Eastern Railroad Discussion > More CSX Intermodal Lane Elimination coming in January

https://www.joc.com/rail-intermodal/class-i-railroads/csx-transportation/csx-eliminate-about-300-more-intermodal-lanes-2019_20181005.html

230 Domestic intermodal and 65 international origin-destination pairs will be eliminated on January 3, 2019 by CSX. 



Edited 1 time(s). Last edit at 10/09/18 04:37 by JPB.

I remember hearing an analysts call from CSX in the early EHH era, when there were complaints about insufficient profit margins on intermodal. I wonder where the cutting will end. 

They are cutting intermodal service and already have in many places at the same time they are suing NS for access to an intermodal port.  What a joke!

ctillnc Wrote:
-------------------------------------------------------
> I remember hearing an analysts call from CSX in
> the early EHH era, when there were complaints
> about insufficient profit margins on intermodal. I
> wonder where the cutting will end. 

After they run off all the business. Then they can get rid of CSXI, more locomotives, and cut down on crew starts. Less costs = more profits.
Michael t Kerner
Collinsville, IL

Posted from Android

Sounds like more PSM (Precision Stock Manipulation).  I think TO's "TAW" coined that one...


Allen

ctillnc Wrote:
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> I remember hearing an analysts call from CSX in
> the early EHH era, when there were complaints
> about insufficient profit margins on intermodal. I
> wonder where the cutting will end. 

That's been a complaint for a while.

As long as coal, ore, oil, chemicals, etc paid the big fixed costs, the intermodal was icing on the cookie. With coal on the skids, oil being squeezed, etc intermodal costs are under more scrutiny.

Posted from Android

I wonder of this was part of the decision to allow BNSF into North Baltimore via haulage agreement. BNSF replaces CSXT as the carrier in that area.

Lackawanna484 Wrote:
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>. With coal on the skids, oil being
> squeezed, etc intermodal costs are under more
> scrutiny.

Well...through June 30th total coal exports were up 24% at Baltimore verses same time period 2017,  and up 31% at Norfork.  We would have to break down the export numbers further to find out how much is moving on CSX vs. NS.  And find out the location of what mines are the most active in the export market.


Allen

Unfortunately, the world these days is driven by getting the best profit and/or return on investment possible.  Using XYZ railroad as a ficticious example, if XYZ invests $1,000,000 to attract/generate $10,000 profit per year, it'll take a hundred years to break even.  Not a very good investment.  The ROI is 1%.  But if that million dollars is spent such that it results in $100,000 profit per year, now the ROI is 10%. 

On an individual basis, do you put your investment money into simple savings accounts or do you put the bulk of it (or all, perhaps) where you'll bet better returns or dividends?  And no, this is not a discussion of personal investment strategies...it's about getting more 'bang for your buck'.



Edited 1 time(s). Last edit at 10/09/18 21:36 by BRAtkinson.

Not registering to that site just to read an article, sorry...

> Unfortunately, the world these days is driven by getting the best profit
> and/or return on investment possible.

In most industries, that's been the case for decades. Companies that don't figure this out become targets for raiders, like the mythical Teldar Paper in 1987's Wall Street. The exceptions are rapidly growing markets where short-term profitability is sacrificed for market share. We see that often in high-tech and Internet-related companies. Railroading ain't one of those exceptions. 

> Using XYZ railroad as a ficticious example, if XYZ invests $1,000,000
> to attract/generate $10,000 profit per year, it'll take a hundred years to
> break even. Not a very good investment. The ROI is 1%. But if that 
> million dollars is spent such that it results in $100,000 profit per year,
> now the ROI is 10%.

Well, that's an annualized ROI and it gets more complicated when taxes, costs of capital, rates of inflation, risks, etc are added to the calculations. But your point is valid.  

bradleymckay Wrote:
-------------------------------------------------------
> Lackawanna484 Wrote:
> --------------------------------------------------
> -----
>
> >. With coal on the skids, oil being
> > squeezed, etc intermodal costs are under more
> > scrutiny.
>
> Well...through June 30th total coal exports were
> up 24% at Baltimore verses same time period
> 2017,  and up 31% at Norfork.  We would have to
> break down the export numbers further to find out
> how much is moving on CSX vs. NS.  And find out
> the location of what mines are the most active in
> the export market.
>
>
> Allen

So, are you saying that total coal shipments on CSX are higher now than they were 10 years ago?  Or just confirming coal exports are way up while total CSX coal hauling is way down? I can't imagine CSX is hauling more total coal now than it did 10 years ago

Coal rates, especially to regulated utilities, helped create a balance of revenue for CSX, NS etc for decades.  With total shipments of coal way down, other products which went along for the ride now have to contribute to upkeep.

Lackawanna484 Wrote:
-------------------------------------------------------

> So, are you saying that total coal shipments on
> CSX are higher now than they were 10 years ago? 
> Or just confirming coal exports are way up while
> total CSX coal hauling is way down? I can't
> imagine CSX is hauling more total coal now than it
> did 10 years ago

Paul, exports are up over 2017.  But I don't know what percentage of export coal is going via CSX verses NS.  I haven't checked.  Last time I did NS had the higher volumes.  That might be because the busiest mines are located on NS.  It appears to me that India may be the largest buyer.  But it would surprise, even shock, people what countries coal is exported to.  Keep in mind quite a bit of coal is exported for steel making...


Allen

bradleymckay Wrote:
-------------------------------------------------------
> Lackawanna484 Wrote:
> --------------------------------------------------
> -----
>
> > So, are you saying that total coal shipments on
> > CSX are higher now than they were 10 years
> ago? 
> > Or just confirming coal exports are way up
> while
> > total CSX coal hauling is way down? I can't
> > imagine CSX is hauling more total coal now than
> it
> > did 10 years ago
>
> Paul, exports are up over 2017.  But I don't know
> what percentage of export coal is going via CSX
> verses NS.  I haven't checked.  Last time I did
> NS had the higher volumes.  That might be because
> the busiest mines are located on NS.  It appears
> to me that India may be the largest buyer.  But
> it would surprise, even shock, people what
> countries coal is exported to.  Keep in mind
> quite a bit of coal is exported for steel
> making...
>
>
> Allen

Understood, and again I agree with you.  I'm just looking at total coal shipments on CSX in the US, both domestic and export, both thermal and metallurgical.  Maybe in 1997, 2007, and 2017. 

My position is CSX is hauling a lot less of its very profitable coal, and now has to price its other commodity and intermodal lines to reflect the actual cost of carrying those items.  A product like intermodal may have received close to a free ride, and is now expected to contribute meaningfully to upkeep, labor costs, etc.