Executive Briefings

CSX Warns of 'Bumps in the Road' As It Tightens Rail Schedules

CSX Corp. is telling some shippers to brace for growing pains, including additional days of transit times, as the railway implements Chief Executive Hunter Harrison's plan to tighten schedules.

Harrison, who joined CSX in March, is in the early days of executing the "precision railroading" that he put in place while leading two of Canada’s largest railways. The strategy includes hewing to more precise schedules but upends some aspects of the Jacksonville, Fla., railroad company's network, such as shutting down yards that sort long trains and idling hundreds of locomotives and freight cars.

During a call with analysts last week, CSX executives said they have told customers that as they are making these changes, any short-term disruptions would eventually pay off with a better-run railroad and more predictable delivery times.

“There’s going to be a little pain and suffering,” Harrison said. “I don’t know, frankly, how to get there without some bumps in the road.”

He added a sentiment he said he is hearing from customers: “We’re willing to suffer some cuts and bruises along the way, just don’t bruise us too much.”

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Harrison, who joined CSX in March, is in the early days of executing the "precision railroading" that he put in place while leading two of Canada’s largest railways. The strategy includes hewing to more precise schedules but upends some aspects of the Jacksonville, Fla., railroad company's network, such as shutting down yards that sort long trains and idling hundreds of locomotives and freight cars.

During a call with analysts last week, CSX executives said they have told customers that as they are making these changes, any short-term disruptions would eventually pay off with a better-run railroad and more predictable delivery times.

“There’s going to be a little pain and suffering,” Harrison said. “I don’t know, frankly, how to get there without some bumps in the road.”

He added a sentiment he said he is hearing from customers: “We’re willing to suffer some cuts and bruises along the way, just don’t bruise us too much.”

Read Full Article