“We are the leader in growing that business at about 2.5% so far this year,” Foote told an investor conference today.
Merchandise volume is down for the year to date at each of the other three big U.S. Class I systems, according to a review of their Association of American Railroads weekly carload reports.
CSX has begun to regain market share lost to trucks over the years, Foote contends.
Railroads typically may have only 60% of the business from a customer’s facility. The balance goes by truck because the shipper can’t rely on the railroad to deliver as promised, Foote says.
“What happens is your service gets to the point where the customer sees that it’s so much better, it becomes much more reliable, and you start to gain back market share in the business segments that the railroads lost over decades from being not a very good service provider,” he says.
That’s what’s happening now at CSX, he says.
Since CSX began Precision Scheduled Railroading under then-CEO E. Hunter Harrison in March 2017, average train speed is up more than 40% and terminal dwell is down more than 20%. And transit time is down by an average of two days.
Trip plan compliance has improved to the upper 70% range, Foote says. That’s up from around 60% when CSX launched trip plans in early 2018 that set to-the-minute schedules for every car moving on the system.
“CSX is arguably the best-running railroad in North America right now,” Loop Capital Markets analyst Rick Paterson told the North American Rail Shippers conference earlier this month. The railroad’s combined service metric, which includes both train speed and dwell, is currently 41% higher than its 10-year average.
Regaining merchandise market share is the biggest opportunity at CSX, where merchandise volume generates nearly two-thirds of the railroad’s revenue.
“That’s the heart of our franchise,” Foote says. “That’s where the majority of our customers are. And that’s where there are billions — billions — of dollars of opportunity for us to take off the highway.”
Merchandise traffic includes everything but intermodal and coal at CSX. Using the same yardstick, merchandise traffic is down 1.3% at Norfolk Southern and BNSF Railway and by 2.2% at Union Pacific through the week ending May 25.
Foote spoke at Bernstein’s 35th Annual Strategic Decisions Conference.
This isn’t news; it is a publicity hand out,
if only what he said was true