CSX’s Foote at MARS summer meeting: Service struggles are all about the workforce shortage
7/21/2022
By Jeff Stagl, Managing Editor
At the Midwest Association of Rail Shippers summer meeting in Lake Geneva, Wisconsin, CSX President and CEO James Foote was insightful and engaging during his July 19 keynote address titled “CSX Service Recovery.”
He approached the lectern with a mug of coffee and explained why. Years ago, he was giving a speech and took a sip of very cold water. His voice froze and he couldn’t speak. Since then, he’s heeded advice received after the incident to always have a cup of something hot handy.
After sharing that anecdote, it didn’t take Foote long to get to the main reason the Class I is still struggling with service performance these days.
“It isn’t about track infrastructure. It’s not about locomotives. It’s not a lack of cars. It’s about one thing only: a lack of employees,” he said.
The railroad is doing everything possible to hire more workers, but keeping them is a challenge, he said. About half of new hires quit within six months of starting a job even though they went through the entire hiring process, a drug screening and three to six months of training.
CSX had 7,000 train and engine service (T&E) workers at 2019’s end, but that figure fell to less than 6,000 in late summer 2020 before climbing back to 6,800 late last year. The railroad has hired 2,000 new workers over the past two years, but the active T&E workforce is just over 6,600.
“We lost 200. We’re going backwards,” said Foote. “You can imagine how many people we had to recruit and train just to get to that 2,000.”
CSX has improved its hiring processes and now tries to recruit people it hasn’t historically considered to bring on more new workers, he said. Currently, 500 people are in training and another 400 to 500 are close to entering the training process. CSX aims to reach a T&E headcount of 7,000 — its pre-pandemic level — as soon as possible, and then continue to hire to accommodate growth.
The Class I also needs to provide employees more flexibility with work schedules/assignments and days off to minimize attrition, Foote said. Several initiatives target retaining new hires throughout the early years of their careers, including a recent agreement that will lift pay for newly qualified conductors.
Foote believes an increase in velocity and stabilization in dwell time show the railroad is beginning to overcome its service woes. Jeff StaglThe company needs a satisfied and productive workforce to succeed, Foote believes.
“We need to communicate and work more with our employees so we can change what clearly has become a frustrating environment for them,” he said.
Hiring and retention are showing signs of stabilizing, but Foote realizes things can change quickly in what has become the “new normal.”
“What could screw this up in a nanosecond? Another [COVID-19] variant,” he said.
So far, 7,000 of CSX’s 21,000-plus employees have gotten sick because of the pandemic and variants, and 36 have died.
If he could go back in time to reverse a decision made prior to the pandemic to furlough a large number of workers, he would, Foote said.
“We would have never laid off the employees. But we had no vision of the future,” he said.
What looking-ahead power he does have tells him the Pan Am Railways acquisition completed in May poses promising growth opportunities in Connecticut, Maine, Massachusetts, New Hampshire, New York and Vermont.
“We’re excited about the transaction. It fits right into our network,” said Foote. “We can create a new single-line service.”
Things also are at least slightly encouraging on the operations front. The railroad is operating a bit better, albeit nowhere near the strong performance reached in 2019, said Foote.
“You can look at 100 metrics to see how you're doing but you only need two: velocity and dwell. Our velocity is up and our dwell has stabilized,” he said.
Those two metrics, Foote said, give him some confidence the railroad is beginning to dig its way out of what’s been a pretty deep hole over the past 18 months or so.
After his presentation, Foote was asked how morale was among CSX employees given the recent struggles. It’s the same as describing morale in the airline industry or in the restaurant industry — not good, he said.
“Heck, my morale isn’t very good either,” said Foote.
