SURFACE & DOMESTIC TRANSPORTATION
TRUCKING | RAIL | INTERMODAL | AIR & EXPEDITED | DISTRIBUTION
40 THE JOURNAL OF COMMERCE www.joc.com AUGUST 21.2017
By Reynolds Hutchins
SOME CSX TR ANSPORTATION customers
say changes instituted under new CEO E.
Hunter Harrison are contributing to dis-
ruption in delivery and lackluster customer
service, forcing them to shift intermodal
cargo to rival Norfolk Southern Railway
or trucking.
Harrison, who took the helm at the
Jacksonville, Florida-based railway in
March, has acknowledged the service dis-
ruptions and apologized to customers, while
attributing the difficulties to unhappy CSX
employees resisting the aggressive cost-
cutting measures that are part and parcel
of his so-called precision railroading busi-
ness philosophy.
Despite a flurry of customer complaints,
critical survey results, and a letter from US
rail regulators on the Surface Transporta-
tion Board, Harrison has stuck to his guns.
He has rejected complaints as attempts to
"low dollar and second guess" his judgment,
and has rejected the idea that CSX is losing
or will lose business to competitors because
of his decisions.
During a second-quarter earnings call
on July 18, Harrison said the greatest chal-
lenge the railroad faces is the "cultural
change" taking place as the railroad transi-
tions under his leadership. He faced similar
opposition to his precision railroading strat-
egy while leading Canadian Pacific Railway
until late 2016 and, before that, Canadian
National Railway, boosting profits at both.
"There's going to be a little pain and
suffering," he told investors and analysts
in the earnings call. "I don't know frankly
how to get there without some busting
CSX'S PAINFUL
TRANSITION
New CEO Hunter Harrison apologizes for disruption
as some customers say they've been pushed past their limit
"There's going
to be a little pain
and suffering."
