO James Foote wants the railroad industry to rethink its relationship with its workers.

Speaking to the National Rail Shippers Conference last week, Foote said railroads need to discard the adversarial stance they often take with their workers and instead negotiate with them

“Lesson learned,” he said in reference to the difficulties CSX has been having hiring new workers. “People don’t want to work in the railroad business any more. People don’t like to work weekends. People don’t like to work nights. People like to go to their kids’ birthdays. People like to be home for Christmas.”

As Foote spoke about 40 union railroad workers picketed outside.

“We need to fundamentally review and understand the jobs that we offer to our employees,” Foote said.

“And I’ll tell you, it isn’t just about money. There’s been a mindset and a change in the world about what people want from the people they work for, and we need to change. And I’m talking about, primarily, that we need to change for the 85 percent of people who work for me that are in the union.”

Foote attributed the adversarial relationship railroads have with their employees in part to such federal laws as the Railway Labor Act and Federal Employers Liability Act.

Calling changing workplace relationships the biggest transformative change that CSX can make, Foote said his company needs to build better rapport with its workers.

“You sit down with your employees, you negotiate, and you come up with an agreement that’s beneficial to your company, and beneficial to your employees. It’s as simple as that,” Foote said. “That’s what every other business in the world does, and we need to put our big-boy pants on and get back into the negotiating arena.”

One complication to this is the fact that railroads negotiate with unions on an industry-wide basis. Foote suggested CSX might withdraw from those talks and work out contracts with unions on its own.

The nation’s railroads and it unions are in the third year of talks for a new contract.

However, he also suggested that the entire negotiating process needs to be examined as well.

In the meantime, Foote said CSX is unlikely to reach pre-COVID-19 pandemic levels of staffing until the third quarter of this year.

Before the pandemic, CSX had 7,100 train and engine employees. Like other Class 1 railroads, CSX has blamed freight service issues that were the subject of a recent U.S. Surface Transportation Board hearing on crew shortages.

Vaccine Mandate Has Foote Worried

November 12, 2021

In a speech on Thursday to the Bernstein 2021 Global Industrial Conference, CSX CEO James Foote expressed concern about how a federal mandate requiring workers to be vaccinated against COVID-19 will affect operations.

However, as reported by Trains magazine, Foote said the Class 1 carrier plans to comply with a Jan. 4 deadline to require vaccinations although a company spokeswoman said no decision has been made on whether to require unionized workers to receive the vaccine.

CSX is offering financial incentives for workers to receive vaccinations.

Foote said requiring workers to be vaccinated could adversely affect CSX’s efforts to hire and retain operating personnel.

Already, Foote said, crew shortages have restricted how much freight CSX can handle as well as hindered its efforts to provide reliable service.

Foote Responds to Service Complaints Assertion

November 11, 2021

In a letter to the U.S. Surface Transportation Board, CSX CEO James Foote sought to refute assertions that the Class 1 carrier is having service issues.

Foote said there has not been a surge in shipper complaints and that the carrier has increased the number of staff in customer service office by 40 percent.

He was responding in part to a letter written by STB Chairman Martin J. Oberman last month seeking information about such service issues as missed switches, delayed shipments and unfulfilled car orders.

Oberman said in the letter that regulators have been receiving a steady stream of complaints about CSX service.

Foote countered that if those informal complaints are coming into regulators that CSX wants to hear about them because the company cannot address issues it doesn’t know exist.

He also contended that although CSX service is not where it should be, that the carrier moving toward returning to 2019 performance levels as it continue to hire new operating personnel and such metrics as terminal dwell time, average train speed and the number or cars sitting for more than 48 hours without moving are among the best in the industry.

Foote’s letter has been posted at

CSX Revenue up 24% in Third Quarter

October 21, 2021

CSX said Wednesday that during the third quarter of 2021 it had revenue of $3.29 billion, an increase of 24 percent compared with the same period in 2020.

The railroad said it posted a third quarter increase of 3 percent in volume. Coal traffic increased 16 percent while intermodal was up 4 percent.

Merchandise traffic fell 2 percent, which CSX officials attributed largely to a 26 percent plunge in automotive traffic.

Auto production in North America has slowed in recent months due to computer chip shortages.

