Thursday, August 17, 2017

CSX, customers and STB: The letters keep flying

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E. Hunter Harrison E. Hunter Harrison Courtesy Reuters

According to numerous observers, CSX service continues to deteriorate, threatening to affect other railroads and, by extension, the economy. Some customers have taken to giving rail traffic to competitor Norfolk Southern. Others, without any other rail options, have moved over to trucks. And some have petitioned the Surface Transportation Board and the House and Senate committees with responsibility for rail transportation to get involved. Letters from all sides have been circulating on Capitol Hill.

CSX responded to a large number of rail shipper associations on Aug. 16 with a strongly worded letter from President and CEO E. Hunter Harrison to the Rail Customer Coalition, which is comprised of 44 independent associations representing chemical and agricultural companies, steel and motor vehicle manufacturers, and beer producers and importers, among others. Harrison’s letter, directed to American Chemistry Council President and CEO Cal Dooley, was in response to the RCC’s Aug. 14 letters to the House and Senate Transportation committees detailing “chronic service failures.”

“This [situation] has put rail-dependent business operations throughout the U.S. at risk of shutting down, caused severe bottlenecks in the delivery of key goods and services, and has put the health of our nation’s economy in jeopardy,” the RCC said.

Harrison, in his response, began by stating that CSX “was greatly disappointed with your many unfounded and grossly exaggerated statements … related to the service experienced by some customers as we implement Precision Scheduled Railroading, which has a proven history and long track record of delivering superior transportation services for customers. Though you did not extend us the courtesy of discussing those concerns with us first, most likely because your statements were made to advance your longstanding attack on the balanced approaches of the Staggers Act, we wanted to respond directly, and set the record straight.”

“That opening is dreadful,” says one industry observer. “Harrison spits in the face of the Golden Rules of customer service. Rule No. 1: The customer is always right. Rule No 2: When the customer is wrong, refer to Rule No. 1.”

Harrison had earlier blamed CSX’s service problems on certain employees who he said “have pushed back” against the changes he is implementing.

The Surface Transportation Board on Aug. 16 updated its Congressional oversight committees—the Senate Committee on Commerce, Science, and Transportation and the House Committee on Transportation and Infrastructure—“on recent actions the Board has taken in response to service problems on [the] rail system. In addition to the ongoing weekly calls between CSX senior management and STB staff initiated late July, the Board advised the committees of the Acting Chairman’s direct communication with [Hunter Harrison] about service issues and the Board’s request that CSX provide specific performance data, which will be made publicly available, so that the Board and stakeholders can better monitor CSX’s recovery efforts.

Letters referred to in this article can be downloaded at the link below as a single PDF file.

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