QuoteCSX Corp. has agreed to hire Hunter Harrison as its next chief executive officer, giving the railroad veteran a four-year contract.
The hiring of Harrison brings closure to weeks of negotiations between CSX and investment firm Mantle Ridge. Paul Hilal, the founder of Mantle Ridge, won CSX approval to nominate five new directors to what is now a 12-member board — Harrison, Hilal, Dennis Reilley, Linda Riefler and John Zillmer — bringing the board to 13 members.
Full article: http://www.bizjournals.com/jacksonville/news/2017/03/06/csx-agrees-to-hire-hunter-harrison-as.html
Wow... sooo what next??
http://www.cnbc.com/2017/03/06/csx-names-veteran-railroad-executive-to-be-new-ceo-in-deal-with-activist-investor--.html
Quote"Together, we will implement Precision Scheduled Railroading — a model proven to improve safety, create better service for customers, produce a proud and winning culture for employees, and generate exceptional, lasting value for shareholders," Harrison said.
From what I've heard within CSX, they are moving all employees from the South Point location into the HQ downtown... however with the recent layoffs, its still a net loss downtown.
Apparently today is the big "reorganization" and we should know more at the end of the week.
One of the two SP buildings is nearly empty now...
Interesting excerpt from http://www.bizjournals.com/jacksonville/news/2017/03/06/changes-on-track-for-csx-is-a-leaner-more.html
QuoteMoving CSX to a more efficient system might just be the first step in Harrison's transformation of the company.
His ultimate dream might be bigger.
Harrison wants to be the head of a company that creates a transcontinental railroad to be a part of his legacy, said Vantuono.
In Harrison's attempt to merge railroads and build a transcontinental network, Harrison tried to acquire Norfolk Southern last year and CSX in 2014 and 2016.
"Everyone is wondering if the equilibrium that exists in the industry is going to be disrupted if a carrier like CSX makes a major move," Schwieterman said. "We have two big players in the East (CSX and Norfolk Southern) and two in the West (Union Pacific and Burlington Northern Santa Fe). If one of the four carriers makes a major move to change this, the others may feel compelled to follow suit. If he does become CEO, there could be some fireworks ahead."
Bill Vantuono said that Harrison believes strongly in the value of a transcontinental railroad and there are efficiencies to be gained and that the operation would be smoother. Vantuono also said Harrison thinks service and cost structure would improve with a transcontinental railroad.
While pursuing mergers at Canadian Pacific, Harrison said he believes the creation of a new transcontinental railroad could improve congestion around Chicago, where east and west-based railways meet and hand off cargo — a process that can now take days.
That's in the future, though. For now, the focus is on the next step: Will CSX's shareholders agree to a pay package that the company's board has argued is outsized? Will shareholders be OK with major changes to the board?
The answer will come in two weeks (if not sooner), when shareholders make their views known at the special meeting.
What's not in doubt is if the former oiler turned chief executive officer makes the First Coast his new home, his presence will be felt quickly and widely across CSX's network.
"The first sign [of Harrison] is going to be in operating revenue, more revenue, less expense," said Blanchard, who has known Harrison for over two decades. "Hunter Harrison's reason for living is running a railroad."
I'd say that CSX and CP want to merge as of yesterday afternoon.
It seems like things will get pretty interesting over the next couple of years. I assume CSX is a "buy" stock now?
Cross your fingers folks. This could be good or really bad.
Quote from: thelakelander on March 07, 2017, 08:35:03 AM
It seems like things will get pretty interesting over the next couple of years. I assume CSX is a "buy" stock now?
I wouldn't bet on it. I think "his" gains are already priced in.
Quote from: remc86007 on March 07, 2017, 10:10:14 AM
Quote from: thelakelander on March 07, 2017, 08:35:03 AM
It seems like things will get pretty interesting over the next couple of years. I assume CSX is a "buy" stock now?