CSX said net earnings for the quarter were $928 million (or $0.43 per share), a gain of 32 percent compared with the same quarter in 2020 ($736 million or $0.32 per share).

Operating income rose 26 percent to $1.44 billion. The operating ratio was 56.4 percent compared with 56.9 percent in 2020. 

“We are committed to helping our customers overcome current supply chain constraints and will continue to take action in order to keep our network fluid and design new solutions that enable the delivery of critical goods to millions of Americans,” CSX CEO James M. Foote said during an earnings announcement.

Officials said CSX is increasing overflow capacity at 13 container yards including in Cleveland, Cincinnati, Detroit, Indianapolis and Louisville. The program is designed to create additional storage and capacity.

They said this would free truck capacity and reduce port terminal congestion.

Since July, CSX said it has increasing hiring of train and engine operating personnel by 300 percent.

The carrier has created incentive programs to increase existing employee availability and hired additional workers at intermodal terminals to maintain fluidity.

During the earnings announcement, CSX said it expects double-digit revenue growth and plans to spend on capital programs between $1.7 billion to $1.8 billion.

More information is available at

CSX Willing to Give up PAS Ownership

September 11, 2021

CSX CEO James Foote said during a conference this week that his company is open to giving up its half ownership of Pan Am Southern if it is allowed to acquire Pan Am Railways.

PAS ownership is currently split between Norfolk Southern and Pan Am. PAS provides NS with access to Boston.

CSX has proposed keeping its PAS ownership but giving operating control of it to a neutral party, a subsidiary of short line railroad conglomerate Genesee & Wyoming.

However, some critics of the CSX-Pan Am deal have argued that the G&W subsidiary – Berkshire & Eastern – is not necessarily a neutral party.

Speaking to the North American Rail Shippers conference on Thursday, Foote said, “It was our partner in that initiative that thought we should do it this way.”

PAS oversees the former Boston & Maine west of Ayer, Massachusetts, and a north-south route along the Connecticut River in Vermont, Massachusetts, and Connecticut.

Among those opposing CSX plans for PAS are the U.S. Justice Department, Canadian Pacific, and Vermont public officials.

All have said the manner in which CSX has proposed to handle PAS raises competitive concerns, saying CSX is already the dominant freight railroads in New England.

Foote said he is baffled by why CP wants to route its New England traffic through the Hoosac Tunnel, which cannot accommodate double-stack intermodal traffic.

 “We’ve got a super deluxe double-stack railroad, but they don’t like it for some reason,” Foote said about his company’s Boston & Albany route.

Inside CSX’s Hiring Difficulties

August 7, 2021

During an earnings call with investors last month to discuss second quarter financial results, CSX CEO James Foote talked about the difficulty his company was having hiring new workers.

CSX set out early this year to hire 500 new conductors and have them on the job by July.

But it fell well short of that goal, hiring only about 200 conductors. It continues to seek new conductors and has posted help wanted signs at 48 locations.

To hear Foote tell it, the railroad’s difficulties in hiring are not unlike the problems that other employers are having.

“It is an enormous challenge for us to go out and to find people that want to be conductors on the railroad, just like it’s hard to find people who want to be baristas or anything else,” Foote said. “It’s very, very difficult.”

Of course conductors at CSX or, for that matter, every other Class 1 railroad are paid far more in salaries and benefits than the typical restaurant or coffee shop worker.

But Foote said good pay isn’t enough to attract and keep workers.

CSX is not necessarily alone in having hiring troubles among Class 1 railroads, but an analysis published on the website of Trains magazine suggested that it is in a class by itself compared with its peers in having difficulties attracting workers.

Trains reported that Norfolk Southern is seeking new conductors at 30 locations to fill vacancies caused by attrition.

“We are facing some spot labor shortages, but they’re just that,” said NS CEO James Squires during his company’s second quarter earnings call.

To attract new hires, NS has upped its training wage and offered signing and retention bonuses to some new employees.

BNSF is not seeking to hire conductors; Union Pacific is hiring conductors at five locations;

Canadian National is hiring conductors at 30 locations, and Canadian Pacific is hiring conductors at 19 locations.

