Surface Transportation Board getting involved with the CSX/ Hunter Harrison Fiasco

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Surface Transportation Board getting involved with the CSX/ Hunter Harrison Fiasco
Posted by jsanchez on Friday, July 28, 2017 1:14 AM

I just received and read this notice from the Federal Government issued to CSX, things are really getting bad, reality is catching up with Hunter's wacked out management of CSX.

https://www.stb.gov/__85256593004F576F.nsf/0/69B0E40C8E0156FD8525816A006977D6?OpenDocument

James Sanchez

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Posted by jsanchez on Friday, July 28, 2017 1:32 AM

This is a copy of the letter sent to Mr. Hunter. Time to reopen some foolishly closed Hump Yards!

https://www.stb.gov/stb/docs/NonDocumentedPublic_Correspondence/2017/STB%20to%20CSX%20Harrison%20July%202017.pdf

 

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Posted by overall on Friday, July 28, 2017 6:48 AM

Does anybody know what the next step is? Can the STB step in and force reversal of some of the changes?

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Posted by Shadow the Cats owner on Friday, July 28, 2017 7:02 AM

There is a huge difference between the STB and what he had to deal with in Canada.  Here in the states they will if needed start fining his butt millions of dollars and if needed order him to stop implementing his plans to improve customer service.  Why can they do that simple they are empowered to do so by act of Congress.  EHH is going to find out that the government here still has teeth and will bite hard or at least the BOD of CSX is going to in one hell of a hurry.

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Posted by CandOforprogress2 on Friday, July 28, 2017 11:46 AM

Sounds like railroad custumer serivice has gone from bad to worse

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Posted by Norm48327 on Friday, July 28, 2017 12:03 PM

Shadow the Cats owner

There is a huge difference between the STB and what he had to deal with in Canada.  Here in the states they will if needed start fining his butt millions of dollars and if needed order him to stop implementing his plans to improve customer service.  Why can they do that simple they are empowered to do so by act of Congress.  EHH is going to find out that the government here still has teeth and will bite hard or at least the BOD of CSX is going to in one hell of a hurry.

I am of the opinion Harrison has finally met his match and he will be CEO for a very short time. In addition to his health being of concern, the STB stepping in this early in his tenure speaks volumes. I believe he made changes too quickly without giving each change time for lower level management to accomodate those changes. He used an axe when a scalpel would have been more in order. Surgically removing unnecessary operations one at a time would have been more in order but he chose to do all at once and left CSX in total chaos.

I doubt his actions have truly benefitted CSX stockholders, but given the board's decision, with stockholder approval, to approve his demand for $84,000,000 I'm sure he will be paid that. Look at the ridiculous salaries the CEO's of corporations like Sears got paid only to shepherd the company into bankruptcy.

The STB needs to come down very hard on Harrison. He is not making CSX better. He is raping the company for the benefit of a hedge fund and his own greed.

Norm


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Posted by mudchicken on Friday, July 28, 2017 12:31 PM

overall

Does anybody know what the next step is? Can the STB step in and force reversal of some of the changes?

 

Directed Service Order - rarely carried out in this type of scenario and the cure may be worse than the ailment.(especially with a downsized STB and very few practical railroaders and attorneys in the mix.) ....these things usually only appear after a bankruptcy and at a much smaller scale...

STB's purpose is to preserve and protect interstate commerce/service, not to be a management guru or price fixer. Ombudsman's dilema in the offing? (and hopefully some of the Wall Street Trash bullies get a bloody nose, egoes deflated and an overdue wake-up call)

Mudchicken Nothing is worth taking the risk of losing a life over. Come home tonight in the same condition that you left home this morning in. Safety begins with ME.... cinscocom-west
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Posted by Ulrich on Friday, July 28, 2017 12:43 PM

CSX is a private business.. if you're not happy with the service then go elsewhere.. that's how competition works. 

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Posted by jsanchez on Friday, July 28, 2017 12:46 PM

I fully agree, if you have not read it yet, check out Railway Age's editorial, "What is going on at CSX?" It list many of the crazy moves Hunter is making, I agree with what you said a scapel was needed not an axe. CSX was still very profitable before Harrison's arrival, it main weaknesses were customer service, directionless management and slow transit times.