I wouldn't bet on it. I think "his" gains are already priced in.
Yeah, already big gains over the last couple of months.
https://www.forbes.com/sites/antoinegara/2017/03/06/hunter-harrison-csx-mantle-ridge-canadian-pacific/#376941a66b14
According to Forbes...
QuoteLike Norfolk Southern, CSX is considered to be one the least efficient railroads in North America. It's EBITDA has barely budged over the past four years and its profits are below 2011 levels. From 2011 to present, by contrast, Canadian Pacific's profits have tripled and its EBITDA has doubled, mostly due to the efficiencies implemented by Harrison and in partnership with Pershing Square.
There is still some technicalities to work out.
While HH's retirement agreement with CP allowed him to go few railroads (CSX was one), if he becomes the CEO, he has to repay CP for his $84 million retirement agreement.
The reconstituted board has to vote to agree to have CSX pay HH the $84M, so he can repay CP.
It's was CP's "poison pill" to keep HH from shopping himself too freely post retirement (a lesson CN learned the hard way). His no compete clause forbids him from working at UP, BNSF and CN.
If the board doesn't agree to reimburse HH the $84 million, he will resign.
All I have to say is this, yes, some CSX shareholders are going to do well if HH has his way, but the $84 Million would have covered a lot of heads that recently rolled. For CSX to cashier that much strictly based on the hubris of one CEO makes me ask myself, surely there are other, less expensive people in the RR world who can implement a similar plan at less of a cost? Good grief, railroad CEO's are now sports free agents and owners will pay anything to get them. Seriously?
The naysayers are saying that HH has had it easy reforming railroads that have long run times (like CN and CP), but that reforming CSX with mostly shorter hauls with your leading revenue producer (coal) on the decline will be a bigger (and harder) nut for him to crack.
Quote from: Lunican on March 07, 2017, 08:32:24 AM
Interesting excerpt from http://www.bizjournals.com/jacksonville/news/2017/03/06/changes-on-track-for-csx-is-a-leaner-more.html
QuoteMoving CSX to a more efficient system might just be the first step in Harrison's transformation of the company.
His ultimate dream might be bigger.
Harrison wants to be the head of a company that creates a transcontinental railroad to be a part of his legacy, said Vantuono.
In Harrison's attempt to merge railroads and build a transcontinental network, Harrison tried to acquire Norfolk Southern last year and CSX in 2014 and 2016.
"Everyone is wondering if the equilibrium that exists in the industry is going to be disrupted if a carrier like CSX makes a major move," Schwieterman said. "We have two big players in the East (CSX and Norfolk Southern) and two in the West (Union Pacific and Burlington Northern Santa Fe). If one of the four carriers makes a major move to change this, the others may feel compelled to follow suit. If he does become CEO, there could be some fireworks ahead."
Bill Vantuono said that Harrison believes strongly in the value of a transcontinental railroad and there are efficiencies to be gained and that the operation would be smoother. Vantuono also said Harrison thinks service and cost structure would improve with a transcontinental railroad.
While pursuing mergers at Canadian Pacific, Harrison said he believes the creation of a new transcontinental railroad could improve congestion around Chicago, where east and west-based railways meet and hand off cargo — a process that can now take days.
That's in the future, though. For now, the focus is on the next step: Will CSX's shareholders agree to a pay package that the company's board has argued is outsized? Will shareholders be OK with major changes to the board?
The answer will come in two weeks (if not sooner), when shareholders make their views known at the special meeting.
What's not in doubt is if the former oiler turned chief executive officer makes the First Coast his new home, his presence will be felt quickly and widely across CSX's network.
"The first sign [of Harrison] is going to be in operating revenue, more revenue, less expense," said Blanchard, who has known Harrison for over two decades. "Hunter Harrison's reason for living is running a railroad."
I'd say that CSX and CP want to merge as of yesterday afternoon.
