CSX Losing Freight To Trucking After Employee Pushback Causes Service Disruptions, According To CEO

Railroader CSX has apologized to its customers for significant disruptions in service caused by “employee push-back” to extreme money saving measures enacted by the company’s new CEO.

Nearly 70% Of CSX Shippers Have Turned To Trucking

Analysts say that 80% of CSX’s shippers have recently reported problems with service. Sixty-seven percent of CSX’s shippers have tapped truckers to pick up freight that they say the railroad hasn’t been able to manage. Forty percent of CSX’s shippers report that they’ve moved freight over to Norfolk Southern, according to reports.

Following a number of complaints from shippers, the Surface Transportation Board issued a warning to CSX, writing that “Shippers have reported that CSX’s customer service deteriorated markedly during the second quarter of 2017, which coincided with CSX’s implementation of significant changes … We understand that these disruptions have forced a number of rail shippers and their customers to curtail production, temporarily halt operations and/or utilise other transportation options that have added additional expense and inefficiencies to their operations.”

CEO Blames Employees For Service Disruption, Cuts Thousands Of Jobs

CSX CEO Hunter Harrison has blamed the service disruptions on his own employees. In a letter sent out to CSX customers, Harrison writes, “The pace of change at CSX has been extremely rapid, and while most people at the company have embraced the new plan, unfortunately, a few have pushed back and continue to do so. This resistance to change has resulted in some service disruptions. To those customers that have experienced such issues, we sincerely apologize.”

Harrison was brought in to turn CSX around in March, a move that has since been described by one shipper as a “complete disaster.” Harrison’s turnaround involved aggressive cost cutting measures, including 2300 layoffs and cutting the number of railcars by 900. Harrison has also warned that another 700 jobs could be cut in the future. These measures have resulted in longer trains and have some concerned about safety.