Both Canadian Class 1s have offered signing bonuses at a few terminals. Kansas City Southern, is hiring conductors at seven terminals.

Now you might be wondering how CSX could be having difficulties filling jobs when in recent years it has furloughed large numbers of train and engine crews.

CSX has recalled furloughed workers but to its dismay fewer of them returned to work than it expected.

Some furloughed CSX workers opted to take jobs in the construction industry where they also enjoy good pay and benefits with the added bonus of being able to sleep in their own bed every night.

The latter point underscores something Foote said last month about how the nature of the job is hindering hiring and retention.

Foote said many people don’t want to work nights, weekends, holidays, and outside in all kinds of weather. “People before liked that,” he said. “They don’t want to do that anymore.”

Nick Little, managing director of the Railway Management Program at the Eli Broad College of Business at Michigan State University, told Trains that he has seen the same dynamic play out in the trucking industry, which has a persistent shortage of drivers.

Like railroading, trucking involves being on the road a lot and away from home a lot.

Little suggested that anecdotal evidence indicates there is something about the work culture at CSX that is resulting in fewer furloughed workers wanting to return and some workers wanting to leave their jobs.

Many workers disliked the changes that came with the move to the precision scheduled railroading operating model.

“Feeling uninspired can make people leave,” Little said. “They want to feel valued. I’m not sure CSX does that as well as some of the other railroads do.”

Little cited a conversation he had with a CSX locomotive engineer who retired as soon as he could.

“He didn’t like the management relationship and he felt that he’d had enough. They [workers] were being asked to do more for less all the time.”

The latter point is not something exclusive to CSX or even the railroad industry.

In an era in which cost cutting is akin to a religion in corporate America, workers in a wide range of fields face expectations of doing more with less as companies reduce their payroll numbers through layoffs and attrition, a process they euphemistically refer to as “right sizing.”

Statistics released by the U.S. Surface Transportation Board show CSX had 1,129 fewer train and engine employees in the second quarter of 2021 compared with the second quarter of 2019.

During the same period, overall traffic levels were similar, with second-quarter 2019 volume 0.63 percent higher than this year.

What has changed is the mix of traffic with coal down 19 percent and crude oil volume also down significantly. That somewhat reduces the need for train crews.

CSX through June was operating with about 109 crews per million train-miles (train-miles annualized).

That places it as the second lowest in the industry but since the beginning of 2019 it has averaged 108 crews per million train-miles.

Little also thinks CSX has a tougher time than its peers because many of its terminals are located in areas where it traditionally have been harder to find workers.

“I think CSX would always have a tougher job — marginally tougher than NS but certainly a lot tougher than UP or BNSF — to retain its people and then to get new employees that will stay with them,” he said.

Matching a labor force with the ability to meet market demand has always been a challenge for railroads because of the nature of the industry.

Rick Patterson, is an industry analyst at Loop Capital Markets, once worked as a railroader. He said matching employment levels with market demand has long been a problem in the railroad industry.

“Crews are too expensive to have sitting around,” he said. “So it’s quick to furlough, then being perennially surprised when the economy turns out to be stronger than expected, and a bunch of the furloughs either don’t pick up the phone or have gone off to work for McDonald’s. Railroads have been making this mistake for a century and will continue to do so.”

Peter Swan, am associate professor of logistics and operations management at Penn State Harrisburg, told Trains that railroads have no incentive to invest in excess capacity to better handle growth or disruptions.

“The problem for shippers and the country as a whole is that railroad assets take a long time to develop,” he said. “Crews take time to hire and train. Locomotives take time to manufacture. Upturns in business are often unfortunate events for railroads.”

Figures released by CSX and contained in reports to the U.S. Surface Transportation Board show the consequences of not having enough workers.

Trip plan compliance in the second quarter at CSX was 69 percent for carload traffic. That is up slightly from the 67 percent of the first quarter but well below the mid-80 percent level CSX had in 2019.

That led Patterson to conclude that where CSX is having difficulty with crews is in local service.

“If local crew shortages are indeed the problem I’d expect to see trip plan compliance weak relative to overall service metrics, and a large gap between intermodal and carload trip plan compliance, given the former doesn’t have local service,” Paterson says. “Arguably, both have occurred.

