Rail Regulator Tells CSX to Fix Service Problems

By Paul Ziobro Features Dow Jones Newswires

A freight railroad regulator called on CSX Corp. to address "serious issues" causing delays, congestion and other problems, the latest setback for the railway as it attempts to revamp its operations.

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The Surface Transportation Board on Thursday wrote to CSX's chief executive, Hunter Harrison, asking that the company set up weekly calls with it to discuss performance issues and how they are being resolved.

"We are very troubled by the apparent lack of communication with customers and urge your immediate attention to remedy this situation," the regulator's three board members wrote.

A CSX spokesman said the company will provide the information requested and "will respond fully and factually to the STB complaint."

The board said it escalated the problems to Mr. Harrison after receiving complaints from CSX customers about service deteriorating during the second quarter, when Mr. Harrison began making operational changes at the railroad. Those have included changing routes, closing yards that sort long trains and idling locomotives and railcars.

CSX said last week that the changes it is making will result in a faster, more reliable railroad network.

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According to the letter, however, shippers have complained of longer and unpredictable transit times, railcars sitting in yards for days at a time and "inconsistent and unreliable" operations since Mr. Harrison began implementing his changes.

Other shippers are speaking out too. Last week, coal company Murray Energy Corp. said in a letter to the board that problems at CSX have worsened since Mr. Harrison took the helm in March. "This situation has become absolutely intolerable and must be resolved immediately," Chairman Robert Murray said at the time. CSX, in response, said it disagreed with Murray Energy's statements.

On Thursday, another coal miner, Arch Coal Inc., said it too has had problems with CSX service. "Frankly, the problems have gotten worse in the last 10 days," Chief Operating Officer Paul Lang said on an earnings call. He said the service issues have started to affect coal shipments to the coast bound for export.

The changes at CSX have allowed the railway's main rival in the Eastern U.S. rail system, Norfolk Southern Corp., to pick up some business from CSX, Norfolk Southern executives said this week.

Write to Paul Ziobro at Paul.Ziobro@wsj.com

(END) Dow Jones Newswires

July 27, 2017 18:33 ET (22:33 GMT)