Interesting. This may be like the President of Willamette Industries leaving to be the CEO of Weyerhaeuser several years ago. The next year Weyerhaeuser bought Willamette. The story was Weyerhaeuser bought Willamette using Willamette dollars.
Quote from: jaxjags on March 07, 2017, 11:40:21 PM
Quote from: Lunican on March 07, 2017, 08:32:24 AM
Interesting excerpt from http://www.bizjournals.com/jacksonville/news/2017/03/06/changes-on-track-for-csx-is-a-leaner-more.html
QuoteMoving CSX to a more efficient system might just be the first step in Harrison's transformation of the company.
His ultimate dream might be bigger.
Harrison wants to be the head of a company that creates a transcontinental railroad to be a part of his legacy, said Vantuono.
In Harrison's attempt to merge railroads and build a transcontinental network, Harrison tried to acquire Norfolk Southern last year and CSX in 2014 and 2016.
"Everyone is wondering if the equilibrium that exists in the industry is going to be disrupted if a carrier like CSX makes a major move," Schwieterman said. "We have two big players in the East (CSX and Norfolk Southern) and two in the West (Union Pacific and Burlington Northern Santa Fe). If one of the four carriers makes a major move to change this, the others may feel compelled to follow suit. If he does become CEO, there could be some fireworks ahead."
Bill Vantuono said that Harrison believes strongly in the value of a transcontinental railroad and there are efficiencies to be gained and that the operation would be smoother. Vantuono also said Harrison thinks service and cost structure would improve with a transcontinental railroad.
While pursuing mergers at Canadian Pacific, Harrison said he believes the creation of a new transcontinental railroad could improve congestion around Chicago, where east and west-based railways meet and hand off cargo — a process that can now take days.
That's in the future, though. For now, the focus is on the next step: Will CSX's shareholders agree to a pay package that the company's board has argued is outsized? Will shareholders be OK with major changes to the board?
The answer will come in two weeks (if not sooner), when shareholders make their views known at the special meeting.
What's not in doubt is if the former oiler turned chief executive officer makes the First Coast his new home, his presence will be felt quickly and widely across CSX's network.
"The first sign [of Harrison] is going to be in operating revenue, more revenue, less expense," said Blanchard, who has known Harrison for over two decades. "Hunter Harrison's reason for living is running a railroad."
I'd say that CSX and CP want to merge as of yesterday afternoon.
Interesting. This may be like the President of Willamette Industries leaving to be the CEO of Weyerhaeuser several years ago. The next year Weyerhaeuser bought Willamette. The story was Weyerhaeuser bought Willamette using Willamette dollars.
Or the CEO of Greyhound Bus using its fully funded pension fund as leverage to buyout Dial Soap. Then underfunded the pension to pay off the acquisition debt.
When it paid off, spun off Greyhound Bus with small debt, underfunded pension and no capital.
Meanwhile Dial Soap blossomed and made millions, while Greyhound limped along for many years.
Its probably important for HH to get is $83 million because he might have combined that with Mantle's offer to acquire leverage. If he doesnt get it back, it has to come out of his hide. He recently sold his mega ranch in central Florida, so maybe the guy is a true gambler and was going "all in" on CSX thinking he can double his money through stock value.
If he doesnt, he can still fall back on his $83 million from CP and play golf outside West Palm the rest of his life.
Wow. You have to layoff a ton of people just cover the costs for getting this guy in the door:
QuoteOMAHA, Neb. — CSX railroad agreed to pay its new CEO Hunter Harrison a $2.2 million salary and offer a target bonus of $2.8 million, but those are some of the smaller pieces of his compensation package.
The Jacksonville, Florida-based railroad also tentatively agreed to reimburse $84 million that Harrison forfeited when he retired early from Canadian Pacific railroad in January.
