Eyes on the prize: CSX toils to complete two ambitious projects, restore fluidity to get back on the growth track

By Jeff Stagl, Managing Editor

CSX predecessor the Baltimore and Ohio Railroad Co. (B&O) opened the Howard Street Tunnel in downtown Baltimore in 1895. It took four-and-a-half years, 2,400 workers and $7 million (more than $200 million in today’s dollars) to construct the 1.4-mile-long structure, which at the time was the longest tunnel on the B&O’s system.

In an article that appeared in the Baltimore Sun on Jan. 29, 1895, B&O Chief Engineer William T. Manning described the tunnel as “the greatest piece of engineering in this country, if not in the world.”

“Difficulties were encountered ... that will never perhaps be met with again in a similar work,” he said.

Fast forward 130 years, and CSX is carrying out a major transformation of the tunnel that also could be considered somewhat of an engineering marvel. The Class I closed the tunnel on Feb. 1 — the first time the structure has been completely shut off from traffic since it opened — to carry out a more than $500 million project. The work calls for tailoring the 8,700-foot-long structure to accommodate double-stack trains.

“It was an engineering feat when it was first built, and it’s an engineering challenge now to expand it,” says CSX Director of State Relations Brian Hammock.

The tunnel reconstruction is the culmination of many years of planning by a public-private partnership involving CSX, the Port of Baltimore, U.S. Department of Transportation, state of Maryland, commonwealth of Pennsylvania and other stakeholders. 

CSX

Yet, while the B&O had faced difficulties during tunnel construction more than a century ago, CSX now is encountering a host of challenges that transcend the tunnel undertaking. Various trials and tribulations over the past several months have converged to reach critical mass when it comes to adversity.

Simultaneous with the tunnel work, CSX is trying to complete extensive infrastructure repairs in its Blue Ridge Subdivision in North Carolina after Hurricane Helene caused a lot of damage to track and bridges there in October 2024. On top of that, the weather hasn’t been kind to the railroad’s network post-hurricane.

Two winter storms struck in January, hobbling parts of the network. Then, in February, heavy rain, flash flooding and damaging winds occurred in parts of the South. A little more than a month later, severe weather — including flash floods and tornadoes — in early April damaged or impeded portions of CSX’s infrastructure, particularly in Kentucky and Tennessee.

Ultimately, CSX’s two westernmost routes were severely impacted. As a result of all the tumult as well as rerouted trains in Baltimore and the Blue Ridge Sub, the network became congested.

The strain of upgrading a major piece of infrastructure that was long planned, along with performing myriad network repairs that were complete surprises, caught up with the railroad in the first quarter. Add in typical traffic challenges in winter, the costs associated with the traffic reroutes, macroeconomic uncertainty, market volatility and constant global trade policy shifts, and the Class I’s operational and financial performance suffered — in a big way.

In terms of operations in Q1 on a year-over-year basis, average velocity dipped 3%, terminal dwell time climbed 19% and cars on line rose 6%. From a financial standpoint, total revenue declined 7%, earnings per share fell 24%, net earnings plunged 27%, operating income tumbled 22% and the operating margin worsened by 5.9 points.

No excuses for poor period

The trying events became a relenting series, with one occurring each month for six straight months, said CSX President and CEO Joseph Hinrichs during the Class I’s first-quarter earnings conference on April 16. Nonetheless, the company has no excuses for coming up short with performance expectations, he stressed.

“We left good business on the table, reduced our revenues ... and incurred more expense,” Hinrichs said. “We recognize that [our] effort must translate into better outcomes, and that is where our attention is right now. The team is aligned, our expectations are clear and we are taking actions to stabilize our operations, improve efficiencies and enhance coordination.”

As of April 23, work had been completed more than 1,600 feet into the tunnel. CSX and design-build contractor Skanska/Fay S&B USA Construction use a gantry system tailored for the project to bring concrete slabs and other materials to work sites.

CSX

The compounding weather essentially forced the railroad to start from scratch in terms of operational recovery, said CSX Executive Vice President and Chief Operating Officer Mike Cory during the earnings conference.

“This last piece of flooding really affected a key corridor for us that we counted on to take the traffic off the Howard Street and the Blue Ridge reroutes,” he said. “So, it’s going to be a process.”

While CSXers are adopting a renewed commitment to operate a faster and more reliable railroad in the near term, they’re also pledging to better exploit the network and spur growth over the long term after the tunnel work and Blue Ridge Subdivision repairs are completed come November.

Although CSX spent months planning for the tunnel shutdown and the subsequent traffic reroutes — which involved cooperation with Amtrak and Norfolk Southern Railway to use their lines — the unexpected curveballs ruined the playbook.

“The buildup of a series of significant events really took away the capacity that we had planned once we took down the Howard Street Tunnel,” said Hinrichs.

So, completing the tunnel modernization project by Nov. 1 as scheduled is vital to help boost capacity and get CSX back on track with its growth and service reliability objectives.

