Why CSX’s shortline meeting sets the standard

A special guest post from Roy Blanchard, Trains magazine short line correspondent

CSX wrapped up its 21st Annual Shortline Meeting in Jacksonville on Tuesday. I’ve been to most of them, and every year they get better. It is, after all, the longest running show if its kind, and features a number of industry firsts. To begin, CSX was the first Class I road to establish a short line caucus group, a rotating panel of shortline leaders to gather up membership concerns and take them up with CSX managers.

The trade show, where the various commodity and service groups set up tables to show what they do and interact with short lines, is another CSX first, and it gets bigger every year. This year there were 44 booths from aggregates to waste marketing plus tables for e-business, fleet management, law, new business development, service start-up and integration, and several others. The show ran for 2 and a half hours Monday afternoon and was well attended. Finally, CSX was the first to offer consecutive breakout sessions by commodity with individual short lines to present their own success stories in these mini-groups.

Len Kellermann, CSX’s director for shortline and regional railroad development, opened the program with some impressive data about short lines themselves and how they relate to the CSX story. More than a quarter of all the revenue non-intermodal moves on CSX touches a non-Class I at some point between origin-destination pairs. Non-Class I interline volumes are north of 800,000 units a year, generating annual revenues $1.4 billion. Total 2009 revenue unit volume, with its 240 non-Class I connections, dropped 16 percent year-over-year vs. down 15 percent for CSX all-in and down 18 percent non-intermodal, a number more closely aligned with where the short lines live.  

Something else CSX does exceedingly well is to bring shortline aspects into every senior management presentation. I wish the other Class Is would follow suit and avoid the “30,000-foot view” perception so often voiced elsewhere. It was gratifying to hear, for example, Chief Transportation Officer Cindy Sanborn talk about local accountability for making shortline interchanges work the way they’re supposed to. Vice President of Service Design Alan Blumenfeld got everybody’s attention when he said he was “bullish on the carload business.”

Chief Financial Officer Oscar Munoz talked about his experience dealing with Warren Buffett at Coca-Cola Co. and how the Buffett’s business approach is likely to shape BNSF going forward, and may have wider effects on the railroad industry as a whole. Chief Commercial Officer Clarence Gooden kept everybody glued to their seats in his pre-lunch talk about the economy’s effect on railroad operations, the outlook for coal, how demand is driving more transportation than simple inventory replacement, and reminded us that 70 percent of members of congress have at least one short line in their districts.

As noted above, the commodity group breakout sessions were particularly effective in bringing out benefits of the CSX-shortline relationship. In agriculture, for example, it was noted that 26 of 40 unit train grain loading sites (90 car unit train operations) are on short lines and most have good enough track to take CSX six-axle power on run-through trains. Asked about cycle times, the presenter said they get two turns a month, and they expect unit trains to be on and off short lines within 24 hours.

Ethanol is another key play with shortline destinations in several states; Greenville & Western president Steven Hawkins gave a great presentation on how he perceived an ethanol need three years ago and has recently opened a new terminal, entirely self-funded.

It’s programs like these that continually get rave reviews and thus attract shortline owners and operators, 215 at this outing, excluding spouses, of which there were many. All totaled, approximately 60 percent of CSX’s 240 shortline partners attended the meeting. Moreover, the number of CSX staffers attending in support of the program, the trade show and the breakout sessions added another hundred-plus to the number of people swirling around the halls.