STB UPDATE - CSX Transportation · PDF fileSTB UPDATE SEPTEMBER 13, 2017. 2 ... Velocity continues acceleration with reduction of train delays while en route ... Transitioned to flat-switching

STB UPDATE

SEPTEMBER 13, 2017

2

Post-Labor Day Highlights

Terminal fluidity largely restored with yards well-equipped to execute the plan

Dwell and >48 hour dwelling cars now below late Q2 levels

Velocity continues acceleration with reduction of train delays while en route

Customer issue logs returning to expected levels as a result of network improvement

The combination of lower dwell, increased speed and reduced train delay will continue to

aid car fulfillment, transit and overall service experience

CSX preparing for sound execution into a period of heavier volume

Hurricane Irma not expected to interfere with broad recovery momentum;

however, will have localized effect on week 37 metrics (to be identified)

3

Sound progression in network performance through holiday week

Dwell improved last six weeks; velocity climbed last three weeks, significantly so last week

Right Car Right Train in a stable range

Crew and power resource levels remain well matched to demand

Hump yards performing reliably as hump volume stays at elevated levels

Western terminals recovered, secondary congestion substantially recovered

Empty car fulfillment remained higher last week

Local pull and place performance stable

Customer problem logs down three weeks in a row and approaching normal levels

Interchange volumes and performance steady

CSX experienced congestion challenges at Western corridor terminals from mid-late July

(weeks 29-31); original terminals now healthy and network recovery progressing

Dwell improved each of the last six weeks; strong velocity performance

4Note: Dwell and velocity displayed according to CSX methodology; explanation of CSX methodology can be found in appendix.

Two disruptive derailments occurred in weeks 31 and 32, detrimentally impacting network performance

Velocity (mph)

48%

52%

57%

61% 7

2%

72%

62%

Sep. 2 – Sep. 8

14.1

14.0

14.1

14.5 15.3

14.8 1

5.8

Sep. 2 – Sep. 8

10.4

11.0 11.9

12.5

12.2

11.3

10.0

75%

69%

72%

73% 82%

74%

76%

15.6 15.5 15.0 15.0

13.5 13.3 13.0 13.2 13.1 13.3 13.6

25 26 27 28 29 30 31 32 33 34 35

Weeks

On Time Originations (%)

Dwell (hours)

75%76%70%

66%58%59%

55%57%55%51%50%

25 26 27 28 29 30 31 32 33 34 35

Weeks

On Time Arrivals (%)

Sep. 2 – Sep. 8

Sep. 2 – Sep. 8

On-Time

+2 hrs

On-Time

+2 hrs

11.8 11.912.3

11.912.8

13.2 13.1 12.8 12.511.8 11.5

25 26 27 28 29 30 31 32 33 34 35

Weeks

86% 87% 85% 82%77% 74% 72% 72% 70%

65% 63%

25 26 27 28 29 30 31 32 33 34 35

Weeks

Weekly Average

71

%

68

% 70

%

69

%

73

%

77

%

75

%

Right Car Right Train holding relatively stable; less relevant in PSR

5

Right Car Right Train1

75%

73%73%

75%

73%72%71%

70%

72%73%73%

25 26 27 28 29 30 31 32 33 34 35

Weeks

Sep. 2 – Sep. 8

1 ‘Right Car Right Train’ is defined as the percentage of cars that departed from a yard in accordance with their car scheduling trip plan

Right Car Right Train is no longer a measure

that CSX uses to manage its operation

― In precision scheduled railroading (PSR), if a car can

be advanced on another train to speed transit or

ensure its on-time arrival, there is not one “right train”

Car priority is to move cars quickly, on next

available train

― Asset utilization a key tenet of PSR

Train priority is blocking integrity and departing

all available, relevant cars from the yard

― Blocking integrity certifies that a train is built correctly

and shipments are headed to the correct location

― Managed through field supervision

Weekly Average

9,2239,338

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

8,900

9,100

9,300

9,500

9,700

9,900

Weeks

6

Resourcing appropriately to meet business needs

Power and crew availability steady in third quarter at approximately 99% and 95%, respectively

