CSX: We Ask, How’s It Going to Work?

03.June, Worcester MA – A prominent CSX spokesperson provided responses to five ANRP questions submitted last month, and one asked last week. This dialogue will continue as the Pan Am acquisition process progresses.

ANRP has been working to understand and report on how today’s CSX would conduct itself as New England’s dominant carrier. Specifically, we want to know how will a realized-PSR railroad, devoted to scheduled long-haul movements, orient within a low-density, short-haul “island” that prioritizes passenger service.

Addressing this apparent contradiction amid the “can’t address that right now” atmosphere of a significant, (long-) pending transaction, is challenging for us and CSX, both. In order to at least start chipping away at it, a prominent CSX spokesperson has provided answers to some key initial questions. ANRP presents them as a starting point for an on-going written dialogue seeking to progress toward meaningful and agreeable insight into how this regional transformation will unfold.

Response to STB’s Second Decision

First, here is the separate response to ANRP’s statement query following the STB’s 26.June Decision to rule CSX’s revised Application “incomplete” (emphasis added by Editor to tease out notable threads):

CSX: CSX was asked to provide additional information to support our application which remains under consideration by the STB. As indicated in the [28.May response] Letter, we will refile by July 1st {STB #302427}. CSX commits to maintaining or improving existing service on Pan Am both as to customers and passenger service.  We are confident that the pro-competitive acquisition of Pan Am will bring significant benefits to stakeholders in the Northeastern United States and beyond and look forward to presenting further detail illustrating those benefits.

Dialogue on the issues

The query that resulted in the responses below was intimated by ANRP on 26.April. We appreciate the efforts by CSX staff to address these issues, and look forward to continued dialogue reflecting progress toward the transaction’s consummation (emphasis added by Editor to tease out notable threads).

ANRP: In the last 15 years, Pan-Am has grown traffic, thanks to an effective sales and marketing team that knows the territory and identified unconventional opportunities. Will CSX have a deliberate strategy and team to continue [PAR’s] efforts? Will any of the existing team be retained?

CSX: [We welcome] Pan Am’s talented workforce and will make staffing decisions with careful consideration for people and Pan Am’s operations. CSX has also been reaching out to union representatives of Pan Am and CSX to begin discussions on employee impacts of the acquisition. 

 

ANRP: This acquisition will expand CSX’s footprint allowing us to offer single-carrier service from Maine and eastern Canada into the United States, providing greater access to the northeast ports and offering customers a more consistent service product to handle incremental volume growth. 

CSX: The next phase of CSX’s transformation focuses on capturing the full value of our improved service by generating profitable and sustainable growth. With continued investments in rail assets, accident prevention, environmental technology, fuel efficiency, and more, we continue to look for opportunities to better serve our customers, employees and communities we serve; and to make rail the sustainable transportation mode of choice.

Our Sales, Marketing, and Customer Engagement teams all partner closely with our Operations team to ensure an excellent customer experience. Both the Sales and Marketing teams are aligned around commodities and end-market segments, all designed to support out-sized market growth. By partnering with customers to design innovative supply chain solutions and providing new services, CSX is generating opportunities that enable growth and innovation across our network and beyond.

 

ANRP: Since it will now have a long-ish haul, will CSX actively pursue traditional freight traffic between New York and Maine — such as paper and potatoes — that had long ago been lost to truck (e.g., paper, potatoes)?

CSX: [We] will pursue all opportunities that will benefit the company, our customers and consumers. Looking ahead, we are ready to embark on the next phase of sustainable growth by making CSX rail the ground transportation mode of choice. By providing best-in-class service and unprecedented reliability to our customers, we are looking to convert freight from the highway to rail while significantly reducing carbon emissions.

 

ANRP: Does CSX see additional intermodal opportunities in Pan-Am territory?

CSX: Again, we will consider all opportunities that will generate growth. While the efficiencies that will result from CSX’s new single-line service will benefit all customers, CSX will improve service performance and achieve higher velocity, faster equipment turns and greater consistency. 

 

ANRP: CSX’s passenger route agreement with the State of Virginia represents success for passenger cooperation, while similar initiatives in New York State do not. What are the comparative lessons from how those regions have interacted with CSX?  Should New England states be concerned that new service objectives will be stonewalled?

CSX: [Our] industry-leading operating model benefits passenger carriers as well as shippers. CSX commits to maintain or improve existing passenger service across the Pan Am system. We have collaborative relationships with all states across our network. CSX’s Amtrak performance levels have hit recent historic highs. In 2020, CSX achieved a 93.6% contract on time performance (OTP) vs. 92.4% in 2019. 

[We look] forward to our continued partnerships with state officials and our commuter and passenger authorities across our network, to identify mutually beneficial solutions to challenges which will benefit commuters as well as our valued freight customers in the future.

 

ANRP: How can states encourage a fair, honest, and productive conversation with CSX? What are the key understandings and relationships that are the foundation of the Virginia deal?

CSX: [We have] been in constant contact with government partners ahead of and throughout the [PAR] transaction process to establish and improve upon relationships, maintain an open dialogue and to proactively educate our partners. The acquisition reflects CSX’s interest in leveraging our best-in-class service and safety performance to improve rail’s competitiveness with other transportation modes operating in New England. This transaction is currently being considered by the STB and has garnered tremendous support – nearly 80 New England officials and businesses have written support letters to the STB.

Our recent transaction with the Commonwealth of Virginia is a great example which demonstrates our ability to find creative ways to generate meaningful value from our assets while enhancing the safety and efficiency of passenger and freight rail service in a vital transportation corridor.