Tunnel as a double-stack funnel

The project is designed to increase vertical clearance in the tunnel as well as address 22 additional obstructions along the corridor between Baltimore and Philadelphia that impede double-stack train operations along CSX’s I-95 corridor, its main north-south line on the East Coast.

The tunnel upgrades also will better connect the Seagirt Marine Terminal’s intermodal container transfer facility at the Port of Baltimore with interior distribution hubs, strengthen the port’s competitiveness with other East Coast ports, boost the region’s economy and improve connectivity to key consumer markets in the Midwest, says CSX Senior Director of Mid-Atlantic Construction Brandon Knapp.

“It will keep the Port of Baltimore economically vital for decades to come,” he says.

In addition, the project is expected to enhance operational efficiency, bolster the competitiveness of CSX-served markets and provide economic benefits to the region, such as alleviating supply-chain strain, reducing the cost of moving freight throughout Maryland and easing traffic congestion on Interstate 95.

“The transformational Howard Street Tunnel project will significantly increase business for the Port of Baltimore and generate an additional 7,300 jobs from the future business that will result from the project,” said Maryland Gov. Wes Moore in a submitted statement. “By double-stacking containers on rail, we are also helping to reduce highway traffic congestion and delivering environmental benefits with less emissions.”

The tunnel reconstruction is the culmination of many years of planning by a public-private partnership involving CSX, the port, U.S. Department of Transportation, state of Maryland, commonwealth of Pennsylvania and other stakeholders.

The port long has offered a deep 50-foot water channel and 50-foot docking berth, modern equipment, an on-dock ship/truck/train transfer facility and convenient access to the highway freight network. But Maryland Port Administration (MPA) officials have continued to seek the one missing piece in Baltimore to forming a true 21st century port: double-stack train operations.

“Adding double-stack capabilities to and from the port allows us to take our container business to another level and puts us on a more level playing field with our competitors,” said MPA Executive Director Jonathan Daniels in a submitted statement. “Working together with Ports America Chesapeake, CSX and our longshore labor team, we are very optimistic and excited about the growth of container handling in Baltimore.”

Dozens of workers are needed to advance the project 24/7. There typically are two 12-hour shifts scheduled per day in the tunnel.

CSX

The tunnel remains one of a few areas along its network where CSX can’t operate double-stack trains. The project is part of a larger initiative by CSX to clear 100% of its intermodal network for double-stack service.

The Howard Street structure is still the original brick-lined tunnel built between 1890 and 1895, with very few modifications completed since, including an expansion in the 1980s. The tunnel also repeatedly experiences water drainage issues.

The main goal of the design-build project is to excavate and lower the tunnel’s track by about two feet and improve drainage within the structure. The current single-track tunnel has a 19-foot, six-inch clearance, which is 18 inches short of what’s needed to accommodate double-stack trains.

“We’re going to be taking the floor out of the tunnel and rebuilding it to modern standards,” says Knapp.

The tunnel has three distinct sections: a mined, cut-and-cover and concrete box section. It generally extends under Howard Street from Camden Station to the former Mount Royal Station, with a cover that varies from less than 5 to 40 feet below ground level.

CSX is working with design-build contractor Skanska/Fay S&B USA Construction on the project. Dozens of crew members are needed to advance work 24/7. There typically are two 12-hour shifts scheduled per day, says Knapp.

A concrete solution

Precast concrete inverted slabs are being installed throughout the tunnel to support the new track by helping to optimize load-bearing requirements. The project requires about 1,190 of the 20-foot slabs. Overall, more than 7,100 feet of new precast concrete flooring will replace the aged tunnel invert floor and the brick beneath the old track.

“One key to the project is the concrete panels. We are getting more efficient with them as the new floor of the tunnel, which will help speed up the work,” says CSX VP of Engineering Chad Anderson.

The structure is still the original brick-lined tunnel built between 1890 and 1895, with very few modifications completed since, including an expansion in the 1980s. The tunnel also repeatedly experiences water drainage issues.

CSX

As of April 23, work had been completed more than 1,600 feet into the tunnel and 238 concrete slabs had been installed. CSX and Skanska/Fay are using a gantry system tailored for the project to bring materials — such as track panels and the concrete slabs — to work sites.

“After all the work is done, the tunnel should be good for another 50 to 100 years,” he says.

CSX initially planned to perform all the work as a start-and-stop effort under traffic conditions. But then the project would have taken about three-and-a-half years to complete — until about July 2027 — instead of eight months with traffic reroutes, says Anderson. In addition, the continuous work will help reduce the original project cost estimate by tens of millions of dollars.

“We are hoping to speed up the schedule and finish before Nov. 1,” says Anderson, adding that work so far is on schedule.

