A primer in disrespect from CSX

In my business experience, respecting the customers and communities you serve has always been seen as good advice. In fact, most public corporations adhere to it as a maxim to be weighed heavily when deciding how to respond to the politically sensitive accusations that seem to fly these days like tree pollen in the spring.

That’s why it’s hard to believe that CSX Transportation and E. Hunter Harrison have so thoroughly disrespected the City of Baltimore in the matter of the Howard Street Tunnel under the city. As a part of Mr. Harrison’s patented (almost) precision scheduled railroading, CSX purports to have evaluated all pending projects for benefit versus cost to the railroad, and decided that the tunnel just wasn’t going to make the cut.

Baltimore has a seaport, and the city would like the railroad to be able to pull double-stack trains out of the port. CSX says it doesn’t need to pull double-stacks to make its schedules for container freight work under the new plan. I say bull hockey. This is a perfect example of disregarding a community for just one motive: Profit.

A little history is in order.

The Howard Street Tunnel is aging or aged, like much infrastructure today. It needs to be replaced or refurbished. The city worked long and hard and spent, according to the city, “countless hours and energy” working with CSX to establish a plan and find funding that went considerably beyond the money that had been thought to be committed by CSX. This was before Harrison took over.

Harrison doesn’t really work for the railroad. He works for the investors that own the railroad, and, in my opinion, he doesn’t seem to give a damn about people. This is evident in the way he has implemented the sometimes wrongly-named precision railroading operating plan. He also has no compunction about scrapping infrastructure that has served the railroad well as long as the net result is improvement in the railroad’s operating ratio. This is the fraction created by dividing the railroad’s fixed and variable costs of running the railroad by the revenues generated by that operation. The lower the operating ratio, the better, allegedly, the railroad is doing.

It doesn’t really, but that’s the theory. In fact, to get to the storied “below 60 percent” operating ratio, you have to piss off a lot of people, most notably shippers and railroad employees. Now that seems to include the communities you serve as well.

Some of the proof of what I’m saying surfaced last week. First, it has become a hot topic that CSX dispatchers, who were scattered in several dispatching centers around the country, were notified that their jobs were being moved to Jacksonville, FL, where CSX (read Harrison) wants to consolidate dispatching into one center. Many, if not most, dispatchers sold houses, moved their families, and had their kids switch schools at the beginning of the fall semesters so they didn’t miss anything. Then, along came CSX and decided that the moves would be delayed indefinitely, leaving those who were diligent holding the bag, living in their cars, and yet being thrown off CSX property if they tried to overnight at their place of work.

Also, just before the Thanksgiving holiday, it was reported by several business news journals that CSX has put several big shippers on notice of new or increased fees in 2018. What form these will take, or how well the shippers will be able to incorporate them into their cost structures, is yet to be determined. Along with this announcement was another that some shippers will see reduced frequency of delivery, thirty to fifty percent reduced.

What it sounds like is this: Harrison will change direction in 2018. Not only will he disrespect shippers by refusing to build projects and run schedules that will serve them, but he’s going to also charge them for the privilege. Not only will he disrespect employees, but he will also keep them in limbo long enough for them to get tired and walk away. Not only will he do all this, but he will also tell the communities served by CSX to like it or lump it. I’m guessing the operating ratio is going to look mighty fine in 2018.

©2017 – C. A. Turek – mistertrains@gmail.com

(Charles A. Turek is a writer and novelist based in Albuquerque, NM. After four decades working in areas of the insurance industry related to transportation, he now writes on all aspects of American railroading. Charles is a political conservative but believes in public funding of passenger rail as a part of the federal government’s constitutionally conservative obligation to provide for defense and public infrastructure so that private enterprise may flourish.)