Dive Brief:

• CSX CEO E. Hunter Harrison complied with the Surface Transportation Board's request to detail an operating plan for the rest of the year through a letter, which was released Monday by the regulator.
• The letter outlines five changes the railroad has so far undergone: balancing the scheduled network; placing commercial personnel at "challenged field locations"; converting hump facilities to flat switching yards; reviewing asset utilization; and updating its operating metrics.
• The sudden changes were part of CSX's transition to a Precision Scheduled Railroading (PSR) operating model and led to various setbacks. However, Harrison believes the new model will help the railroad focus on safety, service, network fluidity, asset utilization and financial performance throughout 2017.

Dive Insight:

Harrison's letter to the STB highlights various of the root causes of CSX delays identified by various news outlets in July and August, and confirm it is all part of the railroad's switch to PSR.

"Since fundamental change cannot be implemented while working from two separate operating plans, the changes occurred over a short period of time to effectively realize the benefits of the new PSR plan," Harrison wrote. "We recognize that this congestion has impacted traffic flows at various western corridor terminals during parts of July and August, and intermittent service issues have occurred elsewhere on our network."

The letter thus nods at the service disruptions that led the STB to request a plan and weekly communication in the first place. Since July, CSX has suffered delays of more than a week, laid off more than 2,300 workers and seen its chief engage in a war of words with its union workers. The complaints were compiled early on by Railway Age, before 44 trade associations sent a letter to the railroad demanding justification for the disruptions.

"CSX has been and will continue to aggressively address remaining congestion, and has renewed efforts to inform customers during our implementation of PSR," Harrison wrote in his latest letter. Communication with shippers, the STB wrote early on, was one of CSX's major shortfalls throughout this transition period.

But few of the letter's points show the degree of the railroad's transformation as completely as the update to the railroad's operating metrics. Last week, CSX uploaded a presentation to the Surface Transportation Board's website, explaining the metrics used to measure performance would soon be outdated with the new PSR model.

According to the presentation, the changes to the metrics are due to PSR's focus on service and train utilization, as opposed to road train origination and arrival metrics. In other words, the company is attempting to track velocity, dwell time and cars online more accurately — and actively — rather than upon arrival at each station. The new metrics are necessary to help determine whether Harrison's dual focus on a "balanced train plan" and "terminal fluidity" succeed.

Skeptics could argue the changes in metrics are merely a ploy to invalidate service level comparisons from before Harrison's time, to data reported thereafter. However, in its presentation, CSX notes the trends remain the same despite the change in metrics and offers historical data based on the metric on its website. The charts in the presentation also reveal dwell times have increased significantly during Q32017, as have the number of customer "problem logs," for the carrier to investigate and respond to.

"Changes of this magnitude tend to give rise to temporary challenges," Harrison warned in his letter, echoing similar statements from May.

Perhaps the delays are but hiccups of a radical transformation, but they affect shippers nonetheless. At a minimum, the letter and presentation provide clarity regarding Harrison's goals in the process, beyond improving customer service, and metrics with which to measure progress.

Success is another story, but one that will be closely watched by shippers, regulators and competitors alike.