I’ve been reading various threads and a number of posters have stated or have implied that CSX has a lot of problems and is no longer considered “healthy”. Yet, there is little that is specific. A large transporation company that’s “supposedly” in poor shape, financially or infrastructurally usually has a core cluster cause of the “headaches”.
However, I’m a bit confused. WHAT specifically is ailing CSX? Are they on the verge of bankruptcy? Is it management vs. union issues? Poor customer relations? Losses in revenue? Mainline upgrade issues? Excessive taxation?
Can it be summed up and is there a realistic solution?
It just seems strange that CSX and NS are neighbors and yet NS is reporting healthy profits while CSX has leaned more towards the opposite direction on a bean counter’s financial health graph.
In my opinion, there are a number of reasons for CSX’s current state. But, first of all, their current state isn’t one of immenent collapse, they’re just not doing as well as NS.
Here’s what I think:[soapbox]
They are the smartest bunch of guys who can’t run a RR. They have some brilliant guys in Jax, but when it comes to implenting plans, they can never get it done. This is mostly a corp. cultural issue that could be fixed by the right leadership.
They have some really lousy routes. They are saddled with some really crappy single track lines with low capacity (Think L&N) and have not been able to invest enough to improve them. A good example is from Chattanooga to Cincy. While NS (nee SOU) invested a ton in the CNO&TP, the parallel L&N line is just like it’s been for 50 years. It’s gonna take a UP, BNSF or CN to come up with enough scratch to fix this one.
They made some bad strategic decisions. They abandoned some of the the “fast” B&O and made a decision to concentrate on bulk commodities just before the intermodal boom. They then had to pay thru the nose to get a part of Conrail to replace what they abandoned. They also should not have tried that merger with Conrail and should have just done a back door deal with NS at the start. Would have saved a bundle. Had to sell steamship and barge companies to help with debt that otherwise could have gone to capital improvement on the RR.
Really strange leadership at the top. Snow was just mediocre. He thought a successful RR was all about Washington politics.
Don, do you mean the Baltimore to St. Louis B&O route ? A very knowledgeable forum member said this about that route-
I couldn’t comment much on CSX’s situation you posed – except to note that CSX is so burdened with excess track to this day in the wrong places that adding yet another line back would seem to be going in the wrong direction.
Yes. Hindsight is always 20-20. So, judging them is really unfair, but 1/2 of the thier Conrail purchase basically just replaced that part of the B&O. (The C&O route accross KY would have been a nice one to have now, too - if only to get them close to Toyota - Georgetown.
I would guess that your number one topic should rightfully have its place in the “Annals of Understatement!”
I would offer that as a multi tasking corporation, they have extraced from the railroad side monies to support all the forerays into other areas, "Sea-Lan
It seems to me that the CSX suffers from two major problems.
Poor track conditions resulting from inadequate maintenance budgeting and
Lack of capacity resulting from abandonments and single tracking of former multi-tracked routes. The former SAL, ACL, RF&P lines in the Washington-Florida Corridor are prime examples.
I’ll be generous and say that CSX did not forsee the resurgence of freight traffic (unit coal, intermodal, container, automotive,chemical) which resulted in problem 2) above. Though it is difficult to understand why they continue to maintain their “abandonment” mentality even in recent times. CSX to this day spends less per mile on MOW than any other Class I road. It took the threat of major fines being imposed by the FRA following that embarsssing track inspection report of a few years ago to get them to spend even the miserly amount they spend currently on track maintenance.
The buzz word in railroading today is “Velocity”. Derailments, slow orders, and excessive time spent waiting on passing tracks which are the result of the two problems mentioned above are preventing CSX from obtaining that objective. Me thinks that they suffer from long standing “bean counter” managment policies as opposed to the other Class I’s which are investing heavily in the infrastructure needed to efficiently move todays traffic and prepare for future increased freight volumes. I greatly admire and have fond memories of its predecessor railroads but am not a fan of the CSX as operates today.
Here’s an CSX story from the Conrail purchase. Before Day One, CSX announced their intentions to increase the track speed on Conrail’s Chicago Line and the west half of the B&O from 60 to 70 mph. Sounds good, right? Faster is better. Conrail used to run van trains at 70 mph, so they’d just be “restoring lost glory”.
Here’s the rub. Because of signal spacing on the NYC, in order to qualify for 70 mph max, the train had to be less than 62 cars (conventional intermodal flats). By the mid 90s, most of the van trains exceeded 62 cars most days of the week, so there was little 70 mph running. And those trains that were allowed 70 needed the extra speed the least. They already has little difficulty meeting schedule. It was when the trains were unexpectedly long and wound up underpowered that time keeping was difficult (they had a hard time hitting 60!)
Now, add in that to run 70 mph you have to maintain class 5 track vs class 4 for 60 mph plus, the added fuel for those trains that could operate at 70 - just so they could arrive way early and you build a pretty good case for dropping the max speed to 60. So, Conrail did it - with no change to intermodal schedules and no impact on on time performance.
So, CSX spends a chunk of money to get the track back to class 5 condition plus the extra maintenance cost to keep it that way - and received no benefits other than being able to brag about it. For a RR that traditionally has had to scrounge for capital, they sure find “interesting” ways to spend it.
CSX has a problem moving traffic through “choke Points” like Atlanta, Buffalo (Frontier), Cincinnati (Queensgate),Cleveland, Louisville, Richmond (Acca), Toledo. I can’t think of all the places where CSX needs to invest some serious cash to relieve the congestion issues at these and other key terminals. It is all well and good to have a train run 70MPH out on the road, but when it hits a congested terminal and sits for 6 to 10 hours, with nowhere to go, what then?
