Lost in the shuffle: Service between low-volume origin-destination pairs as well as certain shorter-haul direct interline moves made in conjunction with BNSF Railway and Union Pacific through Chicago.
The railroad informed customers today about numerous changes involving BNSF interchange, plus the pending end of service in about 75 low-volume lanes both on and off CSX.
The announcement comes a little more than a week after customers were informed of similar changes to interline intermodal service that CSX runs in conjunction with UP, including their joint UMAX domestic container program.
“We have been working closely with our interline partners, Union Pacific and BNSF, to streamline interchanges, especially for traffic routed through Chicago and the Southeast,” CSX Chief Marketing Officer Mark Wallace wrote in a letter to intermodal customers. “These changes, to take effect prior to peak season, will enable us to execute our service plan with greater reliability and speed during this important shipping period.”
The changes involving BNSF take effect in mid- to late-September, while the UP-related changes take effect in mid-September.
To reduce complexity and improve fluidity in Chicago, CSX is focusing domestic steel-wheel Chicago interchange with BNSF on five destinations in the East: Chambersburg, Pa.; North Kearny, N.J.; the Northwest Ohio Intermodal Terminal in North Baltimore, Ohio; Springfield, Mass.; and Syracuse, N.Y.
Those terminals will serve nearby markets via dray moves over the highway. Baltimore will be served via Chambersburg; Philadelphia via North Kearny; Cincinnati, Cleveland, and Columbus, Ohio, plus Detroit, via Northwest Ohio; Worcester, Mass., via Springfield; and Buffalo, N.Y., via Syracuse.
In some cases, the changes will reduce transit times. Service from West Coast points to New England will move a roughly a day faster, CSX says.
BNSF and CSX also will shift Southeast intermodal interchange to Memphis from Chicago. Traffic bound from BNSF to the Southeast, including Atlanta, Florida, and Charlotte, N.C., will shift to the Memphis gateway.
“Expanding our Memphis interchange to facilitate the offering of a more direct service product to Tennessee, Florida, Georgia and the Carolinas, removing a significant number of miles off the Chicago route and easing Chicago interchange congestion,” Wallace wrote. “The Memphis interchange also provides lower risk of winter weather disruption.”
On Aug. 3, Union Pacific notified its intermodal customers that CSX would be dropping steel-wheel Chicago interchange between a number of UP origins and CSX destinations. CSX and UP also will shift Southeast traffic to the Memphis gateway from Chicago and New Orleans.
While the sheer number of UMAX lanes being dropped is substantial, the volume moving in those lanes is not.
Of the 197 UP-CSX origin-destination pairs being discontinued, 67 saw no container movements in the past 12 months, CSX says. And the lanes being cancelled that did see traffic averaged just one container per week.
“Maintaining these status-quo service offerings would be detrimental to the majority of our customers and the East-West transcontinental network, particularly during fall peak,” Wallace wrote.
CSX says the vast majority of UMAX volume in cancelled steel-wheel interchange lanes can continue via crosstown trucks linking UP and CSX terminals.
But that might not happen for several reasons, says intermodal analyst Larry Gross.
First, drayage capacity is already extremely tight in Chicago, making it unlikely in the near term that shippers will be able to find a drayman to rubber-tire containers between terminals.
Second, rubber-tire transfers raise costs. There are lifts at each terminal, which run around $50 a piece, plus the cost of the dray move. The higher costs may not amount to much for a true transcontinental move from the West Coast to the East Coast. But they make it more likely that shipments moving to places in the Ohio Valley will simply stay on the highway once they are de-ramped at a UP terminal in Chicago.
Third, the rubber-tire interchange would add a day to transit time — meaning that shippers would effectively be paying more for slower service.
Gross expects that loads that aren’t diverted to Norfolk Southern will simply hit the highway instead.
All but 49 of the UMAX lanes being dropped have potential alternative routings via NS in the East, UP told its customers.
“We recognize that service changes can be inconvenient and untimely; however, the value of Union Pacific’s premium intermodal network is that we offer multiple intermodal routes and solutions,” UP said in its service advisory. “We sincerely appreciate your business, and we will work to address all service changes by developing optimal solutions to meet your transportation needs.”
Anthony Hatch, an independent analyst with ABH Consulting, says the intermodal changes follow the Precision Scheduled Railroading playbook, as similar changes were made to the intermodal networks at Canadian National and Canadian Pacific as CEO E. Hunter Harrison sought to boost profitability.
Hatch wondered if the CSX intermodal revamp will be a big opportunity for NS.
An NS representative did not respond to Trains News Wire email seeking comment on potential volume shifts from CSX to NS.
In July, CSX CEO Jim Foote said the railroad was analyzing its intermodal network with an eye toward boosting efficiency.
“Our intermodal network needs a ton of work in order to become the efficient part of our system that it needs to be and we’re just really beginning to get in there and start to figure out how to rationalize that big part of our business,” Foote said on the railroad’s quarterly earnings call.
Unlike last summer, when former CSX CEO Harrison made rapid and sweeping operational changes that created major service problems, CSX said it would take a go-slow approach to the intermodal redesign.
“We’re not going to do anything that’s going to screw up the railroad,” Foote says. “So if it takes a little longer than a quarter or two, I’m fine with that.”
Wallace tells customers today that CSX does not intend to make any additional changes to its intermodal network until the peak season is over.
No terminals will be closed as part of the streamlining, which also involves international intermodal traffic.
CSX will, however, shift Little Ferry, N.J., traffic to nearby North Bergen, N.J., in the wake of a New York, Susquehanna & Western bridge collapse.
Ah, all the experts, none of whom have profit responsibility for CSX intermodal.
