Media Kit » Try RailPrime™ Today! »
Progressive Railroading
Newsletter Sign Up
Stay updated on news, articles and information for the rail industry

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

View Current Digital Issue »


Rail News Home CSX Transportation


Rail News: CSX Transportation

As more shippers consider rail, CSX aims to lure them in with more reliable service

To address a workforce shortage in operations, the Class I is adding about 100 train and engine-service workers each month.
Photo – CSX


By Jeff Stagl, Managing Editor

There was a time when CSX led the Class Is in several key service performance metrics, including train velocity and network fluidity. And it wasn’t all that long ago — in 2019. 

But that was then, and this is now. The state of the transportation world and the entire globe have changed a lot since. 

The pandemic’s impacts, supply-chain transformations and uncertainties, consumer-buying binges, train-crew workforce crunches, inflation woes not witnessed in more than 40 years and a host of other factors have caused a more than two-year-long erosion in CSX’s operational performance. As a result, average systemwide train velocity and terminal car dwell time continue to lag despite recent improvements. 

In the first quarter, velocity averaged 16 mph and dwell time averaged 11.2 hours per car compared with 18.9 mph and 10.8 hours, respectively, in first-quarter 2021. In last year’s fourth quarter, those metrics stood at 17.4 mph and 11 hours per car. 

Clearly, the railroad hasn’t “shown its best self” lately, said CSX Senior Vice President and Chief Strategy Officer Farrukh Bezar April 7 during a presentation at the North East Association of Rail Shippers annual meeting in Baltimore. 

“No matter what mode of transportation you’re looking at, we’re facing the same challenges as everyone else,” he said. “Our entire team is motivated to mitigate any service challenges as we emerge from the pandemic and address continuing supply-chain disruptions.” 

CSX leaders are working to revamp regional sales groups, leverage real estate teams, align operating personnel closer to sales and marketing staff, and develop a culture that unifies the company’s vision, said Bezar. 

However, the major operational aspects that need reworking are service reliability and execution, said CSX President and CEO James Foote March 16 during an appearance at the J.P. Morgan Industrial Conference in New York City. 

“We need to get back to 2019, when we had industry-leading reliability,” said Foote. “We’ve got to fix service and build up reliability and credibility, and then the opportunity gates open up.” 

The highly encouraging things for CSX? Business-growth opportunities abound in just about every commodity sector because of marketplace changes and supply-chain shifts. And truck rates are up 30% to 50% in some cases because of inflation and other impediments, which opens the door for more traffic diversions. 

What’s also energizing to CSX’s brain trust is the Surface Transportation Board’s approval last month of the Pan Am Systems purchase. Expected to close on June 1, the Pan Am acquisition will extend the Class I’s reach to a wider customer base over an expanded territory, create new efficiencies and pose robust opportunities to move freight to, from and within New England, CSX leaders say. 

The railroad already is encountering more demand than it can handle, which is a good problem to have, Foote said. To capitalize on its business-growth potential, CSX must prove it’s more effective and relevant in supply chains in addition to being a very reliable service provider. 

“We need to have a line of sight on opportunities, with more visibility on where growth is and stay ahead of it,” Foote said. “We think we will be prepared to handle all this demand in the latter half of the year. People want to move more by rail. This is our time to shine.” 

Headcount less of a headache 

But to lure shippers with the luster of highly reliable service, CSX needs to employ more people — a lot more. The Class I is still dealing with a significant workforce shortage. 

“This is not an issue we can ignore,” said Foote. 

That problem was exacerbated in January and February when “an extraordinary number of people were out” due to COVID-19’s Omicron variant, he said. 

“One day we had 350 people out,” Foote said. 

Now past that problematic period, the railroad is adding about 100 train and engine-service (T&E) workers each month. In Q1, the average daily number of employees in training reached 561 — more than five times the average of 108 in Q1 2021 — and conductor promotions climbed to 303 versus 35 a year earlier. The average daily number of active T&E workers rose to 6,629 as of April 22 compared with 6,218 on Jan. 22. 

Over the past year or so, CSX has lost the opportunity to move “lots” more traffic because of reduced operational headcount, said Foote. Now, T&E staffing is expected to be fully restored by the third quarter — the key to improving service and capturing more business. 

