CSX boss target of scolding from Surface Transportation Board in Washington

Letter comes in the midst of a potential second round of layoffs.

JACKSONVILLE, Fla. - Its bottom-line numbers have been good recently, but the government is warning Jacksonville-based rail giant CSX that it’s on the wrong track.

A letter from the Surface Transportation Board in Washington directly to CEO E. Hunter Harrison brings up numerous complaints from CSX customers. In it, the STB cites markedly deteriorating service during the second quarter of 2017, a timeframe in which CSX recently boasted profits exceeding 2Q16 by nearly 15 percent.

“In particular,” the letter reads in part, “shippers have complained that transit times have increased significantly and/or become unpredictable…”

This letter comes days after an announcement of a potential 700 more layoffs at the company, following a 1,000 person workforce reduction in the spring.

STORY: CSX planning up to 700 additional layoffs

The scolding cites railcars sitting idle for days at railyards, unreliable switching operations, and inefficient routes, among other things. It also specifically notes congestion in gateway hubs New Orleans and St. Louis.

“I thought we had a hell of a quarter,” Harrison said during CSX’s July 18th earnings conference.

The less sanguine review from Washington comes less than four months into Harrison’s tenure as CEO after he left a similar position at Canadian Pacific Railway. CSX has been trimming costs by reducing headcount – a work in progress that at times has hinted toward trimming 3,000 positions in all – as well as its locomotive fleet by roughly 900 and railcars by tens of thousands.

“On the operating side, do we have a few gaps?, yes,” Harrison said in the July 18th meeting. “Is that being addressed?, yes,” he continued.

The government isn’t taking that prognosis for granted, though.

“We understand that these disruptions have forced a number of rail shippers and their customers to curtail production, temporarily halt operations, and/or utilize other transportation options that have added additional expense and inefficiencies to their operations,” the STB letter includes.

It also demands that the rail freight company participate in weekly service calls with the Board’s Rail Customer and Public Assistance staff, to assess and remedy CSX’s performance issues.

CSX responded via email to a request for comment from First Coast News on Friday, “With regard to the STB’s letter, CSX will work with the Surface Transportation Board to provide the information requested.”

The company also said it is considering a request from First Coast News for a direct interview with E. Hunter Harrison.

Harrison hinted strongly during the quarterly earnings meeting that his tenure with CSX will be brief.

As of mid-day trading on NASDAQ Friday, CSX stock was down almost ten percent from an all-time on July 13. During the same time, the NASDAQ index had increased about one percent.

© 2017 WTLV-TV


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