James Sanchez

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Posted by jsanchez on Friday, July 28, 2017 12:47 PM

Trust me the customers are leaving in droves when they can!

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Posted by rdamon on Friday, July 28, 2017 1:27 PM

I wonder if Mr. Buffett is looking to expand his 1:1 layout?

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Posted by blue streak 1 on Friday, July 28, 2017 1:34 PM

Directed service order probably wild but to NS, UP, or BNSF still bad. Moorman ?    But what if SEC suspends trading in CSX stock ?  Now that could be a big put down ?  Don't own CSX stock but 2 who did have bailed in the last week.

EDIT:  One item missed in the debate is that the power companies need to use their Coal fired plants until the investment in them has been fully depreciated.  As understood some plants cannot be converted to natural gas economically ?  Best case is those generating plants that can use either coal or gas at flick of switches. 

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Posted by BaltACD on Friday, July 28, 2017 1:52 PM

jsanchez
CSX was still very profitable before Harrison's arrival, it main weaknesses were customer service, directionless management and slow transit times.

EHH has ramped up the weakness in Customer Service, has reinforced the directionlessness of management and slowed transit times to the point of gridlock, increasing total cars on line and their resultant increase in per diem payments to the car's owners.

CSX will have a large hill to climb after Mantle Ridge and EHH's oxygen tank runs out.

Never too old to have a happy childhood!

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Posted by jsanchez on Friday, July 28, 2017 2:20 PM
Very true!

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Posted by Shadow the Cats owner on Friday, July 28, 2017 3:50 PM

Take this for what you will my boss has heard thru several of the other carriers in the area that UPS is offering massive rates starting Monday for loads going to the NE.  The requirements are Double Endorsement Haz-mat and UPS is paying all tolls for the carriers.  We are guessing that UPS is tired of CSX and their BS and is going to pull their loads going to Upstate NY Boston and the Northeast from CSX entirely.  A tidal wave of customers leaving is about to hammer CSX and it is not going to be pretty.

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Posted by Euclid on Friday, July 28, 2017 6:04 PM

If Harrison is the one man wrecking ball that everyone says, why doesn’t anybody stop him? 

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Posted by BaltACD on Friday, July 28, 2017 6:08 PM

Euclid
If Harrison is the one man wrecking ball that everyone says, why doesn’t anybody stop him? 

Investors know nothing about operating a railroad.  They believe the BS that Mantle Ridge fed them to give EHH the $84M 'signing bonus' and Lord only knows what BS Mantle Ridge is snowing them with at present to keep them from coming in contact with reality and rioting.

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Posted by BC2 on Friday, July 28, 2017 6:18 PM

Euclid

If Harrison is the one man wrecking ball that everyone says, why doesn’t anybody stop him? 

 

 

Money talks. All he needs to do is cost the investors money and he will be gone in no time. The market already didn't react well to the conference call. I'm sure the STB sticking their nose in the business is another cause for concern.

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Posted by Euclid on Saturday, July 29, 2017 9:22 AM

BC2
 
Euclid

If Harrison is the one man wrecking ball that everyone says, why doesn’t anybody stop him? 

 

 

 

 

Money talks. All he needs to do is cost the investors money and he will be gone in no time. The market already didn't react well to the conference call. I'm sure the STB sticking their nose in the business is another cause for concern.

 

So is this just a big conspiracy to have EHH kill off the company for the immediate, one-time gain of the investors?  Or are you saying that it is the investors who are the ones that will stop EHH if he keeps on harming performance?

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Posted by BaltACD on Saturday, July 29, 2017 9:42 AM

Euclid
 
BC2
 
Euclid

If Harrison is the one man wrecking ball that everyone says, why doesn’t anybody stop him?  

Money talks. All he needs to do is cost the investors money and he will be gone in no time. The market already didn't react well to the conference call. I'm sure the STB sticking their nose in the business is another cause for concern. 