This is simplistic Braden Kayganich, but imagine both BNSF and UP have 1 IM train per day into Chicago. Say 25% terminates Chicago, 25% steelwheel to NS, 25% steelwheel to CSX, and 25% rubbertire to whatever south or eastbound terminal for lower density lanes.
Then you’d have two short IM trackage rights trains to North Baltimore chewing up expensive CSX capacity. Doesn’t sound attractive to CSX without a big rights fee to the westerns, who would want to more than recoup that cost in their division of the west coast-Ohio line haul. And plus the CSX share for the rest of the eastern haul would be too short to pay.
#transcontinental-railroads.
CSX would be better off giving both BNSF and UP acces to North Baltimore for northeast traffic. Granting BNSF trackage rights from birmingham into ATL..
Lack of edit function bites again:
“WAS the Louisville lane cut as low volume AND LEFT FOR LONG DRAYS? That’d also make more sense over Memphis for auto parts headed to the Ford Truck plant there from the west coast or MEXICO. A lot of that (auto parts traffic for Louisville) took the longer “subtractive” dray from Chicago. Appliance manufacturing in Louisville too. Parts in, finished goods out in 53s.”
Landon Rowell beat me to my first thought: anything off the BNSF Transcon or the UP Sunset or Texas/Mexico bound for Nashville, Atlanta, Charlotte makes more sense over Memphis than Chicago. But Meridian is even better from a lower circuitous mileage perspective.
Lathrop-Memphis on UP is almost as much of a slow roll KC-Memphis as PNW-Memphis on BNSF south of Savanna. But all that traffic makes more sense over Chicago anyway with CSX getting the long haul to the southeast. BUT seemingly all the CSX steel wheel interchange over Chicago heads east to Ohio, PA, NY, Mass. And dray capacity in Chicago is a big problem that I’m not sure diverting some traffic over Memphis opens up enough of.
Not sure about Florida over Memphis though, I would think New Orleans would be a better gateway, but it’s an expensive to maintain line given the periodic post hurricane rebuilds and is not a particularly fast running line either.
Does the Louisville lane cut as low volume? That’d also make more sense over Memphis for auto parts headed to the Ford Truck plant there from the west coast or Memphis. A lot of that took the longer “subtractive” dray from Chicago too. Appliance manufacturing in Louisville too.
Additive dray to Detroit probably okay from North Baltimore. It’s 97 miles give or take which assembly plant and Toledo is even closer. Did CSX axe their end of the Laredo-Livernois (Detroit) Z train that was interchanged in Salem, IL with this announcement?
Not so much congestion on I-75 from
NB to Detroit so even with the ELD mandate it shouldn’t be as unfeasible as subtractive Cincinnati dray. 109 miles to Columbus probably in between (and less in an additive direction than Detroit but not as bad as Cincinnati. But I see why Cincinnati over Memphis might be a Bridge too far considering the pre-EHH transit times Memphis-North Baltimore. That was ludicrously slow. Maybe it’s better with directional running in place via the L&I back to CSX at Seymour, IN.
Longer drays in the congested northeast from Chambersburg, Syracuse, Kearny, Springfield are untenable and seemingly a great way to drive off business.
Per John Rice no benefit to the StL gateway? Is the KCS Schneider train to Columbus still running? Any possibility to consolidate other traffic bound for Indy or Columbus over StL? Avon-Cincinnati 126 dray miles mostly additive over STL. Avon-Louisville 129 dray miles less additive over StL. But I doubt CSX is interested in these short hauls, this is why we need transcontinental mergers.
Moving traffic between the southeast and southwest from Chicago to Memphis makes sense. Northwest-southeast traffic may or may not, depending on capacity.
May make some changes around her(?) SC Kansas/Sou T-Con. We see a couple of WB auto rack trains each week; they seem to stand out because they use some run thru power.[ BNSF leaders followed by either CSX or NS units running behind leader. ] The traffic around her comes from KC area (Gardner,Ks or Argentine)
These “New Changes” seems to indicate that CSX management has re-armed their Circular Firing Squad. One has to wonder WHAT they are thinking, and how they are interpreting their in-house data?
It seems like all CSX is doing is cutting service in order to lower costs. I know running a huge railroad like CSX is complicated but I would think growing revenue would be a good idea as well and CSX does not seem to be doing much of that.
Yet the Illinois sub sits there rusting away cut in two. The St Louis gateway can get them to Avon, Queensgate or the new yard at Hopkinsville for SE access.
I am scratching my head on this one. Would love to see the analytics behind this.
An excellent opportunity for NS to offer additional containers as theft targets in their Chicago yards, and make additional apologies to the thieves.
Some of those changes will drastically increase delivery costs, especially for those customers that require drop & pull…you can’t economically drop a container at a destination and come back 2 days later to pick up the empty with some of the mileage between the rail ramp and the customer, you end up paying double drayage costs. CSX is trying to tell us that Columbus, Cincinnati, Cleveland, OH and Detroit, MI aren’t big enough consumers to have volume of more than one container a week. I find that highly unlikely, oh well, more business for NS, and that’s a reason a lot of Intermodal Marketing companies and those OTR carriers that have intermodal divisions provide their own containers.
Just drive a stake through the memory of EHH and forget he ever lived in Jacksonville.
Dray cost are going to skyrocket in Chicago. Interchanging with BNSF in Memphis will be 2 days slower. CSX might believe on it’s end it’s good to avoid Chicago, but let get real traffic coming from the PNW off BNSF has no good route to Memphis. Plus, what’s the capacity on the ex-frisco? The announcement of UMAX service changes is already having an impact on shippers. So I beg to differ with CSX on container moves per week on certain lanes. Plus it’s already been stated that UP and NS’s EMP container pool doesn’t have enough container capacity to take on new volume….CSX couldn’t have picked a better time..