I knew Hunter Harrison when he was a Burlington Northern trainmaster and I was a BLET Local Chairman, all those many years ago. Today, as Hunter’s Precision Scheduled Railroading (PSR) is rolled out on six of the seven Class I railroads, I’ve come to believe that PSRis not a destination, but a never-ending journey. At least that’s how I see it.
E Hunter Harrison
Financial Edge, January 2019: Railway Age’s January Issue will be released early next month, but we thought we’d give our readers a Holiday treat with Financial Editor David Nahass’ column, which has a particularly relevant (and a bit tongue-in-cheek) Christmas theme centered around a famous Charles Dickens short story.
For CSX, the fallout from former CEO E. Hunter Harrison’s December 2017 death only eight months after he was hired at a substantial premium continues. According to a Dec. 15, 2018 report by Andrew Pantazi in the Florida Times-Union, three CSX shareholders filed a derivative suit this year against the company’s board, “arguing it committed misconduct in hiring Harrison and not sharing information about Harrison’s health with shareholders before a 2017 vote to pay for an $84 million benefits package for [him].”
Nearly one year after his death at 73, the legendary Hunter Harrison’s quest to improve CSX’s performance through Precision Scheduled Railroading (PSR) appears to be in full swing. CSX’s 3Q18 net earnings of $894 million, or $1.05 per share, vs. $459 million, or $0.51 per share in the same period last year, is a 106% increase. CSX’s operating ratio set a company third-quarter record of 58.7%, compared with 68.4% in the prior year—a 970 basis point improvement.
If ever there were a human equivalent to liver and onions—hated or loved, but no in-between—it was the late Ewing Hunter Harrison III, a chief executive of four major North American railroads, personally synonymous with the term “Precision Scheduled Railroading,” and whose mention invokes often disquieting debate on theories of management and how best to deliver shareholder value in the short- and long-term.
Management at CSX are staying the course set by E. Hunter Harrison.
The late Hunter Harrison’s body of work “will likely be talked about in railroad circles for decades to come,” says Cowen and Company Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl. “CSX’s Board of Directors will be under significant pressure to find a replacement with an operating background quickly.”
E. Hunter Harrison is gone. Railway Age’s twice-honored Railroader of the Year (2002 and 2015) died on Saturday, Dec. 16, in Wellington, Fla., from what CSX, the railroad that ultimately became the last stop in a long and distinguished career, attributed to “unexpectedly severe complications from a recent illness.” He was only 73.
COVER STORY, RAILWAY AGE, OCTOBER 2017: After “a very ragged 90 days,” CSX seems to be settling down as its CEO gives his Precision Scheduled Railroading one more go.
Is CSX emerging from what many observers, including customers, say is an operational and service meltdown created by a “too much, too soon” rush to implement Precision Scheduled Railroading on an arguably complex network? CSX President and CEO E. Hunter Harrison says “yes.”