CSX at 40

North America has seven major freight railroads in the first part of the 21st century. Of the seven, only one traces its roots to the earliest beginnings of railroading on the continent, CSX. Of the seven, only one set many of the standards for which the fledgling American railroad system would follow. Only one can claim that predecessor railroads played significant roles on both sides in the Civil War. For more than 190 years, CSX and its predecessors have provided an important transportation service to the nation, to their regions, and to one community after another. They’ve carried soldiers off to war, reunited families, taken the hopeful in search of work, the weary back home, and lovers off on their honeymoons. Private railroads don’t run their own passenger trains any…

When industry observers looked at CSX Transportation in 2016, they thought the railroad had done a good job weathering the historic and punishing decline of coal. In just five years, the bottom had fallen out of the commodity that sustained the railroad for generations. Half of CSX’s coal traffic vanished, taking with it nearly $2 billion in revenue. Yet CSX was able to tread water by cutting costs, raising rates, and gaining intermodal volume. And no one saw CSX as a broken railroad. Except E. Hunter Harrison. The Canadian Pacific chief executive saw nothing but opportunity to remake CSX into a leaner, more efficient railroad, as he and his Precision Scheduled Railroading operating model had done at Illinois Central, Canadian National, and CP. The CSX of today is not the…

By any standard, 2017 was a whirlwind year at CSX Transportation. It started with a bang when the Wall Street Journal broke the news on Jan. 18 that Canadian Pacific CEO E. Hunter Harrison was retiring early to pursue a management shake-up at CSX. The railroad’s stock price shot up 23% in one day, ultimately soaring 31% in just three days and boosting CSX’s value by more than $10 billion. Investors were confident because they had seen this movie before. Harrison was once again teaming up with Paul Hilal, the hedge fund manager who lured him out of retirement in 2012 and waged a successful proxy battle that ousted CP’s chief executive and several board members. In short order, Harrison’s Precision Scheduled Railroading makeover tripled CP’s profits. The message from…

2017 Jan. 18: CEO E. Hunter Harrison retires from Canadian Pacific, and with Paul Hilal, his partner from the Mantle Ridge hedge fund, targets a management shake-up at CSX Transportation. Feb. 21: CSX CEO Michael Ward and President Clarence Gooden announce they will retire. Railroad announces elimination of nearly 1,000 management jobs, 20% of management ranks. March 6: Mantle Ridge and CSX avoid proxy fight, reach deal, and name Harrison chief executive. March through May: Humps idled at Atlanta; Stanley (Toledo), Ohio; Louisville, Ky.; Hamlet, N.C.; Cumberland, Md.; and Birmingham, Ala. Cars moving in metals and rock unit trains are blended into the merchandise network. Service improves. June: Most intermodal trains switched to daily schedules. Florida intermodal trains consolidated. Local service plans restructured. July: Merchandise train changes implemented over Fourth…

Hunter Harrison was no stranger to controversy, and his time at CSX was no exception. Longtime CSX officials say the railroad was risk-averse, bureaucratic, and reluctant to make changes that could improve operations and finances, and that many of Harrison’s moves should have come years earlier. But they say Harrison created a chaotic, fear-driven environment, especially when projects had to be done “Hunter fast.” The most difficult part of transforming CSX, Harrison said, would be changing the corporate culture. Employees who couldn’t adapt to a new way of doing things wouldn’t make the cut. Harrison’s broom swept clean headquarters and many field supervisors above the level of trainmaster. “Hunter was a force of nature. There’s no question about it. I don’t know if fanatic is the right word. But he…

In these three maps, we address the complexity and ever-changing nature of CSX Transportation. The map on these pages show the pieces of the Family Lines and Chessie System that fit together to form CSX at its birth in 1980, as well as lines added through the CSX-Norfolk Southern division of Conrail in 1999. There are also a few less celebrated parts. (For a look at the railroad’s earlier antecedents, see pages 22-31). While the railroad has evolved today to operate primarily as a triangle between Chicago, the New York area, and Florida, this map shows just how much more than those three corridors it originally encompassed. Notably — to those of us at Kalmbach — this was one of the final projects of illustrator Rick Johnson, who retired in…