Full article: http://jacksonville.com/business/metro/2017-03-08/jacksonville-based-csx-will-pay-new-ceo-harrison-5-million-salary-and
I saw it just announced that the layoffs are completed. 500 of the jobs were in Jacksonville and nearly half of those were eligible for retirement and will received and enhanced retirement package.
Per Daily Record story.
Quote from: thelakelander on March 08, 2017, 01:04:23 PM
Wow. You have to layoff a ton of people just cover the costs for getting this guy in the door:
QuoteOMAHA, Neb. — CSX railroad agreed to pay its new CEO Hunter Harrison a $2.2 million salary and offer a target bonus of $2.8 million, but those are some of the smaller pieces of his compensation package.
The Jacksonville, Florida-based railroad also tentatively agreed to reimburse $84 million that Harrison forfeited when he retired early from Canadian Pacific railroad in January.
Full article: http://jacksonville.com/business/metro/2017-03-08/jacksonville-based-csx-will-pay-new-ceo-harrison-5-million-salary-and
And this my friends is what I don't like about this kind of business. Making money, sure, off the backs of the displaced, not so much.
The fact that CSX already had 500 employees "retirement ready" for an accelerated package from the RRIF may not be a bad thing. The RRIF payouts are generous. But the 500 who weren't......here is hoping greater Jacksonville can absorb them quickly.
Guess when you are about to pay someone $84 Million, you make sure he is fit and healthy. Maybe CSX couldn't get an insurance policy on him...ouch!
Per WOKV:
http://www.wokv.com/news/local/questions-emerge-about-health-new-ceo-csx/I9nu2i7fO80ih66IS11gcM/ (http://www.wokv.com/news/local/questions-emerge-about-health-new-ceo-csx/I9nu2i7fO80ih66IS11gcM/)
QUESTIONS EMERGE ABOUT HEALTH OF NEW CEO AT CSX
(http://www.wokv.com/rf/image_lowres/Wires/w2/AP_State_Online_Florida/2017/05/18/Images/41890af0229f4b2d915729810487ebee.jpg)
JACKSONVILLE, Fla. - Questions about the health of the CEO hired by CSX railroad this spring are being raised ahead of next month's shareholder vote on his compensation.
The Wall Street Journal reports (http://on.wsj.com/2qB5xQG ) 72-year-old Hunter Harrison often works from home and occasionally uses oxygen because of an undisclosed health issue
Harrison told the newspaper doctors cleared him to work, and he believes he can lead the turnaround he began in March at CSX.
"I'm having a ball and I'm running on so much adrenaline that no one can stop me," Harrison told the Journal. "Don't judge me by my medical record, judge me by my performance."
While leading Canadian Pacific railroad, Harrison took an extended leave in 2015 after leg surgery and pneumonia. He often worked from his home near West Palm Beach, Florida, during his last two years as CP's CEO.
CSX Executive Vice President Frank Lonegro said Harrison remains fully engaged. Lonegro spoke Thursday at a Bank of America Merril Lynch conference, and he said using oxygen hasn't slowed Harrison.
"I've gotten a dose of leadership from him while he had supplemental oxygen. I've had a dose of leadership from him when he hasn't had supplemental oxygen and they were equally as blunt and equally as effective," Lonegro said. "So, no question about who's in charge and no question about how engaged he is."
CSX shareholders will vote early next month on whether the Jacksonville, Florida, railroad should pay the $84 million in compensation Harrison forfeited when he left Canadian Pacific railroad earlier than planned. Harrison has said he will resign if the compensation isn't approved.
Harrison was hired in March after the Mantle Ridge hedge fund pressured the railroad to make changes. Harrison has a track record of reducing costs and boosting profits through the scheduled operating model he developed at CP and Canadian National.
"Harrison has a track record of reducing costs and boosting profits through the scheduled operating model he developed at CP and Canadian National."
Reducing costs= firing people.
Boosting profits = charging more.
Wow. Need an MBA for that?
