CEO PERSPECTIVE: Railroads as a Sustainable Business

As part of a special series in Railway Age’s March 2021 issue, 11 North American railroad CEOs address the daunting challenges the freight rail industry faces as the 21st century enters its third decade—from operations and technology to marketing and growth. Here, Jim Foote, President and CEO of CSX, discusses growing business, while practicing meaningful environmental, social and corporate governance.

As a backbone of the U.S. economy, freight railroads offer essential transportation services to businesses and customers across the country. Over the past 12 months, as the world has been grappling with the COVID-19 pandemic, the industry’s critical role has accelerated, with safe, reliable service becoming more important than ever to transport essential goods and keep America—and its economy—moving. 

While the world has been laser-focused on COVID-19, the effects of climate change have not slowed, underscoring the need for businesses to double down on their sustainability approach. Rail is the most sustainable mode of land-based transportation: On average, freight railroads are three to four times more fuel efficient than trucks and produce 75% fewer greenhouse gas (GHG) emissions. This is not only a considerable environmental advantage for freight rail, but also a significant opportunity to help customers reduce their own carbon footprints by diverting incremental volumes off the highway, without sacrificing reliability. 

With this advantage comes both an opportunity and imperative for the railroad industry to lead by example to mitigate the effects of climate change and forge the way toward a low-carbon economy. 

At CSX, we take this responsibility very seriously and have made sustainability core to how we operate. 

In 2017, we embarked on a transformative journey to become the safest, most efficient, best-run railroad in North America, offering unparalleled service and environmental benefits to customers. 

Our operational transformation enabled us to drive significant improvements across the business, including our Environmental, Social, and Governance (ESG) performance. It allowed us to achieve new levels of environmental efficiency, as well as safety performance and customer excellence. These include: 
• Reaching 2020 emissions reduction targets ahead of schedule.
• Becoming the first U.S. Class I railroad to operate at a fuel efficiency rate of less than one gallon of fuel per thousand gross ton-miles.
• Establishing the first U.S. Class I railroad emissions reduction target to be approved by the Science Based Targets initiatives, setting the goal of a 37% reduction in GHG emissions intensity by 2030.
• Delivering record-setting safety performance across the network through enhanced safety training, processes and technology.
• Achieving faster transit times, greater schedule reliability, increased transparency of network performance, and more consistent freight flows, resulting in a superior service for customers. 

CSX is now better positioned to be a best-in-class supply chain partner to customers. Average transit time for merchandise carloads has been reduced by more than two days, and total fuel efficiency has improved by more than 15%. This new efficiency results in a more attractive service product for customers and greater environmental benefits due to decreased fuel usage and lower emissions. In addition, we are able to offer customers a higher level of reliability, predictability and transparency than has ever been possible through rail.

— “We are focused on leveraging the inherent benefits railroads offer as the most sustainable mode of land-based transportation and are working hard to make sure CSX is building on these benefits.” —

To provide the best possible experience for our customers, CSX continues to use and invest in innovative technologies to streamline supply chains and create more efficient modes of delivery. For example, through the introduction of XGate—a revolutionary new system that reduces potential emissions at intermodal terminals by up to 90%—we were able to increase the pace of customer deliveries by scanning and inspecting containers in a fraction of the time it takes a team of workers to do so. We are also using zero-emission automated cranes at some of our major intermodal terminals, which maximizes efficiencies and environmental benefits.

Looking ahead, we are ready to embark on the next phase of sustainable growth by making CSX rail the ground transportation mode of choice. With continued investments in rail assets, accident prevention, environmental technology, fuel efficiency, and more, we continue to look for opportunities to better serve our customers, employees and the communities in which we operate. We are focused on leveraging the inherent benefits railroads offer as the most sustainable mode of land-based transportation and are working hard to make sure CSX is building on these benefits to continue leading the industry in safety and sustainability.

Our leadership in the freight rail industry and our aspirations rely on our ability to conduct business in a sustainable way that does right by our stakeholders, including customers, employees, communities and shareholders. While we are proud of the progress we have made, we know our work isn’t done. We are always striving to be safer, more efficient and more reliable. It is my responsibility to drive the mission of CSX, which is to be the best run railroad in North America. I believe the best is yet to come for CSX. 

Read more of Railway Age’s special CEO Perspectives series:

• Ian Jefferies, Association of American Railroads: Sustainable Economic and Legislative Policies
• Katie Farmer, BNSF: Leveraging Advanced Technologies
• Keith Creel, Canadian Pacific: Growing the Top Line
• JJ Ruest, CN: Improving Customer Supply Chain Visibility
• Pat Ottensmeyer, Kansas City Southern: Maximizing USMCA for Cross-Border Growth
• Jim Squires, Norfolk Southern: Building the Digital Railroad of the Future
• Lance Fritz, Union Pacific: Smart Capital Investment Strategies
• Peter Gilbertson, Anacostia Rail Holdings: Providing Outstanding Customer Service
• Dean Piacente, OmniTRAX: Building Better Communities Through Industrial Development
• Dan Smith, Watco: Integrated Transportation Services Fuel Growth