Major U.S. rail customers to air complaints over CSX at hearing


Cargill Inc, Dow Chemical Co (NYSE:DOW) and other major corporate rail customers are expected to speak on Wednesday before the top U.S. rail regulator about their experiences with CSX Corp’s (NASDAQ:CSX) network, which has been dogged by service problems since the summer.

The eagerly awaited “listening session” before the U.S. Surface Transportation Board (STB) in Washington will be the first public forum for customers to air grievances and give CSX, the No. 3 U.S. railroad, the chance to defend its new operating strategy, which it says will improve its network.

The STB announced the public hearing in late August after customers complained of service issues, including longer transit times, unreliable switching operations, inefficient car routings, poor communications with CSX customer service.

CSX’s service disruptions have created logistical headaches for companies ranging from chemical and agricultural to automotive and steel producers whose supply chains, plants and distribution channels rely on CSX’s rail network across the eastern United States.

CSX’s chief executive, Hunter Harrison, appointed to the job amid investor fanfare in March, told Reuters in late September he would use the hearing to expound upon his vision for efficiency, which he calls “Precision Scheduled Railroading.”

Harrison is also likely to highlight operating improvements, such as rail cars spending less time sitting idle and train velocity hitting its best level since June.

The STB has been reviewing CSX’s performance weekly and talking to senior management for months.

While at least three companies have withdrawn requests to testify as service has improved, nine companies will deliver public remarks on Wednesday, including The Chemours Company (NYSE:CC), Kellogg Company (NYSE:K) and Murray Energy Corp, the largest private U.S. coal mining company.

An assortment of trade groups including automotive, grain, and paper lobbyists expected to speak on Wednesday have called on Congress to make it easier for shippers to file complaints and allow other operators to use CSX track during service disruptions.

Other stakeholders have filed comments with the STB.

Agriculture Secretary Sonny Perdue told the STB in a Sept. 12 letter that it should require CSX to provide performance data that is “wider in scope, more granular in detail, and fully explained.”

Toyota Motor Corp’s (NYSE:TM) Canadian unit told the STB it has “noted numerous positive outcomes from the CSX changes,” but highlighted misrouted rail cars as “one of the biggest challenges” it expects going forward.