Interview with Chessie's Joe

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Joe Hinrichs, CSX Corp. CEO since September, has faced a potential rail strike, service issues and scrutiny of railroad safety—but he is focused on rebuilding trust with employees and customers

Wall Street Journal

There appears to be a rebuke of "The Gospel....", or otherwise Precision Railroading, within such.

Is this really an apparent rebuke, a sharp disapproval of Precision Scheduled Railroading?

Or, is this actually an apparent endorsement of PSR?

From this WSJ interview, "Chessie's Joe" said:

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It's not an issue of "is PSR bad or good" it's an issue of balance and making sure that you have the right priorities constantly and including employees and customers in how you implement scheduled railroading

We're 196 years old and there's been a lot of distrust over the years between employees and management

Here's what Mr. Hinrichs said during his interview at the 2/25/23 Barclays Industrial Select Conference:

https://seekingalpha.com/article/458207 ... transcript

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And the implementation of PSR was done extremely well [at CSX] and it's a very well-run railroad when it has the people and has the people working together.

What's happened is PSR and these things have gotten a bad name, not because the principles are flawed at all. It's how they were implemented and how people felt customers were prioritized.

Here's what Mr. Hinrichs wrote for Railway Age published 4/24/23:

https://www.railwayage.com/freight/clas ... er-growth/

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Growth is driven by service. The principles of scheduled railroading produced dramatic improvements at CSX before the pandemic upended the global economy in 2020. Supply chain congestion and labor shortages overshadowed much of the progress we had made, but the foundation remained intact, and over the past six months we have succeeded in replenishing our train-and-engine workforce and restoring network fluidity.

So far in 2023, our operating performance metrics have largely returned to pre-pandemic levels, and we are providing some of the best service in our railroad’s history

Amid the confusion of the howling mob, Mr. Hinrichs' voice of reason understands what PSR is about, the benefits it offers, and that across 30 years and 7 carriers criticism comes from varied implementation and measures of pursuit. Significantly, his response targets the huge impact of Covid and the Great Resignation confused in the criticism, all within 40-year challenging issues surrounding railroad relevance and growth in the wider world.

Like CSX, across the PSR Class 1's, some will rename the baby, but none will throw it out with the bathwater. And, interestingly enough when it comes to judging PSR, non-PSR BNSF is in the same bathwater.

Most importantly moving forward, with competing truck technology advancing improved labor and fuel/emissions productivity directly targeting half of rail's unit volume while the howling mob calls for weakening and stymying rail's ability to respond, inviting the threat of unintended consequences, one can only hope voices of reason like Mr. Hinrichs' prevail.

Mr. QB, Uncle Warren's 1:1 Lionel is not totally immune from the teachings of "The Gospel According to Saint Elwood".

Examples I note from my (almost) daily walks along the Chicago Sub are that some loadings, such as autos that were formerly handled in dedicated "unit trains" are now just handled in manifest trains. Further, Manifests now come through town at a world shattering speed of 25mph, if even that. The reasoning there is "hey all we have to get to is the 150 miles to Galesburg and we have a "fresh crew", i.e. fully rested and not some four hour respite or even turning on Continuous Time, so why burn up all that gas just to go authorized 50mph?

But no sign of 200 car trains with mid-train DPU's; just rear-end "pushers" on "hot stuff" like Containers.

Mr.Norman, your observations of BNSF activities and the quotations from the CSX CEO illustrate the history repeating itself story of the last several years with PSR, ORatios and so forth.

Note that now service improvements are being looked at. OR's are important, but it is a byproduct of repeat business developed from dependable, repeatable operation. Of course, you always try to balance efficiency with service for the customer, no different than any other business enterprise.

How all of this looks like 100 years ago during the Drag Freight Era. Its just done with diesels and computers and even longer freights.

Then some rail lines woke up that the customers were getting tired of 'it wil get there when it gets there'. Which railroads could get away with until the first trucks started taking freight with even the bad roads of the time and still beat the train door to door. This ushered in the time freight and the accompanying development of steam super power [and ultimately the road diesel-electric] to improve service.

Mr. Norman, BNSF is not immune from the necessary response to the greatly accentuated 40-year industry challenges with the decline of bedrock coal traffic in the struggle to grow above, beyond and pre-dating PSR's 2017 introduction at CSX. A good point of reference is the March 2017 Trains issue headlining a "Special Report: Our Troubled Industry. Where Do We Go From Here?", the same month Hunter Harrison began his short tenure as CSX CEO.

As such, in their similar and industry-interrelated pursuits, branded as "not PSR", reflecting their ownership and strategy relating to their own franchise, they are suffering the same consequences as the branded/re-branding PSR Class 1's, which points more toward the "necessary response" than specifically PSR principles and their varied application among the remaining Class 1's.

Important when critiquing Hunter Harrison's PSR and its success at transforming a laggard CSX in contrast to BNSF's own response, is recognizing its beneficial focus upon a strategically important declining merchandise carload franchise by (finally) designing and managing a service product based upon door-to-door service targeted to a long-unmet market need for reliability within that long-challenged pursuit of growth once underwritten by coal.

Latest interview with "Chessie's Joe", CSX CEO Mr. Hinrichs, at the 6/1/23 Bernstein's 39th Annual Strategic Decisions Conference 2023. Plenty of good information regarding PSR, labor, regulatory & legislative challenges, and markets all intertwined in CSX's strategic direction.

https://seekingalpha.com/article/460884 ... rence-2023

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I want to state that I believe scheduled railroading is here to stay, and I believe there's a benefit from scheduled railroading. We could talk about how it was implemented and that's some of the effects we're dealing with. But clearly, I believe scheduled railroading is an advantage for CSX and something that we continue to lean into.

You've found a quote that mentions retaining the one actual helpful characteristic of PSR: a schedule.

PSR as we know it, as was incepted by the late EHH, will be dead within 5 years across the Class Is IMO. Many of the tenants have already begun to be unraveled.

Tenants? Oh, you must mean tenets also known as principles. I'll trust what's being said by those leading our railroad industry, like Mr. Hinrichs, and who understand what those principles actually are. PSR won't be going anywhere except in name only.