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US rail operator CSX may have recorded a return to growth in its latest results – the first since Hunter Harrison became chief executive – but it seems regulators and shippers are unhappy with his reforms.
In a letter from the Surface Transportation Board (STB) Mr Harrison is pulled up on “an all-round decline in the carrier’s rail freight services” since he stepped aboard.
It notes significantly longer transit times, increasing unpredictability, loaded and empty railcars sitting for days at yards, inconsistent and unreliable switching operations, circuitous and inefficient car routings and a lack of “meaningful assistance” from customer services.
“Shippers have reported that CSX’s customer service deteriorated markedly during the second quarter of 2017, which coincided with CSX’s implementation of significant changes,” the STB wrote.
“We understand that these disruptions have forced a number of rail shippers and their customers to curtail production, temporarily halt operations and/or utilise other transportation options that have added additional expense and inefficiencies to their operations.”
Mr Harrison’s “precision railroading” operating method has been described as little more than sweeping job cuts – under his tenure at Canadian Pacific (CP), the company cut 40% of its workforce.
Some claim this approach threatens safety standards, but this does not seem to have deterred CSX, with the carrier announcing it would cut 2,300 jobs and reduce its fleet by 900 railcars. In an earnings call, Mr Harrison said a further 700 jobs and 100 railcars could be lost.
Speaking to CBS’s Action News Jax, one CSX conductor said the job cuts were also resulting in consolidation of its rail fleet and longer trains, even blocking crossings in some neighbourhoods.
Louis Billingsley, a CSX employee since 2006, said the carrier had begun combining auto-rack trains with freight trains to save manpower, resulting in one train of 2.6 miles in length.
The STB has requested that senior management from operations and service design units, as well as rail customer and public assistance staff, engage in weekly service discussions with the STB.
“CSX should provide an overview of operations, including congestion at critical yards and gateways, interchange operations with other Class I railroads, availability of equipment and manpower, local spot and pull reports and service to customers with critical needs,” said the STB.
The letter says: “In addition, we urge you to establish a service hotline for your customers and provide frequent operations updates to them, both directly and via CSX’s website postings.”
A spokesperson for the railroad told The Loadstar CSX was working with the STB to provide it “with what they need”, but refused to comment further on the complaints.
Analyst Cowen and Co’s Second-Quarter 2017 Rail Shipper Survey, released in July, found 24% of respondents described CSX’s service as “poor”, with no other operator receiving a “poor” rating from more than 6% of those surveyed.