Overall system wide they are moving cars well and have been for at least a year…back 2 and 3 years ago they were a nightmare (Katrina was not the original cause of their issues) they finally improved.
I have not heard anything that they are dooing poorly financiallly but they do seem to be the most aggressive of the class one’s in trying to get new volume.(Carload traffic contracts)
I am aware of a number of lines of business that previously had no system cars available (Shortage) that now has all kinds of their system cars sitting, some due to business market downturns (Automotive, construction) and some due to pricing, and other market policies that caused many (Including us) shippers to pull business and go to other carriers, modes or sources of supply.
For what its worth, as I’m not familiar with CSX from a railfan’s point of view, but am familiar with CSX as a shareholder…
I’ve seen evidence in the investment community that seems to indicate, from a business standpoint, that CSX is a good investment. And although recently some have downgraded the companies stock they seem to sight over anticiption of growth rather than some kind of slowdown in the company. The companies stock have performed very well, and there are no signs of any significant slowdown.
Now while this doesn’t exactly answer the question, investors typically don’t invest in companies they know will tank.[2c]
choke point?yeah you have 3 different dispatchers controlling the deshler diamond.who goes first?plus ive had a lot of crews tell me that csx pays them good $$ to just sit and wait.
Are there not still long stretches of the CSX line (ex-ACL) between Florida and Washington that are double tracked for miles, especially in the Carolinas?
When I rode Amtrak’s Silver Star on my way to New York a few years back, we certainly did pass quite a number of CSX freights. Those dispatchers in Jacksonville must certainly have their hands full.
I dont have much railfanning experience of the CSX, nor do I own their stock so I cant really add too much other than what I read in the press and books, etc.
I have always been puzzled by CSX’s decision to pull up the B&O line across Southern Ohio/ WVA. I grew up in Southern Illinois near that line and while it was never a busy line, it was very well maintained with 60mph for freights. That speed limit, I understand is now considerably lower and the line is run by track warrents, but STILL…it is a mainline to St. Louis. Why it was severed,other than to meet short term goals (and executive bonus?) is a mystery.
I listen to the Fostoria web based scanner from time to time and that seems like quite a busy place.
Don, I really appreciate your observations and comments on this.
WELL… CSX from buffalo to Syracuse chicago main line see more than half amount of freight that conrail ran and the river line see less and less freight. Most of the chicago main line from batavia NY heading east and heading west from Syracuse you are dispached from selkirk NY.
snow,snow job ha ha…how many millions did he snowball from the company???
me thinks another reason for poor csx performance is poor motive power…still use ge 30s on main line thru folkston…and half of diesals are rental units,they need to order several hundred gevos n aces.
yeah fostoria is a busy place.especially now with the detour trains.CSX wishes it still had its B&O line in southern ohio too.anyway to add a little bit had to call a dark signal in and a major kink in the rail from my old neighborhood.I wonder how they can run trains at all sometimes.
The more I think about it, there are probably a few other routes they wish they had back. For one, they pulled up the Cincinnati - Chicago (ex C&O line). It did make a sharp right turn at LaCrosse, In to Wellsboro to join the B&O main, but still, one would think it would be better doing that rather than north to Deshler and then make a sharp left.
Their whole rationalizing of lines just didnt seem to make much sense then…less sense now. NS seemed to hang on to the lines in question.
Ed, there’s a thread about the bridge over the Anacostia River, just south of Washington, D.C., that needs repair, and trains from the Northeast to Richmond and points south are detouring over any line that can handle them–as Joe says, some as far out as Deshler. The line that B&O has abandoned probably wouldn’t have helped much in this case.
Having said that, I tend to wonder about CSX. If the stockholders think it quacks like a healthy railroad, it must be a healthy railroad.
But…
It apparently doesn’t want to spend the money on the stuff it needs to provide competitive service (well-maintained track and new employees come to mind), and employee morale, from what I’ve heard (secondhand, I admit, from UP employees who are in contact with CSX employees), is pretty low. At least in its business statement UP puts customer service and a place where employees want to work right up there with providing a return for stockholders. I’m not sure CSX has those priorities, but I’m sure that there will be problems down the road without them.
Ed, FWIW, there was more undesirable about that C&O line than just La Crosse.
Take a look at the low clearance in the photo below, where said line squeezes under the former Big Four main through Muncie. The former C&O line is now the asphalt bike path (Cardinal trail)…but when you see in person how short that clearance is, it makes one wonder what people could possibly have been thinking when they built it. If you climb up behind the retaining wall on the left hand side, you actually have to stoop over to climb in underneath the bridge, it’s so close
And to the left of the dirt berm is the White River, paralleling the C&O bike path with the normal water level not much lower than the path height… Even digging a trench to set the tracks deeper probably would be best avoided, because it would be flood prone.
Just eyeballing the clearance, it looks like a very standard boxcar would clear the opening, no hi-cube for sure.
There used to be more of a dip under the Big Four at Muncie, they took some of it out when they built the bike path. Trouble is, it used to fill up with water on a regular basis. The C&O of Indiana had both clearance issues and grade issues, climbing up out of the Wabash River Valley at Peru was quite a task for both the C&O and the NKP Indianapolis-Michigan City line. The clearances under the N&W (NKP) at Muncie and under the PRR at Richmond also would have had to have a great deal of work to run todays’ trains. I understand the B&O across Southern Ohio was abandoned as much for lack of on-line business as anything. Shortsighted? I think so but that’s just a personal opinion, I wonder what NS wishes it had back. Do any corporate people really think they would use the old Cloverleaf to St. Louis from Frankfort or the LE&W line from Fostoria to Muncie that was sold off and leased west of Lima to the Ohio/Indiana state line? I don’t really know but I’m fairly certain they don’t miss the Wheeling much.