So is this just a big conspiracy to have EHH kill off the company for the immediate, one-time gain of the investors?  Or are you saying that it is the investors who are the ones that will stop EHH if he keeps on harming performance? 

It is the institutional investors believing the smoke that the hedge fund Mantle Ridge blew up their posteriors and installing Mantle Ridge's 'anoited one' EHH to be CEO.  2nd Quarter financials cooked the books (within generally accepted accounting principles [which have a lot of wiggle room]) to show financial benefits without reference to the reality of what was taking place on the railroad itself.  

Reality is starting to bite - in a big way.

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Posted by Paul of Covington on Saturday, July 29, 2017 9:51 AM

Euclid
So is this just a big conspiracy to have EHH kill off the company for the immediate, one-time gain of the investors?

   Nobody said it was a conspiracy to kill off the company.   The investors don't care one way or the other what's left of the company.   Does a mugger care about the condition of the muggee after the mugging?

_____________

   My mind's made up.   Don't confuse me with the facts.

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Posted by Paul_D_North_Jr on Saturday, July 29, 2017 10:30 AM

Thus reminds me of the STB's response to the horrific service meltdown which occurred when the SP was merged into UP, and when CR was split up and merged into NS and - oh, yeah, CSX (plus a few lesser ones).

DSO is issued only when operations are so screwed up that even government intervention can't make it any worse, but only improve it. 

- PDN. 

"This Fascinating Railroad Business" (title of 1943 book by Robert Selph Henry of the AAR)
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Posted by Paul_D_North_Jr on Saturday, July 29, 2017 10:41 AM

This Motley Fool report says EHH may be gone in 6 months ?!? 

"O'Reilly: This is the guy that's supposedly going to be going in six months.

"Muckerman: . . . So, a little heartfelt nod to the industry, but he's not going to be there when that last railcar likely ships, as he did say he's more of a placeholder CEO. He's really like a vagabond that jumps from train to train, making his way across North America. . . . "

https://www.fool.com/investing/2017/07/26/csx-rail-down-5-on-shocking-conference-call.aspx  

- PDN.

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Posted by Paul_D_North_Jr on Saturday, July 29, 2017 10:59 AM

Go look at the Railroad Performance Measures webpage for CSX:

http://www.railroadpm.org/home/RPM/Performance%20Reports/CSX.aspx 

Without breaking out the calculator, here's what I see: 

Total Cars On-Line up about 4% in the last month, and from 3Q16. 

Train Speed down across the board, except Grain Unit - and Multilevel no longer reported.  For All Trains, from 20.8 MPH in 3Q16 and 21.5 in June steadily down to 19.2 MPH for the w/e 7/21.  From 3Q16, that's an 8% decrease in speed. 

Terminal Dwell for Entire Railroad up from 25.7 hrs. in 3Q16 to 28.0 last week = up about 9%.  

All this may look like "Precision Scheduled Railroading" to EHH, but not to me.  These metrics are all headed in the wrong direction, by significant amounts, and for several weeks in a row.  The 3Q results will be telling, but best compared year-over-year since there are 2 holiday weeks in the 3Q, but only 1 in the 2Q. 

- PDN. 

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Posted by Deggesty on Saturday, July 29, 2017 1:26 PM

I would be interesing in knowing just what Mr. Harrison means when he speaks of "Precision Scheduled Railroading." Precision Scheduled Slowdown? Precision Scheduled How to Drive Customers Away?

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Posted by blue streak 1 on Saturday, July 29, 2017 1:44 PM

Deggesty

I would be interesing in knowing just what Mr. Harrison means when he speaks of "Precision Scheduled Railroading." Precision Scheduled Slowdown? Precision Scheduled How to Drive Customers Away? 

The precision RR here has had something here never seen before.  An eastbound BNSF intermodal haulage train has been stopped here, split to free open road crossing in what appears to be CSX crew off duty due to HOS.  These CSX crews for all BNSF haulage trains are all BHM bassed.  This train has JB HUNT containers  +  FED EX and UPS containers and trailers.  No wonder UPS is upset ?

