Lost in the shuffle: Service between low-volume origin-destination pairs as well as certain shorter-haul direct interline moves made in conjunction with BNSF Railway and Union Pacific through Chicago.
The railroad informed customers today about numerous changes involving BNSF interchange, plus the pending end of service in about 75 low-volume lanes both on and off CSX.
The announcement comes a little more than a week after customers were informed of similar changes to interline intermodal service that CSX runs in conjunction with UP, including their joint UMAX domestic container program.
“We have been working closely with our interline partners, Union Pacific and BNSF, to streamline interchanges, especially for traffic routed through Chicago and the Southeast,” CSX Chief Marketing Officer Mark Wallace wrote in a letter to intermodal customers. “These changes, to take effect prior to peak season, will enable us to execute our service plan with greater reliability and speed during this important shipping period.”
The changes involving BNSF take effect in mid- to late-September, while the UP-related changes take effect in mid-September.
To reduce complexity and improve fluidity in Chicago, CSX is focusing domestic steel-wheel Chicago interchange with BNSF on five destinations in the East: Chambersburg, Pa.; North Kearny, N.J.; the Northwest Ohio Intermodal Terminal in North Baltimore, Ohio; Springfield, Mass.; and Syracuse, N.Y.
Those terminals will serve nearby markets via dray moves over the highway. Baltimore will be served via Chambersburg; Philadelphia via North Kearny; Cincinnati, Cleveland, and Columbus, Ohio, plus Detroit, via Northwest Ohio; Worcester, Mass., via Springfield; and Buffalo, N.Y., via Syracuse.
In some cases, the changes will reduce transit times. Service from West Coast points to New England will move a roughly a day faster, CSX says.
BNSF and CSX also will shift Southeast intermodal interchange to Memphis from Chicago. Traffic bound from BNSF to the Southeast, including Atlanta, Florida, and Charlotte, N.C., will shift to the Memphis gateway.
“Expanding our Memphis interchange to facilitate the offering of a more direct service product to Tennessee, Florida, Georgia and the Carolinas, removing a significant number of miles off the Chicago route and easing Chicago interchange congestion,” Wallace wrote. “The Memphis interchange also provides lower risk of winter weather disruption.”
On Aug. 3, Union Pacific notified its intermodal customers that CSX would be dropping steel-wheel Chicago interchange between a number of UP origins and CSX destinations. CSX and UP also will shift Southeast traffic to the Memphis gateway from Chicago and New Orleans.
While the sheer number of UMAX lanes being dropped is substantial, the volume moving in those lanes is not.
Of the 197 UP-CSX origin-destination pairs being discontinued, 67 saw no container movements in the past 12 months, CSX says. And the lanes being cancelled that did see traffic averaged just one container per week.
“Maintaining these status-quo service offerings would be detrimental to the majority of our customers and the East-West transcontinental network, particularly during fall peak,” Wallace wrote.
CSX says the vast majority of UMAX volume in cancelled steel-wheel interchange lanes can continue via crosstown trucks linking UP and CSX terminals.
But that might not happen for several reasons, says intermodal analyst Larry Gross.
First, drayage capacity is already extremely tight in Chicago, making it unlikely in the near term that shippers will be able to find a drayman to rubber-tire containers between terminals.
Second, rubber-tire transfers raise costs. There are lifts at each terminal, which run around $50 a piece, plus the cost of the dray move. The higher costs may not amount to much for a true transcontinental move from the West Coast to the East Coast. But they make it more likely that shipments moving to places in the Ohio Valley will simply stay on the highway once they are de-ramped at a UP terminal in Chicago.
Third, the rubber-tire interchange would add a day to transit time — meaning that shippers would effectively be paying more for slower service.
Gross expects that loads that aren’t diverted to Norfolk Southern will simply hit the highway instead.
All but 49 of the UMAX lanes being dropped have potential alternative routings via NS in the East, UP told its customers.
“We recognize that service changes can be inconvenient and untimely; however, the value of Union Pacific’s premium intermodal network is that we offer multiple intermodal routes and solutions,” UP said in its service advisory. “We sincerely appreciate your business, and we will work to address all service changes by developing optimal solutions to meet your transportation needs.”
Anthony Hatch, an independent analyst with ABH Consulting, says the intermodal changes follow the Precision Scheduled Railroading playbook, as similar changes were made to the intermodal networks at Canadian National and Canadian Pacific as CEO E. Hunter Harrison sought to boost profitability.
Hatch wondered if the CSX intermodal revamp will be a big opportunity for NS.
An NS representative did not respond to Trains News Wire email seeking comment on potential volume shifts from CSX to NS.
In July, CSX CEO Jim Foote said the railroad was analyzing its intermodal network with an eye toward boosting efficiency.
“Our intermodal network needs a ton of work in order to become the efficient part of our system that it needs to be and we’re just really beginning to get in there and start to figure out how to rationalize that big part of our business,” Foote said on the railroad’s quarterly earnings call.
Unlike last summer, when former CSX CEO Harrison made rapid and sweeping operational changes that created major service problems, CSX said it would take a go-slow approach to the intermodal redesign.
“We’re not going to do anything that’s going to screw up the railroad,” Foote says. “So if it takes a little longer than a quarter or two, I’m fine with that.”
Wallace tells customers today that CSX does not intend to make any additional changes to its intermodal network until the peak season is over.
No terminals will be closed as part of the streamlining, which also involves international intermodal traffic.
CSX will, however, shift Little Ferry, N.J., traffic to nearby North Bergen, N.J., in the wake of a New York, Susquehanna & Western bridge collapse.