"CSX shareholders will vote early next month on whether the Jacksonville, Florida, railroad should pay the $84 million in compensation Harrison forfeited when he left Canadian Pacific railroad earlier than planned. Harrison has said he will resign if the compensation isn't approved."
Sort of like being held hostage? Let him go. No doubt CSX can find capable leadership without the $84 million dollar signing bonus.
I hear John Delaney is available.
Quote from: MusicMan on May 18, 2017, 10:56:31 PM
"Harrison has a track record of reducing costs and boosting profits through the scheduled operating model he developed at CP and Canadian National."
Reducing costs= firing people.
Boosting profits = charging more.
Wow. Need an MBA for that?
"CSX shareholders will vote early next month on whether the Jacksonville, Florida, railroad should pay the $84 million in compensation Harrison forfeited when he left Canadian Pacific railroad earlier than planned. Harrison has said he will resign if the compensation isn't approved."
Sort of like being held hostage? Let him go. No doubt CSX can find capable leadership without the $84 million dollar signing bonus.
I hear John Delaney is available.
Firing people = Yes.
Charging more, not so easy.
He actually makes money by running on fixed schedules. If the shipper or supplier isn't ready with their loads, they move on without. Brings predictable service levels and allows the railroad to cut overhead because they can better predict where resources will be needed.
Ocklawaha can probably provide better detail than I can.
"Old fashioned" rail used to wait for loads to arrive before the next set would leave to make sure they followed a pre-described load factor. But then loads arrived late, the next set coming off the hump yard wasn't sure what the next load set would contain, so you need more people in the yard to keep it straight and more engines hanging around, and by rote, more engineers on standby.
If you always know exactly when you are coming, and going, then you know how many engines to stage, how many engineers to have ready to run them and how much fuel in the tanks.
CSX keeps a lot of standby yards to handle overflows. Not under Harrison. He will close any yard not meeting certain criteria. In fact the day after they announced his arrival, they closed a overflow yard near Atlanta.
He has a "culture" about new railroading that is difficult to grasp at first, but when things start flowing, it does lead to better performance.
Personally, I don't think the guy should get the $84 million, I think that is much. Yes, he has the knowledge and experience, but you want to tell me that "no one" has it as well?
Also, his experience (Illinois Central, CN, CP Rail) has route miles (for the most part) in very consistent geography. CSX and NS run in a different part of the woods nationally, where geography plays a bigger role in establishing operating requirements. I am not sure his culture will scale quite as well at CSX as it did elsewhere. But I am not a professional railroader, so I am strictly armchair quarterbacking here.
The Harrison PR machine is in full action:
Per Trains:
http://trn.trains.com/news/news-wire/2017/05/18-csx-improves (http://trn.trains.com/news/news-wire/2017/05/18-csx-improves)
BOSTON — CSX Transportation executives say their railroad is improving by operational leaps in the 10 weeks since E. Hunter Harrison took over as CEO. The improvements are headlined by a 52-percent jump in on-time performance.
"We're at the beginning of an amazing transformation," Chief Financial Officer Frank Lonegro said at a transportation conference on May 18.
Train velocity was up 14 percent and terminal dwell was down 11 percent as CSX rolls out Harrison's precision scheduled railroad operating model. On-time originations rose 16 percent, to 91.6 percent, while on-time arrivals jumped to 87.6 percent from just 57.8 percent.
CSX also is becoming more efficient by hauling the same amount of tonnage on far fewer trains. The railroad's revenue-ton miles have held steady while the active train count has fallen by 15 percent.
"You're going to continue to see that improve," Lonegro says.
Lonegro credits Harrison for creating a winning mentality in the railroad's Jacksonville, Fla., headquarters while driving "an unheard of" pace of change.
"He really has hit the ground running and has begun to implement precision scheduled railroading across our railroad," Lonegro says.
Keys to the improvements include running a balanced train plan, keeping terminals fluid, and reducing handling en route.
