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.
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.