There is some related and nearby work that calls for modifying the North Avenue Bridge, reconstructing the Guilford Avenue and Harford Road bridges, and lowering or constructing track in several locations to remove obstructions or optimize capacity. Some of the work — mostly involving the overhead highway bridges — will stretch into 2026, perhaps to mid-2026

For example, a portion of the North Avenue arch bridge will be replaced with a signal span, shallow girder bridge, and the Harford Road arch bridge will be replaced with a single span, shallow girder bridge, which is required due to an existing water main conflict.

In addition, a nearby project calls for extending some double track, building track, and improving drainage and retaining walls to accommodate double-stack trains. Polivka International is the contractor for that project.

Essentially, a wipe out

While all the extensive work is underway in and around Baltimore, other considerable infrastructure work is in progress in North Carolina to recover from Hurricane Helene’s wrath.

The Category 4 hurricane reached eastern Tennessee and western North Carolina on Sept. 27, 2024, with historic rainfalls that spurred flash floods and landslides. The flooding caused extensive damage to several bridges and 60 miles of CSX’s line in Tennessee and North Carolina, which is part of the Blue Ridge Subdivision. The line normally handles about 14 million gross tons of freight a year and is a vital route, CSX leaders say.

Formerly part of CSX’s Huntington West Division, the subdivision runs through portions of North Carolina, South Carolina and Tennessee.

In October, Hurricane Helene nearly wiped out CSX’s bridge in Poplar, North Carolina. 

CSX

The damage cost is expected to exceed $400 million before insurance recoveries and the work is slated for completion by early November.

Shortly after the storm struck, CSX executives rode in helicopters to survey the damage. Essentially, the railroad was wiped out in certain areas.

“We got up there and we said, ‘wow.’ We saw significant damage. You have to go back to Hurricane Katrina for such major damage caused by natural disaster,” says Anderson. “But then we talked about how to attack it and rebuild it.”

Eight miles of track by the Nolichucky river and gorge was substantially hit and three bridges were either severely damaged or compromised. The reconstruction projects are being conducted in several phases.

The 8-mile section is a big challenge since the track mostly needs to be built from scratch and the topography is complicated, says Anderson.

“We are trying to get employees and equipment in both directions along the railroad,” he says.

The hurricane severely damaged CSX’s line between the Chestoa Recreation Area and Tennessee/North Carolina state line.

CSX

In terms of the bridge work, two in the Nolichucky Gorge area required repairs or reconstruction. The bridge south of Chestoa, Tennessee, sustained embankment damage but not significant structure damage.

A 60-foot bridge at the Tennessee and North Carolina state line needed to be reconstructed quickly to provide equipment access to areas south. All that work has been completed.

Meanwhile, a 520-foot bridge in Poplar, North Carolina, that was washed out by floodwaters is undergoing a rebuild. That work should be done by early July, says Anderson.

CSX plans to construct a ballast deck conversion bridge in Poplar to replace the previous open-deck structure to help ensure enhanced durability and stability. Crews recovered all six bridge spans and will reuse four of them. A new bridge pier will accommodate an additional span.

The railroad also is strengthening the three bridges that were impacted and fortifying the embankment in the gorge so all can better withstand extreme weather in the future.

CSX has enlisted help from about a dozen contractors that are handling about 80% of the work in the subdivision, says Anderson. About 60% of the work has been completed so far.

Upgrades galore

While work marches on both in North Carolina and Baltimore, CSX also continues to revamp the former Pan Am Railways portion of its network in the Northeast that was acquired in 2022. All rail, tie, ballast and crossing work is being performed by CSX forces and system production teams, says Anderson.

In addition, CSX recently wrapped up enhancements and upgrades to its Cumberland Yard in Maryland. Crews removed the hump and hump tower, and installed additional tracks optimized for flat switching. In addition, a new yard lead was built to help boost capacity from 350 cars per day, and three new switching leads and an additional 4,600-foot classification track were added.

The yard changes enable workers to assemble trains on two automated tracks while simultaneously moving other cars, which helps reduce car handlings and speed up operations.

The Cumberland Yard upgrades, Pan Am system work, tunnel project, Blue Ridge sub rebuild and general core infrastructure improvements will have a significant impact on fluidity and capacity, CSX leaders say.

The Class I needs all that infrastructure bolstering — and sooner rather than later — since the network disruptions over the past several months resulted in missed business-building opportunities in some key end markets.

For now, CSX is working closely to identify excess cars in yards and in active inventory to help reduce cars on line, said Hinrichs. The railroad also is trying to provide extra service to work cars off or reduce customers’ car pipelines to help foster fluidity.

“I want to reiterate the underlying strengths of our business. This is still the same great network,” Hinrichs stressed during the earnings conference. “We remain very well positioned to facilitate and benefit from the continued long-term trend toward expansion of U.S. manufacturing capacity.”

CSX also is favorably positioned to finish its two massive projects sometime in fall. It will be a great relief then to focus on day-to-day activities in the engineering department rather than on large and complicated projects, says Anderson.

“November can’t come soon enough,” he says.

Email questions or comments to jeff.stagl@tradepress.com.