Foote said last month that his company needs to figure out a way to make jobs more attractive. Although he didn’t specify how that could be done, one idea has already surfaced in the industry.

Class 1 railroads are seeking to get their unions to agree to one-person crews for most trains.

Rather than ride in the locomotive cab, the conductor would be assigned a geographic territory and supervise train operations in that territory from the ground.

The advantage is that conductors would be home every night and the job would become more set shift oriented rather than being subject to being called to work at all hours of the day.

Yet railroads operate 24/7/365 so that means shifts would still be assigned during times when many workers want to be off the clock rather than on it for an employer.

And railroad work will always be outdoor-oriented and subject to varying weather conditions from extreme heat to extreme cold.

In the meantime, though, CSX continues to seek new conductors and trying to maximize its existing work force.

It reached an agreement with the SMART-TD union to increase the availability of conductors by offering them a weekly bonus for perfect attendance. The bonus is, reportedly CSX stock or cash, the latter said by unofficial sources to be $500.

Still, the effect of crew shortages will be around a while. Noting that it takes six to nine months to find, hire, train, and place a conductor,” Paterson said the low hiring numbers of the second quarter will continue to show up in fourth quarter figures when crew attrition potentially exceeds new conductor placements in the field.

“So CSX may be running OK today  . . . but management is worried about tomorrow,” Patterson said.

CSX Struggling to Hire New Conductors

July 22, 2021

The second quarter financial picture for CSX had many positives but also one large negative.

On one hand the railroad’s traffic volume an earnings have recovered nicely from the downturn introduced last year by the COVID-19 pandemic.

Taking into account adjustments for the effects of one-time items, operating income grew 62 percent, while revenue jumped 33 percent, to $3 billion.

Earnings per share were up 82 percent, to 40 cents. The adjusted operating ratio fell to 55.1 percent compared with 63.3 percent a year ago in the second quarter of 2020.

As for traffic volume, it grew in every category, although that comes with an asterisk because the comparisons are with a period of 2020 when rail traffic fell due to the pandemic.

Nonetheless, CSX set a record for intermodal volume and merchandise traffic rose by 21 percent. Even coal traffic showed a 44 percent increase.

Yet hanging over all of this is a challenge that CEO James Foote said won’t be easily resolved.

CSX won’t be able to reach pre-pandemic levels with its merchandise traffic until it hires more train and engine crews to handle strong volume growth.

Foote said the labor market is tight and the railroad has struggled to hire conductors.

“It is an enormous challenge for us to go out and to find people that want to be conductors on the railroad, just like it’s hard to find people who want to be baristas or anything else,” he said during an earnings call. “It’s very, very difficult.”

Last January CSX projected having 500 new conductors on the job by mid summer. Instead it has hired just 200 new conductors and crew attrition has been higher than expected in the first half of the year.

CSX management also acknowledged during the earnings call that its earnings received a boost from from the $349 million gain on the sale of property rights in Virginia for new passenger operations.

Also hindering rail operations were declines in operating metrics, which CSX executives said reflects significantly higher volume than a year ago and crew shortages.

Train velocity in the second quarter fell 16 percent while dwell time was up 18 percent.

On-time train originations slipped by 11 percent to 78 percent, while on-time arrivals fell 20 by percent to 67 percent.

Carload trip-plan compliance declined  to 69 percent from 81 percent a year ago, while intermodal trip-plan compliance was 89 percent, down from 94 percent a year ago.

Although intermodal performance is improving, carload service lags. “On the carload side the reliability isn’t where we need it to be,” said Jamie Boychuk, executive vice president of operations.

Foote said getting merchandise service back to an 85 percent on-time performance by the end of the year will be tough unless the hiring situation changes dramatically.

In the meantime, CSX has reached a new conductor availability agreement with the SMART-TD union that has increased the availability of conductors.

It also is offering incentives to current employees to refer applicants to the railroad.

Boychuk said those in railroad families understand job its lifestyle.

That includes working nights, weekends and holidays in all kinds of weather. Foote said many would-be railroaders don’t want to do those things.

He said those incentives have increased the application pool from a few hundred to more than 1,000.

CSX management is still seeking to figure out how to make train operating jobs more attractive but said, “throwing money at people these days is not the answer.”

