Imagine your supply chain as a high-performance sports car—powerful and fast, but rendered useless if one wheel gets stuck in mud. For CSX Transportation, America's eastern rail giant, that muddy wheel has been its interconnect business. Now, the company is preparing for sweeping reforms to achieve an efficiency breakthrough that could reshape freight rail operations.
The Interconnect Challenge: CSX's Achilles' Heel
In rail transportation, "interconnect" refers to the process where freight transfers from one railroad's network to another's—essentially how different rail companies collaborate to move goods across their combined systems. For example, a shipment might travel from a factory via CSX tracks before transferring to Norfolk Southern rails for final delivery.
CSX CEO Jim Foote recently acknowledged in an earnings call that the company's interconnect network "needs a lot of work." While withholding specifics, Foote revealed plans to "reconfigure franchise agreements" to ensure proper integration across CSX's operations—a tacit admission that interconnect has long operated as an isolated unit, contradicting Precision Scheduled Railroading (PSR) principles that demand seamless network coordination.
Precision Scheduled Railroading: The Efficiency Gospel
PSR—the operational philosophy reshaping modern railroading—treats freight networks like airline schedules: fixed timetables, direct routes, and minimized switching operations. Its pillars include:
- Fixed schedules: Trains run like clockwork, not just when cargo accumulates
- Point-to-point routing: Fewer intermediate stops reduce handling and delays
- Asset optimization: Maximizing use of locomotives, cars, and personnel
- Streamlined management: Flatter organizational structures for faster decisions
Lessons from the Harrison Era: Reform Without Rupture
CSX learned painful lessons about disruptive change during Hunter Harrison's 2017 PSR implementation. The late CEO shuttered seven hump yards (gravity-assisted classification facilities) and revised 1,300 train schedules, creating supply chain chaos that ultimately required Foote's stabilization efforts.
"That experience taught us that transformation requires balance," observed a rail industry analyst. "You can't sacrifice customer relationships at the altar of operational metrics."
The Perfect Storm for Reform
Current market conditions create an ideal reform environment. Trucking capacity shortages are driving shippers to rail, while CSX celebrates record-low operating ratios (58.6% in Q2 2018). Foote notes the company removed 7% of network capacity yet maintains equal volume—proof of strong demand.
"This is the best possible time to optimize interchanges," Foote stated, emphasizing that changes will be methodical and client-focused. Improved customer relations—from "they hated me" to occasional drinks—provide political capital for measured reforms.
The Roadmap: Optimization Through Integration
While withholding specifics, CSX's interconnect overhaul will likely focus on:
Operational Refinements
• Train design modifications for better asset utilization
• Terminal consolidations to eliminate redundancies
• Enhanced data analytics for predictive scheduling
Digital Transformation
• Real-time cargo tracking via IoT sensors
• AI-driven route optimization
• Automated interchange documentation
Cultural Shifts
• Cross-departmental collaboration breaking operational silos
• Continuous improvement programs engaging frontline staff
• Risk-managed phased implementation
The Bigger Picture: Railroading's Future
CSX's interconnect experiment carries industry-wide implications. Success could validate PSR's next evolution—where seamless interoperability matches internal efficiency gains. The ultimate vision? A freight network that's simultaneously smarter, greener, and more resilient:
- Intelligent: AI-optimized networks with self-adjusting capacity
- Sustainable: Lower emissions through precision operations
- Integrated: True multi-modal connectivity beyond rail-to-rail handoffs
As Foote navigates this transformation, his collaborative approach contrasts sharply with Harrison's disruptive style—a reminder that in railroading, as in mythology, even Achilles needed allies to win his battles.