Q3 locomotive level stable; recently added engines

in response to incremental coal demand

T&E trend tracking normal seasonality; re-crew

rates remain at historic lows and stable

Train & Engine Headcount and Re-crew Rate1Active Locomotives

3,763

3,198

2,000

2,400

2,800

3,200

3,600

4,000

Weeks

1 Re-crew rate is re-crew people starts as a percent of total measured people starts, and it represents incidences of replacing a crew on

the same train ID (generally due to hours of service)

7

Hump yard performance steady

CSX Hump Terminal Overview

Transitioned to flat-switching operations

Hump terminals

Selkirk, NY

Cumberland, MD

Hamlet, NC

Waycross, GA

Atlanta, GABirmingham, AL

Nashville, TN

Louisville, KY

Avon, IN

Cincinnati, OH

Willard, OH

Toledo, OH

19.5 19.020.0

18.0 18.8 19.3 19.019.9

19.020.3

21.4

25 26 27 28 29 30 31 32 33 34 35

Weeks

Dwell at Hump Terminals1

Key hump productivity and efficiency measures

performing well

― Cars per man hour at hump yards accelerating through the quarter,

indicating yard productivity with higher volume at remaining humps

― Dwell up slightly, though expected to return to lower levels (post-

hurricane impact)

1 Dwell displayed according to CSX methodology; explanation of CSX methodology can be found in appendix

Absolute number of humps not “good” or “bad”; goal is

best mix of hump and flat yards for processing efficiency

Weekly Average

20

.0

23

.8

21

.6 24

.5

23

.3

20

.8

19

.3

Sep. 2 – Sep. 8

Key terminal productivity and performance measures

recovered in former “trouble” spots― Dwell recovered and performing well

― Greater yard productivity evident in cars per man-hour processed

Train plan addressed secondary concerns― Leveraged Avon as near-term offset of increased volume flow

through Russell, Columbus and Louisville

― Dwell at these three locations down an additional 12% week-

over-week, and 33% over three-week time period

8

Western performance improved; plan changes alleviating congestion

16.016.9 16.8 17.3

19.9

22.1

19.5

16.0

14.0 13.714.8

25 26 27 28 29 30 31 32 33 34 35Weeks

Dwell at Western Terminals1

Western Corridor Key Terminals

Birmingham, AL

Nashville, TN

Avon, IN

Evansville, IN

Montgomery, AL

Mobile, AL

Western terminals

1 Dwell displayed according to CSX methodology; explanation of CSX methodology can be found in appendix

Weekly Average

11

.3

12

.1

11

.1 13

.6

13

.0

10

.9

11

.4

Sep. 2 – Sep. 8

9

Car order fill slowly climbing; car flows to be interrupted by hurricane

40%

45%

50%

55%

60%

65%

70%

75%

80%

85%

90%

2,000

3,000

4,000

5,000

6,000

7,000

25 26 27 28 29 30 31 32 33 34 35 36

Weeks

Weekly Orders Normalized Order Fill %

Weekly Car Orders and Normalized Fill Rate

Q1 Avg. Weekly Car Orders

Orders remain detached from demand

― Car orders up ~40% in Q3 vs. Q1 2017

― Merchandise carload expectations down

slightly in comparable timeframe

Empty car dwell increasing at

customer locations; down on CSX

― Climb of empty customer dwell indicates

improved car supply and availability;

prevention of shutdown situations

― Reduction of empty railroad dwell indicates

improving network flow of empty cars

Normalized fill rate1 ranging 70-85%

― Process evaluation underway to realign order

level with demand and improve fulfillment

accountability

Cars

Ordered

Normalized

Fill Rate

1 Normalized fill rate is a proxy of demand fulfillment against historical/expected order levels,

as current order levels have disconnected with demand

10

Last mile performance stable and returned to levels at end of Q2

Local Service Measurement1

95%90%

84% 83%80% 81% 81% 80% 79% 78%

82%85% 83% 82%

Q1AVG

Q2AVG

25 26 27 28 29 30 31 32 33 34 35 36

Weeks

1 ‘Local Service Measurement’ is defined as the percentage of cars that were pulled or placed at a customer location based upon

daily customer request, the local service plan and available inventory at the local serving yard