Train stopped about 1130

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Posted by Deggesty on Saturday, July 29, 2017 2:29 PM

About how much more time did the crews need to get in to the terminal? I wonder if they were called out on short rest--or is there such a thing now?

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Posted by BaltACD on Saturday, July 29, 2017 3:51 PM

Deggesty
About how much more time did the crews need to get in to the terminal? I wonder if they were called out on short rest--or is there such a thing now?

Brirmingham to Fariburn Ramp - with normal traffic levels is about a 9 hour run - 'short rest' in today's world is normally a Deadhead and Turn run.  Called for a 2 to 3 hour Deadhead to the trains origin and then the balance of the 9 to 10 hours that are left to work the train back to the original on duty point.  

The only kind of 'short rest' situation (outside of passenger runs) is where a crew working a train into their Away From Home Terminal is instructed to take 4 or more hours (a specified show up time can be communicated) rest and then go back on duty to take a train back to their home terminal.  This is only done on runs where the over the road time is normally 5 hours or less.  If the inbound crew is on duty more than 6 hours they will normally not be instructed to take the 4 hour rest provisions of the HOS Law.  

As CSX implemented the HOS Law's provisions, if a crew has 'marked off' Crew Management CAN NOT CONTACT them until 10 Hours from their mark off time, in fact no one from CSX can initiate contact with crew members that are in the first 10 hours after their mark off (Home or Away).  Crew members themselves can contact the company at any time.

The only acceptable excuse to contact a crew after they have marked off and before 10 hours have elapsed is that the crew 'went home with the railroad'.  The crew never released track occupancy authority they held back to the Train Dispatcher.

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Posted by Deggesty on Saturday, July 29, 2017 4:55 PM

Thanks, Balt. My only experience with a crew called out on short rest came when I took the Wabash Cannon Ball from Detroit to St. Louis in the spring of 1970. They had come  the night before, and had to be called out on short rest (nobody else was available). There was no problem until we were held up by a freight that had  broken in two--and while the train was being put back together, apparently a helpful soul passing by closed an anglecock--and the train crew had to walk the train to find the problem. 

Along with that and having to wait for the dogcatcher, I missed my connection with the Panama in St. Louis and had to go down to New Orleans the next day on the City. That was an adventure in itself because all three of the engines on the City had electrical problems. An electrician boarded in Fulton, but could not keep the engines running, so one freight engine was put on in Dyersburg, and we arrived New Orleans almost seven hours late. I got off at Carrollton Avenue, and did catch the Southern Crescent to get up to Tuscaloosa (I already had my ticket and my Pullman seat).

Johnny

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Posted by BaltACD on Saturday, July 29, 2017 6:16 PM

Deggesty
Thanks, Balt. My only experience with a crew called out on short rest came when I took the Wabash Cannon Ball from Detroit to St. Louis in the spring of 1970. They had come  the night before, and had to be called out on short rest (nobody else was available). There was no problem until we were held up by a freight that had  broken in two--and while the train was being put back together, apparently a helpful soul passing by closed an anglecock--and the train crew had to walk the train to find the problem. 

Along with that and having to wait for the dogcatcher, I missed my connection with the Panama in St. Louis and had to go down to New Orleans the next day on the City. That was an adventure in itself because all three of the engines on the City had electrical problems. An electrician boarded in Fulton, but could not keep the engines running, so one freight engine was put on in Dyersburg, and we arrived New Orleans almost seven hours late. I got off at Carrollton Avenue, and did catch the Southern Crescent to get up to Tuscaloosa (I already had my ticket and my Pullman seat).

1970 was in the days of the 16 Hour, HOS Law, which permitted a 2 hour or more rest break within the 16 hours to extend the 'law time'.  After 8 hours rest a crew was fully rested - at one point in time, resting on the train's own caboose was 'acceptable lodging' (well before my time).

ie. Called 0001 - HOS 1601, however if crew was given a 2 or more hour 'respite' the HOS time got extended by the amount of time in 'respite status' 1801 or later as dictated by the lenght of the respite.  

Never too old to have a happy childhood!

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