“We have said it again and again, our aim is to grow this railroad, and so we need to bring good people in, train them the right way and deliver on service,” said CSX Executive VP of Operations Jamie Boychuk April 20 during the Class I’s Q1 earnings conference. “It takes time, but this is exactly what we are doing.” 

While pursuing lots more hired help, the Class I continues the hunt for lots more business. Some of it can be obtained by winning over a growing number of shippers who are making modal choices based on carriers’ environmental, social and governance (ESG) efforts. 

“When I talk to shippers now, ESG is huge part of the conversation, more so than two to three years ago. Many times, the first 30 minutes of a conversation is focused on it,” said CSX EVP of Sales and Marketing Kevin Boone in an interview. “It’s been an incredible, incredible shift, and rail plays into it so well.” 

The case for ‘just in case’ 

Another thing he’s hearing from many shippers: Reliability now is more important than transit speed. Instead of seeking same- or next-day deliveries, a host of shippers will wait for cargo to arrive in two to four days. 

“This plays much better into rail,” Boone said. 

A customer recently told him that the key inventory strategy for the longest time had been just in time — meaning items arrived right when needed — but now it’s back to the older just-in-case approach, which involves maintaining large inventories on hand. The shift bodes well for CSX because network reliability and strong customer service will be big factors in the future, Boone said. 

It also would be favorable for CSX to tap accessible technology to learn more about shippers’ habits and demands. For example, data obtained from customers through the ShipCSX portal should be better processed to gain more market intelligence, said Foote. Digital intelligence is what helps burgeoning companies like Amazon and Walmart continue to grow, he believes. 

“A digital transformation isn’t just putting iPads in people’s hands,” said Foote. 

To further harness technologies and prompt efficiencies, CSX last month appointed Steve Fortune to the newly created role of EVP and chief digital and technology officer. 

Another way CSX can build traffic? By exploiting industrial development (ID) opportunities. The railroad currently has more than 500 projects in its ID pipeline.  

CSX’s business development team aims to help customers identify, design and develop new facilities by working with state and local economic development entities and leveraging partnerships with short lines to extend the railroad’s reach. 

The Class I currently is promoting 19 CSX Select Sites that are equipped for large-scale development, and more sites are planned in 2022. Premium rail-served sites are certified for ID and expansion through the CSX Select Sites program. 

The railroad needs to tap more ID opportunities, both large and small, said Foote. 

“We can look at helping to develop smaller pieces of property and not just wait for the huge auto plant that comes around once in a decade — don’t be so shortsighted,” he said. 

Major auto plants in offing 

Fortunately, CSX won’t have to wait long to gain business from three new major electric vehicle (EV) auto plants on its network. 

Ford Motor Co. is building a $5.6 billion assembly plant for the F-150 Lightning pickup truck and E-Series EV vehicles in Stanton, Tennessee, that’s slated to start production in 2025. In addition, the automaker is constructing a $5.8 billion battery park in Glendale, Kentucky — that also will be served by CSX — featuring two battery production facilities for a new lineup of Ford and Lincoln EVs. 

Transporting the incoming raw materials and outbound finished products will create an “eco-system” around the plants for CSX, said Boone.  

“We can put it all on rail,” he said. 

Meanwhile, EV maker Rivian is building a $5 billion automotive plant east of Atlanta that CSX might begin serving in 2024, and VinFast Automotive is constructing a $4 billion EV assembly plant and battery manufacturing facility at Triangle Innovation Point in Moncure, North Carolina, on the railroad’s network that’s slated to open in 2025. 

It might be surprising to some that the auto facilities are being built in the United States instead of in Mexico, where labor tends to be cheaper, Boone said. 

“But these will be mostly automated plants,” he said. 

CSX also expects to begin serving a new Nucor Steel facility in Apple Grove, West Virginia, in 2024.  

In addition, a surprising source of new business — a metallurgical coal mine — is slated to come online next year. 

Arch Resources Inc. is developing a new Leer South coal mine at its Allegheny Metallurgical operation near Volga, West Virginia. Beginning in Q1 2023, CSX will move metallurgical coal from the mine to its export coal facility in Curtis Bay, Maryland. 

A new Leer South mine already came online for Arch late last year that produces metallurgical export coal. The Appalachian and Ohio Railroad (A&O) moves the coal to an interchange with CSX in Grafton, West Virginia. Arch pursued the export coal expansion by working in partnership with CSX and the A&O.   

“I didn’t think we’d be saying ‘more coal’ a few years ago,” said Boone. 

