BALTIMORE — CSX plans to resume operations through the Howard Street Tunnel and over its hurricane-damaged Blue Ridge Subdivision ahead of schedule, CEO Joe Hinrichs said today.
Trains will begin running through the Howard Street Tunnel in Baltimore during the last week of September. The tunnel on CSX’s I-95 corridor has been closed since Feb. 1 for a long-awaited double-stack clearance project that was expected to take up to 10 months [see “CSX closes Howard Street Tunnel …,” Trains.com, Feb. 4, 2025].
“We’re going to beat the clock on that. We’re really excited about it. The team’s done a fabulous job,” Hinrichs told an investor conference today.
The hurricane-damaged Blue Ridge Sub — the former Clinchfield Railroad through rugged eastern Tennessee and western North Carolina — will reopen during the first week of October after completion of a massive $450 million rebuilding project.
CSX had previously said it expected to reopen the line late in the fourth quarter or early in the first quarter of next year. Nearly 60 miles of the route were wiped off the map due to flooding caused by Hurricane Helene last October.
The reopening of the tunnel and Blue Ridge Sub will enable CSX to avoid the $10 million monthly cost of detouring traffic around the closures. It will also make the railroad more resilient, Hinrichs says, because all four of its north-south routes will be open.
While the Howard Street Tunnel itself will be fully cleared for domestic double stack trains when it reopens, work remains on two overpasses in Baltimore. Once those are complete by the second quarter of 2026, CSX will be able to offer double-stack service in the I-95 corridor for the first time.
It also will be able to shift stack trains linking the Midwest and Baltimore to the direct route over the former Baltimore & Ohio main line via Pittsburgh rather than the current roundabout detour through New York state, New Jersey, and Philadelphia.
The line closures and detours exacerbated congestion that had been building on the railroad since hurricanes Milton and Helene struck the Southeast just 13 days apart last fall. Service suffered, particularly from February through April. But by May the railroad had bounced back.
The deterioration in CSX’s operating metrics and its financial performance prompted sharp criticism from activist investor Ancora Holdings in July. Last month the hedge fund called on the CSX board to replace Hinrichs as part of a management overhaul.
Ancora claimed that the railroad’s performance slipped under Hinrichs, who became CEO in September 2022. Prior to his tenure, Chadwick notes, CSX had a sub-60% operating ratio. Today CSX’s 64.1% operating ratio trails the other four publicly traded Class I railroads.
Without mentioning Ancora, Hinrichs today defended CSX’s performance.
“We’re having a very strong third quarter operationally,” he says. “Essentially, from the beginning of May on, our railroad’s running about as well as it ever has, and you can see it in the metrics.”
For the third quarter, train velocity, terminal dwell, trip plan compliance, and the number of cars online are all outperforming the railroad’s averages since 2021.
“This is really important because this is all happening before we open up … the big projects we’re working on,” Hinrichs says. “So it shows you the capability of our network, even without those relief valves.”
A number of factors contributed to a reduction of operating income from a 2022 peak of $5.95 billion, Hinrichs says. In 2022, CSX benefitted from high export coal revenue, fuel pricing, and unusually high intermodal storage revenue and real estate sales.
Today lower export coal volume and revenue, unfavorable diesel prices, and normal storage and real estate revenue have all contributed to a $1.2 billion decline in operating income over the 12 months ending June 30 compared to 2022, Hinrichs says. Also contributing: Costs related to congestion and detours.
“We should get back to stronger earnings when some of those things aren’t going against us on an annual basis,” Hinrichs says.
CSX also is banking on increased merchandise volume from a number of industrial development projects that are coming online next year and in 2027. The railroad also expects the Howard Street Tunnel project to divert up to 125,000 truckloads to intermodal annually.
Ahead of schedule. That’s the way it SHOULD work. And savings of $30-40 million MIGHT make Ancona shut up.
It would have been nice to see the reasons for the overpass work not being able to say up with the tunnel.
I hope they allowed enough clearance in the tunnel for future electrification on top of double stacks.
A pox upon Ancora and other financial idiots who know very little about overall railroad operations and think that the operating ratio is the only valid benchmark. I am not sure they care at all about customer service.
Not clear in the article: will CSX operate any stacks through the tunnel at all until spring? If so what if any detours will be eliminated? before that?
The seventh paragraph says CSX won’t be able to offer double stack service through Howard Street Tunnel until the two overpasses are completed.