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CSX CEO blames severe service disruptions on resistant company employees

By Randy Gordon, NGFA President

CSX President and Chief Executive Officer E. Hunter Harrison put the onus on recalcitrant company employees who have “push(ed) back” against implementation of his scheduled railroad model for the rapid decline in rail service provided by the carrier.

The NGFA and several of its member companies were among those voicing serious concerns to the federal Surface Transportation Board (STB) about the degradation of service provided by CSX over the past month, which seemingly has gotten progressively worse. The NGFA warned that the service situation could deteriorate precipitously as the fall harvest begins. Service complaints include unpredictable or lengthier transit times, and circuitous and inefficient rail car routing times. Complaints over service declines at CSX prompted the STB last week to issue a strongly worded letter to Harrison expressing concerns about the deteriorating service and the lack of communications from the railway to its customers regarding changes to its operations plan.

One rail analyst firm reported that more than 80 percent of shippers it surveyed had experienced service-related problems with CSX, and nearly 40 percent had switched some freight to rival Norfolk Southern, while 67 percent had transferred freight to truckers when feasible to do so.

In a July 31 email to CSX customers obtained by the NGFA, Harrison wrote, “[t]he pace of change at CSX has been extremely rapid, and while most people at the company have embraced the new plan, unfortunately, a few have pushed back and continue to do so. This resistance to change has resulted in some service disruptions. [Emphasis added.]

“To those customers that have experienced such issues, we sincerely apologize,” Harrison added. “As we move forward, we will continue to address these internal personnel matters and our teams have recommitted themselves to reaching out to those affected to work through any service issues and resolve them as quickly as possible…I will remain engaged in overseeing our customer service and communications efforts….” [Emphasis added.]

Harrison, who was named chief executive officer at CSX this past spring, noted that CSX “has been undergoing a tremendous amount of change, including an operational transformation that will ultimately result in better service to our customers. We’re not at the finish line yet, but I’m personally writing you today to reaffirm our commitment to working with (customers) individually to ensure you receive the support you require to meet your business needs.

“Our operating and sales and marketing teams are collaborating closely to better ensure you are prepared for and work through any planned changes that may occur,” wrote Harrison, who said separately during an earlier second quarter earnings call with investors that there would be “some pain and suffering” during the process.

In its letter to CSX, the STB requested that senior railroad officials engage in weekly calls with the agency’s Rail Customer and Public Assistance Office “to discuss the scope and magnitude of CSX Railroad’s performance issues and its efforts to resolve these problems.”  The STB said that during the calls, CSX should be prepared to “provide an overview of its operations, including congestion at critical yards, gateways, interchange operations and with other Class I railroads, availability of equipment and manpower, local spot-and-pull reports and service to customers with critical needs,” the agency wrote.  The STB also urged CSX to establish a customer service “hotline” and to provide frequent operations updates to customers. “We are very troubled by the apparent lack of communications with customers and urge your immediate attention to remedy this situation,” the STB letter stated.

NGFA Encourages Members to Report Rail Service-Related Problems: As part of its ongoing communications with the STB, member companies are encouraged to notify NGFA about specific rail service problems being encountered with the CSX or other rail carriers. Please email NGFA President Randy Gordon at rgordon@ngfa.org or Senior Vice President and General Counsel Charlie Delacruz at cdelacruz@ngfa.org. The NGFA is aggregating these service reports from members – without identifying the names of specific companies – to give the agency a better picture of the impact on agricultural shippers and receivers. Such communications, as well as the mandatory reporting of service performance metrics by Class I railroads advocated successfully by the NGFA and implemented by the STB, have been extremely useful in encouraging prompt action by the agency and increased attention from Congress.

In addition, the NGFA encourages member companies willing to do so to contact STB’s Office of Rail Customer and Public Assistance directly at 866-254-1798 or by email at rcpa@stb.gov. This office is extremely helpful, and holds all information on a confidential basis unless the shipper or receiver authorizes otherwise. But it does use the information provided to hold rail carriers accountable for their service performance. There also is a form that rail customers can fill out and submit to the STB Office of Rail Customer and Public Assistance, which the office’s staff subsequently follows up on directly with the complainant. 

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