If Russian coal is cut off due to the invasion of Ukraine, even more mines could be coming CSX’s way, he believes. 

Another traffic-building source that seemed unlikely just a short time ago: road and bridge building. But the federal Infrastructure Investment and Jobs Act will provide billions of dollars for such projects, which will require a lot of rock and other raw materials. 

“We can move a lot of that. Now we look at nontraditional freight as opportunities — that’s the missing link,” said Boone. “Speed to market is important. We’re looking for business that will stick.” 

To that end, CSX recently reached an agreement with the Georgia Port Authority to use capacity at its Carolina Connector or CCX intermodal facility in Nash County, North Carolina, for a volume relief initiative in the South Atlantic. Late last year, the Class I also worked with the authority to make its Hulsey Yard at the Port of Savannah available for inland terminal operations. 

The GPA had previously trucked cargo to Atlanta, but the arrangement increased the port’s throughput to help alleviate supply-chain congestion and helped receivers pick up cargo more quickly. The authority also was able to reduce its reliance on overstrained warehouse space and free up chassis availability. 

The Class I is striving to address chassis availability with its trucking partners and Quality Carriers Inc. subsidiary. The Class I acquired Quality Carriers — a leading provider of bulk liquid chemicals truck transportation services in North America — last year. 

ISO tanks in play 

CSX is working on something else with the subsidiary: a plan to soon introduce 20-foot domestic chemical ISO tank containers. The railroad has filed for a U.S. patent on the tanks, which will be designed to meet International Organization for Standardization (ISO) standards. 

Produced from stainless steel, the tanks are surrounded by various types of protective layers to more safely and optimally transport both hazardous and non-hazardous chemicals. CSX received the prototype from a South African supplier about two months ago and has approved production. 

The first 200 units are scheduled to arrive in July. The new tanks initially will be employed almost exclusively on CSX’s network, and then later will be transported in conjunction with an undisclosed western railroad. 

The railroad expects to place orders for another 500 to 800 tanks for delivery in 2023 and 2024. CSX also has developed a specially designed chassis — which is slated for delivery beginning in July — to support the new tanks. 

There are other initiatives and moves CSX is counting on to help grow traffic: One is a CSX Greenway premium door-to-door intermodal service between Florida, Georgia and the Northeast using refrigerated trailers, and another is the Pan Am acquisition. 

That deal will extend the Class I’s reach in Connecticut, New York and Massachusetts, and add Vermont, New Hampshire and Maine to its 23-state network. Obtaining Pan Am’s short-line subsidiaries, including Pan Am Railways Inc., will enable the Class I to offer service in an area from Maine in the north to the Boston region in the south and west to near Albany, New York. 

The complexity of the regulatory review process made it seem as if CSX was trying to “buy a UP,” given federal hearings totaled about 400 hours, said Foote. But it was worth it since the shipper community is ready for the service CSX can provide via Pan Am, he added. 

“It bolts onto our network perfectly,” said Foote.  

CSX plans to spend more than $100 million over the next three years to improve infrastructure on Pan Am’s network, including $50 million in the first year. 

“We will work to improve the service and efficiency,” said Foote. 

Creating capacity a new way 

Typically, capacity is an issue when a railroad aims to take on a lot more business, but CSX is in good stead across the network, said Boone. Plus, the Class I can gain a capacity and fluidity boost by preventing derailments, he says. 

Part of that prevention will come from expanding the use of an advanced train inspection portal (TIP) to more locations. A TIP is equipped with ultra-high-definition cameras and high-powered illumination devices designed to produce 360-degree scans of rail cars passing through at track speed. Advanced machine vision technology and software algorithms identify defects and automatically flag cars that need repairs. 

CSX recently unveiled a second TIP north of Waycross, Georgia, that complements one installed last year southeast of Waycross. More TIPs are in the planning stages. 

“Eventually, we will need to invest in our intermodal terminals, as well,” said Boone. 

It’s all part and parcel of finding more ways to both adapt and thrive in an ever-changing transportation environment. That’s the only approach that makes sense to realize current business growth goals while trying to ensure CSX figures heavily into the freight-rail marketplace that’s yet to come, said Boone. 

“We’re seeing the landscape continue to change,” he said. “And we’re still determining what the new normal is.”

 Email questions or comments to

Contact Progressive Railroading editorial staff.

More News from 5/12/2022