"Hunter's philosophy is move the freight as far as you can as fast as you can and touch it as few times as you possibly can," Lonegro says.
And that means don't put traffic through hump yards if you don't have to.
"At CSX historically we have been a big believer that the most efficient way to class traffic is through a hump yard," Lonegro says. "Hunter has totally debunked that."
CSX has already converted four hump yards — Toledo, Ohio; Louisville, Ky.; Hamlet, N.C.; and Atlanta — to flat-switching facilities. As part of the conversions, train plans have been modified so that traffic bypasses the yards, with the exception of cars destined for those locations.
The remaining eight hump yards are under "heavy evaluation" Lonegro says. More hump yards will be converted to flat switching this quarter, he says, and CSX ultimately will be left with just three or so hump yards. The final number could be two or four active humps, Lonegro adds.
CSX has stored 551 locomotives and parked, scrapped, or returned more than 22,000 freight cars so far this year as it is able to move freight more efficiently.
Is CSX hearing negative reactions from shippers or seeing volumes shift to Norfolk Southern as it makes operational changes?
"We're really not seeing any market share shifts," Lonegro says, although he acknowledges that the potential for service missteps as changes unfold. But he says customers are getting faster transit times, improved on-time performance, and better cycle times on their freight cars.
With better service and lower costs, CSX should be able to grab business from trucks, and not just intermodal business. Harrison "believes we can grow merchandise, which was not necessarily something we thought we could do absent economic lift," Lonegro says.
Lonegro spoke at the Bank of America Merrill Lynch 2017 Transportation Conference.
CSX Transportation board votes to reimburse Harrison, Mantle Ridge
http://trn.trains.com/news/news-wire/2017/06/19-csx-hunter (http://trn.trains.com/news/news-wire/2017/06/19-csx-hunter)
JACKSONVILLE, Fla. – CSX Transportation's board of directors has agreed to reimburse CEO E. Hunter Harrison and his hedge fund partner $84 million for salary and benefits Harrison forfeited by leaving early from the top job at Canadian Pacific.
The board was expected to approve the reimbursement request, especially after shareholders overwhelmingly approved a non-binding resolution at the company's annual meeting on June 5. CSX had put the matter before shareholders due to the unusual size and scope of the request.
Harrison had said he would resign if shareholders did not approve the reimbursement request.
In a regulatory filing on June 16, CSX said it will pay the Mantle Ridge hedge fund $55 million and provide Harrison with a lump-sum payment of $29 million. The railroad also will pick up the tab for Harrison's taxes related to the payment.
The CSX board said it considered many factors in making the decision. Chief among them was Harrison's track record at Illinois Central, Canadian National, and CP, where his system of precision scheduled railroading dramatically reduced operating ratio and increased profitability and share prices at each railroad.
The board also cited the operational improvements made at CSX since Harrison took over on March 6.
And it said it considered the risks associated with Harrison's health. The 72-year-old CEO has an undisclosed medical condition that sometimes requires him to use supplemental oxygen. CSX executives have said that Harrison remains as hard-driving as ever and that concerns about his health are overblown.
Harrison left CP on Jan. 18, five months ahead of schedule, so that he could join forces with Mantle Ridge to pursue a management shakeup at CSX.
CSX reduces workforce at Huntington locomotive shops
http://trn.trains.com/news/news-wire/2017/06/19-csx-reduces-workforce-at-huntington-locomotive-shops
HUNTINGTON, W.Va. — CSX Transportation is furloughing nearly 70 workers at its locomotive repair shops in Huntington, NBC affiliate WSAZ-TV reports. The reduction in workforce is the latest decision in the railroad's ongoing effort to streamline operations and operate more efficiently.
Approximately 270 employees will remain at the shops and the affected workers are eligible to seek positions at other nearby facilities, the article says.
