CSX taking steps to dig out of congestion

JACKSONVILLE, Fla. — In the weeks before the Feb. 1 closure of the Howard Street Tunnel in Baltimore, CSX was a railroad on a tightrope.

CSX had been struggling to recover from a string of harsh weather events that began during a devastating hurricane season and continued through winter.

Among them: The Jan. 21 storm that blanketed the Gulf Coast and Southeast in a rare snowfall. CSX’s busiest hump yard, Rice Yard in Waycross, Ga., received more than four inches of snow and shut down for an unprecedented three days. “We were effectively shut out of a 3,000-car-a-day hump,” Chief Operating Officer Mike Cory says.

A little more than a week later, CSX closed the Howard Street Tunnel on schedule to begin a six-to-eight-month clearance project. Another shot of winter followed in mid February, raking the system from Memphis and Chicago to Baltimore and Selkirk, N.Y., and further snarling operations. And now CSX has been pushed off the high wire by the strain of detouring traffic that used to roll through Howard Street on more than 16 trains per day.

By many measures the CSX network has slowed to levels not seen since the 2022 service crisis that was caused by widespread crew shortages, says Rick Paterson, a Loop Capital Markets analyst who closely follows railroad performance metrics.

“We’ve entered four-alarm territory at CSX as the — now clearly botched — reroutes around Baltimore’s Howard Street tunnel continues to throw up operating metrics we typically only see during full-blown meltdowns,” Paterson wrote in his weekly State of the Rails note to clients last week. “This week’s data, reflecting week ending March 21, was further impetus to lunge for the liquor cabinet.”

The big picture: Average train speed is down 6.8% this year, terminal dwell is up 10.4%, and both the number of cars online and the number of trains holding for crews are on the rise.

In addition to the Howard Street Tunnel reroutes, CSX continues to detour traffic around its Blue Ridge Subdivision, the former Clinchfield main in rugged eastern Tennessee and western North Carolina. Hurricane Helene essentially wiped nearly 60 miles of the railroad off the map in September. The entire route is not expected to reopen until this fall.

The Blue Ridge Sub carried five to seven trains per day and is not a major main line. But it did serve as a relief valve that can ease congestion on CSX’s primary Midwest-Florida routes, Cory says.

Between Howard Street and the Blue Ridge Sub, CSX is detouring around 12% of its overall daily road freights. The railroad has to absorb 10 million out-of-route miles per month, Cory says.

Meanwhile, train crew attendance has dipped as engineers and conductors take advantage of their expanded sick-time benefits.

As congestion has built in CSX’s major yards, the railroad has been forced to hold trains out. Earlier this month, for example, CSX was holding 11 Waycross-bound trains as far away as Richmond, Va., Florence, S.C., Rocky Mount, N.C., and Savannah, Ga.

CSX is taking several steps to dig out, Cory says.

First, it’s adding 50 or so locomotives through a combination of pulling Dash 8 and 9 units from storage and taking delivery of modernized locomotives from Wabtec. The units will be sent to terminals in the Midwest, which are far from major shops and become short of power when inbound trains arrive late.

Second, CSX has set up a command center in Jacksonville and is sending senior operations people into key terminals to improve crew and locomotive utilization.

Finally, in a longer-term step, CSX is making investments this year to boost throughput at its hump yards in Avon, Ind., and Cincinnati, as well as in its former hump yard at Willard, Ohio. In Avon, the hump lead is being extended to 9,000 feet. At Queensgate in Cincinnati, the pulldown yard is receiving power switches.

One thing that’s not on Cory’s to-do list: Limiting the number of cars that merchandise customers can put into the network as transit times have gone up due to congestion and running trains on longer detour routes. “I’m not putting out embargoes,” he says.

“We are in no position to tell customers about their pipeline,” Cory says.

The railroad has received few complaints from merchandise customers, and shippers did not raise issues with CSX’s service during a recent round of shipper conferences. Intermodal service has remained consistent and reliable, Cory says.

Cory says operations were on the upswing last week. “​​These last four days we’ve seen daylight,” he says. “We’re getting more cadence, we’re cleaning up old traffic, old trains.”

But don’t expect overnight improvement. “We’re going to grind through it,” Cory says. “​​But let me tell you, until we get the Blue Ridge and Howard Street … back, it’s going to be a grind.”

Union Pacific went through similar operational struggles in 2021 after a wildfire heavily damaged its Dry Canyon Bridge in Hotlum, Calif., on the railroad’s Interstate 5 Corridor. The bridge was out of service for a month, forcing UP to detour and hold traffic while repairs were under way. Trains operating between Portland, Ore., and California detoured via Salt Lake City, adding five days or so to the normal two to two-and-a-half day transit time.

“Why are the reroutes proving so difficult? It’s harder than it looks because — more than any other transportation network due to dedicated right-of-way — a Class I railroad is just one big collection of domino effects,” Paterson wrote. “Everything impacts everything else. So when you change the natural flows in the system during a significant reroute like this, you need to be extremely careful with regard to properly forecasting and (over)resourcing every crew district, yard, and terminal on the route that will come under pressure. CSX clearly hasn’t done this adequately.”