Other changes at CSX during the quarter included a 39 percent increase in the use of distributed power.

Autonomous track inspection miles rose by 27 percent and the use of drones to inspect the infrastructure increased by 80 percent.

The personal injury frequency index improved 13 percent, while the train accident rate improved 34 percent to a new record low for the second quarter.

CSX distributed 9,000 tablets to employees to help them share information in real time.

Fertilizer Shippers Want More STB Oversight of CSX

June 8, 2021

Fertilizer shippers told the U.S. Surface Transportation Board recently that a shortage of train crews at CSX has led to widespread service problems.

The Fertilizer Institute asked the STB to conduct enhanced oversight of the carrier, which the trade group acknowledged was trying to fix its network.

The letter from the group said the service problems have been ongoing for several months and are hindering the fertilizer industry’s ability to serve its farmer customers.

“In the aftermath of widespread implementation of precision scheduled railroading, it may be that the rail industry is trying to do too much with too little,” the group wrote. “CSX — like other Class I carriers — has reduced its operating costs through a series of measures, including reductions in staff, such as train crews. We have all had some surprises in the past year, but a rebound of shipping volumes should not be one of them.”

CSX has acknowledged having crew shortages and one consequence is that it has been unable to put stored locomotives back in revenue service.

Transit times have lengthened to two to four days longer than usual. The crew shortages have also led to local service in some areas being reduced to once a week from five days per week, and delays to the movements of unit trains.

CSX CEO James Foote in a speech to investors last week said the railroad is seeking to hire and train new crew members as part of its efforts to improve service.

However, he said that all transportation modes are facing more demand than “there is transportation product supply. It’s as simple as that.

“The transportation product is struggling in our case for one reason and one reason only: We’ve been trying to hire since the beginning of the year.”

Foote said CSX in the past year has lost through attrition 7 percent of its train and engine crews and was unable to hire at the height of the COVID-19 pandemic.

Social distancing requirements hindered the railroad’s ability to hold training classes for new conductors.

Foote said it takes time to train conductors and CSX won’t cut safety corners to rush new hires to work.

“None of us are happy with the decline in velocity and dwell. We worked really, really hard to get this railroad to be running as well as it was, and we’re going to get this railroad running back not to where it was but even better,” Foote said.

Foote said CSX has plenty of track capacity and can put into service hundreds of locomotives now in storage to meet expected traffic increases.

At the same time, he said CSX is being cautious not to hire too many new employees, which Foote said could cause the carrier to misses a quarter’s financial targets.

“If you want to have a long-term reputation in the marketplace as a quality service provider, you better be there for people when they need you,” Foote said.

Foote Confident Pan Am Sale Will be OKed

June 4, 2021

CSX CEO James Foote expressed optimism this week that his company’s plan to acquire New England regional Pan Am Railways will be successful.

The U.S. Surface Transportation Board has twice complicated spurned CSX’s efforts to buy Pan Am, most recently saying its merger application was incomplete.

“We’re just in the early stages of seeking authority to complete the transaction from the Surface Transportation Board,” Foote said in addressing the Bernstein Strategic Decisions Conference.

“And I’m confident just because of the positive nature of it. Clearly it improves the overall rail transportation network, especially in the New England region.”

CSX announced last November its plans to acquire Pan Am. The STB in March ruled the transaction was a significant one that would thus receive a more comprehensive regulatory review.

The two carriers had sought to have the merger treated as a minor transaction that would have received less stringent review.

CSX said it is pulling tougher more information to share with the STB, including a full analysis of how the deal will affect railroad competition and rail-truck competition in New England.

A decision by the STB on the merger is not expected until sometime in 2022.

Foote says he doesn’t believe the proposed Canadian National-Kansas City Southern merger will trigger a round of Class I railroad mergers.

“You can make a case that consolidation might be good,” Foote said.

He pointed out that in 1980 there were 61 Class 1 railroads, some of which were not in good financial condition.

“They were a basket case, their service was horrible, there was no capital investment,” Foote said. “And over the years the railroads consolidated into what they are today and the core infrastructure of the rail industry now is significantly better than it was. And, No. 1 and most importantly, the seamless nature and the single line service provided today is much better than it was.”