Local Service Measurement (LSM) is no longer

a metric that CSX uses to manage its operation

― In precision scheduled railroading (PSR), focus on

end-to-end transit and customer expectations

― Last mile performance must be in combination with, not

independent of, overall performance

Accordingly, LSM as a reported metric was

discontinued upon start of PSR implementation

― At request of STB, last mile tracking reinstated to

monitor through implementation period

― Data reflects passive information flow, lacking prior

focus on field reporting to ensure LSM capture

Reliable pull and place expected as part of

service to customers

11

Customer problem logs down more than 50% over last three weeks

354 368

286

374

458

570 563537

567

499

374

281

25 26 27 28 29 30 31 32 33 34 35 36

Weeks

Delayed Cars Bad Order Switching Issues

Customer InquiriesDaily Average Log Volume

Delayed cars remain most frequent concern

― Trend in problem logs mirrors timeframe of network

challenges and recovery

― Enhanced focus on long-dwell cars ensures all cars

benefit from fluidity gains

Customer service and commercial presence at

key field location has aided communication and

problem resolution

Nearly 90% of last two weeks’ problem logs

have been addressed and closed to-date

― Leaving more logs open through final destination

― Managing pipeline of customer concerns to full resolution

Westbound interchange ticked down in week 36, steady performance

0

200

400

600

800

25 26 27 28 29 30 31 32 33 34 35 36

Weeks

East St. LouisDaily Average Interchange Volume

From To

0

200

400

600

25 26 27 28 29 30 31 32 33 34 35 36

Weeks

New OrleansDaily Average Interchange Volume

0

400

800

1,200

1,600

2,000

25 26 27 28 29 30 31 32 33 34 35 36

Weeks

Chicago Daily Average Interchange Volume

0

100

200

300

25 26 27 28 29 30 31 32 33 34 35 36

Weeks

MemphisDaily Average Interchange Volume

12

13

Precision scheduled railroading to produce service improvement

Improve

Service

Operate

Safely

Control

Costs

Drive Asset

Utilization

Develop

People

Operational Focus

Terminal

Fluidity

Balanced

Train Plan

Service Improvements

Rolling Stock

UtilizationPeople

Efficiency

Fuel

OptimizationTrain

Density

Improved

FrequencyBetter

Reliability

Faster

TransitQuicker

Turnaround

Productivity Improvements&

Realigned service frequency in second quarter

Set the groundwork of a balanced train plan in early July

Currently balancing between terminals’ improving efficiency and modest adjustments in traffic

flows to recover near-term service

Improved execution on this foundation to drive long-term service and productivity improvements

APPENDIX

15

Velocity

Former Line of road miles per hour

Current

Total miles traveled per hour,

including intermediate dwell of

the train

Change

Reason

Includes full trip of a train and

ability to diagnose overall speed

profile (in support of

improvement in asset cycle)

Effect on

MetricReported velocity will be lower

CSX has changed methodology on some metrics reported publicly

Dwell

FormerCar time at terminal, excluding

cars on the same train ID

Current

All car time with a terminal work

event, including through cars on

same train ID (e.g. crew change)

Change

Reason

Includes all dwell with ability to

diagnose all events impacting car

movement (in support of

improvement in asset cycle)

Effect on

MetricReported dwell will be lower

Restated historical data in new methodology available on csx.com/servicemetrics

Cars Online

FormerAll cars on CSX, as determined

by RailInc

Current

RailInc cars on CSX, excluding

cars stored, under repair, sold,

and private cars ex online

inventory

Change

Reason

More accurate measurement of

active cars on line, i.e. cars for

which CSX is focused on real-

time, efficient movement

Effect on

Metric

Reported cars online will be

lower