A source familiar with the matter tells Trains News Wire the furloughed workers include mainly third shift shop workers and clerk positions. The locomotive shops are responsible for repainting and servicing locomotives and are the head shop for the railroad's GP38-3 and GP40-3 rebuild program. The EMD-built locomotives are numbered in the 2000 and 6500 series and are rebuilt mainly from former GP38-2 and GP40-2 locomotives.
The shops also once managed the SD40-3 rebuild program, but that work has since been contracted to Wabtec Corp's Motive Power Industries in Boise, Idaho.
The Huntington shops have been profiled in two recent Trains News Wire stories after shop workers painted two locomotives in CSX predecessor schemes. The locomotives included a Chessie-painted Chesapeake & Ohio B30-7 No. 8272 and C&O SD40 No. 7538. The B30-7 was recently delivered to the Lake Shore Railway Museum in North East, Pa., while C&O No. 7538 is headed to the Chesapeake & Ohio Historical Society in Clifton Forge, Va.
The Huntington facility is a former C&O facility and is located on CSX's Kanawha Subdivision located between Russell, Ky., and Charleston, W.Va.
Union won't accept Harrison's blame for CSX service failures
http://trn.trains.com/news/news-wire/2017/08/08-csx-and-unions (http://trn.trains.com/news/news-wire/2017/08/08-csx-and-unions)
JACKSONVILLE, Fla. — The union representing CSX Transportation conductors and other operating employees has a message for CEO E. Hunter Harrison: Don't blame us for the railroad's service problems.
Last month, in a letter to CSX customers, Harrison said employee resistance to change has resulted in service disruptions.
Not so, according to the five general chairmen of the SMART Transportation Division.
"The organization refuses to accept responsibility for service disruptions that negatively affect the customers when we have no input on operational changes," the chairmen wrote to Harrison in a letter dated Aug. 3.
"Our members, the ballast line employees, rightfully take your comments as a personal attack on their professionalism," the chairmen wrote. "Your letter was a kick to the gut and a severe blow to their morale."
The union rank-and-file have worked through numerous operational challenges, the chairmen wrote. And their "support and advice" regarding operations has been ignored, the union officials said.
The union's members are stockholders, the chairmen noted, and have a vested interest in the direction of the company. "To suggest contract employees would intentionally disrupt operations misleads the general public and insults the integrity of our crafts," the chairmen wrote.
The union officials also said the membership is "pushing forward" despite "harsh treatment," furloughs, and what it said were management's repeated contract violations. General Chairman John Whitaker did not immediately respond to a request for additional comment.
Harrison has made sweeping operational changes at CSX while rolling out precision scheduled railroading. Seven of the railroad's dozen humps have been converted to flat-switching facilities, and service has been redesigned so that cars bypass terminals and are handled fewer times en route.
"The 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," Harrison wrote to customers. "This resistance to change has resulted in some service disruptions. To those customers that have experienced such issues, we sincerely apologize. As we move forward, we will continue to address these internal personnel matters."
A growing number of service disruptions — and complaints from shippers — last month prompted federal regulators to step up monitoring of CSX. Dwell has soared at several major terminals, train speeds have declined, and some shippers have reported diverting business to truck or rival Norfolk Southern.
J.B. Hunt, for example, advised its intermodal customers to expect continued delays at certain terminals across the South while the railroad works to implement service improvements. As of July 31, the trucking company warned its customers to expect delays of 48 to 72 hours in Jacksonville and Tampa; Fla.; Charlotte, N.C.; and Memphis, Tenn. Delays of 24 to 48 hours were occurring in Atlanta and Savannah, Ga.
CSX did not immediately respond to a request for comment.
"Mr. Harrison's letter made a generic reference to 'people' at CSXT 'pushing back' against his plan to implement a precision scheduled railroad. Our members working at CSXT are highly skilled and trained professionals, and if Mr. Harrison's letter was intended to insinuate otherwise his comments are misguided," an official from the Brotherhood of Locomotive Engineers and Trainmen said in a statement.